Posted: Wednesday, July 30, 2003
Revised, Sunday, July 9, 2006

Related Stories
The Cheated Winners (2004), Click here.
July 2006 - San Antonio Express News -
"Willy-Nilly" Lotto Prizes Spur Audit, Click here.

Lottery integrity compromised
50 lotto winners cheated between 1997 - 2000
by Dawn Nettles

Update: July 18, 2004
I testified at the Licensing and Administration hearing
on July 14, 2004 about the cheated winners. The
TLC is now responding at the urging of the Texas
Legislature. The TLC is "suppose" to get with me
next week with an answer as to how they plan to
settle this issue. By all rights, the cheated winners are
entitled to interest compounded quarterly on the principle
and a "failure to pay" penalty as set forth by the US Congress.
I will be working up those figures next week.

If you are listed below and I have not already spoken with you,
please call me so I can explain everything to you. I also have
a spread sheet - one that is easy to understand - and my written
testimony that I can send to you. My number is (972) 686-0660.

Back to the original story that identifies the players who were
short-changed and explains how many were "overpaid" too.

This page only shows the documents that confirm my original story.

- 1 -

A letter dated September 28, 2001 from Kim Kiplin. It confirms there
was a hearing and allegations were made during this hearing with regard
to winners not receiving all that they were entitled to. Yet there is no
transcript shown for this date on the TLC web site. Why not?


- 2 -
The "Missing" Transcript

All transcripts are listed on the TLC web site.
But - the 9-28-01 transcript is NOT listed.
If you'd prefer to see this on their web site,
here is a link ...
(I'm sure they'll claim this was just an oversight!)

- 3 -
The Summary Report

Internal Audit Investigation #2002-2. The TLC faxed this document to me.
I've scanned in only two pages - the "summary of findings" and I've
highlighted two paragraphs of importance.

The first paragraph, "Investigation Objective," please notice that it states my
allegations were made by email. This is clearly not so as Ms. Kiplin's letter
above shows. This report was concluded at this particular time because
of the Sunset Review.

It took the TLC one year to confirm my "allegations." This was simply a stall.
The TLC records the transfers to the reserve fund at the time of each win.

If you want the entire 10 pages, I'll be happy to fax them to you or
maybe the TLC will provide it to you by email. I'm sure they provide
information to you in a different manner in which they do me!




- 4 -
The Excel Sreadsheet

"Schedule of Winning Lotto Texas Jackpot Drawings"
as referenced in summary above.

I received this from the Texas Lottery. I converted the spread sheet into a pdf for the purpose of posting on my web site. Click here to see the spreadsheet.
(Magnify to 125% for ease of reading.)

- Special Note -

Column 13 is the column that shows how much was kept by the TLC from the 6 of 6 prize pool. It specifies one of two things - either the money was "AR" - added to reserve or "PW" - paid to winner. Those marked "AR" rightfully belonged to the player but the player didn't receive it.

If you would like a copy of the excel file itself so you can open it in Excel and do your own calculations, just email me and I'll send you the file ASAP.

If there is anything you do not understand about these figures, feel free to call and I'll do my best to explain.
(972) 686-0660.

Click here to see the spreadsheet.



- 5 -
Paying 6 of 6 winners ... the Lotto Texas rule said ...

1992 - 2002

Prize amounts. The prize amounts, for each drawing, paid to each Lotto Texas player who selects a matching combination of numbers will vary due to a pari-mutuel calculation, with the exception of the fourth prize, which is a guaranteed $3 [changed to $5 in July 2000].

NOTE: The jackpot prize is the 1st prize and it was NOT guaranteed in any way, shape or form. They did change this in Feb 2002 - then they guaranteed the greater of either the amount in the prize pool or the cost to invest that would give a return of the amount advertised.

Feb 2002 to May 2003
16 TAC §401.305(e)(1)

(2) Prize pool. The prize pool for Lotto Texas prizes shall be a minimum of 55% of Lotto Texas sales.

(3) Prize categories.

(A) First prize (jackpot).

(iii) The six of six jackpot prize must be claimed at the Austin claim center. The jackpot amount is determined by the indirect prize category and by estimating the direct prize category. The total prize category contribution for a drawing will include the following.

(I) The direct prize category contribution shall be 68.24% of the prize pool for the drawing.

(II) The indirect prize category contribution, which may be increased by the executive director, will include the roll-over from the previous drawing, if any.

(III) The commission will pay the greater of either the advertised jackpot or the jackpot based on sales determined in part by the applicable interest rate factor. The amount actually paid will either be a winner's share of the net present cash value of the jackpot amount or a winner's share of the jackpot amount, depending on the payment option and consistent with the provisions of the rule.



Next ...
Does the TLC have two sets of records?

Back to the story in its entirety

Related Stories
The Cheated Winners (2004), Click here.
July 2006 - San Antonio Express News -
"Willy-Nilly" Lotto Prizes Spur Audit, Click here.

The Lotto Report

Dawn Nettles
P. O. Box 495033
Garland, Texas 75049-5033
(972) 686-0660
(972) 681-1048 Fax