Ken Rodriguez:
How Texas lottery advertised make-believe payoff for suckers
Web Posted: 06/12/2005 12:00 AM CDT

San Antonio Express-News

The sleight-of-hand Texas Lottery Commission has done it again. On Wednesday, the commission turned the Texas Lotto into an illusion, advertising an $8 million jackpot that didn't exist.

Now you see it.

Now you don't.

Thanks for playing, sucker.

This was no accident. This was deception.

Five days before Wednesday's drawing, commission officials learned there wasn't enough money to fund the $8 million jackpot.

Slumping ticket sales and lagging interest rates had created the shortfall, the TLC said.

So did the commission alert the public?

No.

Did the commission adjust the advertised jackpot amount?

No.

Did the commission come clean and say, "We've got a problem"?

No.

The commission decided to do nothing. Or, to be more precise, the commission decided to keep taking your money for a game it couldn't fully fund.

If you had drawn the winning ticket, you would have collected roughly $1.3 million less than the advertised amount.

Fortunately for the TLC, no one claimed the jackpot. Imagine: The winner could have gone on TV to say, "I got cheated out of a million bucks."

Instead, when the story broke, commissioners said, gosh, we sure are sorry. And, gee, we've never had a shortfall this big before. And, please, do not lose confidence in the lottery.

And, oh, by the way, we're not rolling up the jackpot an extra million for Saturday's drawing. We're freezing it at $8 million. So, yippee, go out and buy more tickets!

Missing from this faux apology was a real explanation. The commission never said why it failed to reveal the shortfall before Wednesday's drawing.

Commission spokesman Bobby Heith said he didn't have an answer. He could only speculate.

And this was his best guess: "We were in uncharted waters and hoping sales would climb."

Hoping sales would climb?

Heith says Texas Lotto ticket sales are down 26 percent from the same time last year.

This latest lottery fiasco should not surprise.

The commission plays the public like a trick card dealer. What you see is not what you get.

With one hand, the commission offers an easy game. With the other hand, it takes your money.

Take scratch-offs. As of June 4, the top cash prizes had been claimed in 11 of the 76 scratch-off games offered. Even so, the TLC continues selling tickets for those 11 games, and people continue buying.

One game, Big Money Bonus Spectacular, promises a top prize of $1 million. That prize has been claimed, but tickets are still offered at 20 bucks a pop.

Anyone interested?

TLC could stand for Tricks, Lies and Cons. Consider some history.

For years, the commission has said the lottery does not hit the poor and uneducated harder than others.

Not true. A recent study by Texas Tech showed that Texans who earn the least spend more per player on the lottery than those in the highest income groups. The study also showed that high school dropouts spend more than three times as much as those with college degrees.

Tricks?

On three occasions, students in the statistics class of San Antonio College professor Gerald Busald have exposed erroneous lottery claims, forcing the commission to make corrections.

Lies?

In 2002, a reporter called then-TLC director Linda Cloud to ask about commissioner Walter Criner, who had resigned following an investigation into a sexual harassment complaint. Cloud said she knew nothing about the Criner investigation.

But she did, and when her lie and participation in a cover-up was exposed, she resigned.

If the TLC isn't honest about its own commissioners, why should it be honest about its games?

Truth in advertising seems foreign to the commission. If a lottery watchdog had not filed a complaint with the Texas Attorney General's Office last week, it's likely no one would know about the $1.3 million shortfall in the Texas Lotto jackpot.

Meanwhile, commissioners want you to believe the lottery is an honest game.

Even after Wednesday's drawing for a make-believe prize.

--------------------------------------------------------------------------------
To contact Ken Rodriguez, call (210) 250-3369 or e-mail krodriguez@express-news.net. His column appears on Sundays, Wednesdays and Fridays.

Texans expect and demand truth in advertising,
fair games of chance, consumer protection,
and a 100% return of our share of sales.

We don't have this now. It's time for serious changes.

Copies of my complaint letters follow.

This is my letter to the Attorney General and
the District Attorney of Travis County.

June 6, 2005

Attorney General Greg Abbott
Office of the Attorney General &
District Attorney Ronald Earle
Office of The District Attorney
Public Integrity Unit
P. O. Box 1748
Austin, TX 78767

RE: Texas Lottery - The Advertised $8 Million Jackpot - Deceptive Advertising

To Whom It May Concern:

The Texas Lottery is currently advertising the next Lotto Texas jackpot at $8 million. This is for the drawing to be held on Wednesday, June 8, 2005.

The problem is - if someone were to win - as per the Lotto Texas rule, the winner is entitled to 39.104% of roll sales which falls far short of revenues needed to fund a prize of $8 million - in fact, they only have enough to fund an estimated $6.5 million - at best. I feel the variance is entirely too high to support the amount they are advertising.

I contacted the TLC this morning to try to verify the factor applicable but they refused to tell me verbally. Because I am in the “lottery business,” so to speak, I track the rates/factors weekly and the rate I obtain is always higher than what Texas can obtain. Therefore, I am positive that the Texas Lottery can not fund the amount advertised.

Texans want and need pari-mutuel payouts as this is the only way a lottery can guarantee that players receive their share of sales - but - we also want and demand truth in advertising.

Just so that you know, the current Lotto Texas rule states that the TLC will pay the greater of either the amount in the prize pool or the “investment cost” for the first four (4) draws in a roll. After the 4th draw, a jackpot winner will receive 39.104% of roll sales. The TLC knew they would not have enough to fund $8 million but have chosen to falsely advertise the amount one would win if they won.

Your immediate attention to this matter would be appreciated. Consumers deserve to know the truth when it comes to purchasing lottery products.

Thank you very much.

Sincerely,

Dawn Nettles
Publisher

cc: Texas Lottery Commission

My Email to the Commissioners, Reagan Greer and Gary Grief

6-06-05

Subject: $8 Million Jackpot & Grievance Policy

Dear Commissioner Clowe, Commissioner Cox, Commissioner Olvera

I just wanted to be the one to tell you that I filed complaints with the AG and the DA of Travis County today regarding Wednesday's advertised $8 million Lotto Texas jackpot. I regret this but I feel the TLC should not knowlingly mislead the public.

As you know, the Lotto Texas rule states that the TLC will pay the greater of either the amount advertised or the amount in the prize pool for the first 4 draws in a roll. After the 4th draw, then they only pay the amount in the prize pool.

I certainly agree with paying pari-mutuel prizes - this is the only way to guarantee the people that they will receive their share of sales. But, I also believe in truth in advertising and if the jackpot is won, a winner would not receive $8M as stated.

I called Bobby Heith this morning and asked him what the factor was but he refused to tell me. He said I'd have to make an open records request. I do request jackpot estimates each Sunday but in this case there was not enough time to obtain the information thru channels so I was hoping the TLC would simply tell me the factor.

Since I obtain the factors from other lotteries easily, I was able to determine the approx costs for Texas. The rate I obtain is always higher than what Texas obtains so I am positive that a winner would only receive roughly $6.5 million and this is too far off the amount advertised. To me and others I've contacted today, this is deceptive advertising.

I've also been meaning to raise one more issue of importance. The TLC does not have an employee grievance policy. I took it upon myself to contact other state agencies - roughly 20 of them - and so far I haven't found one that doesn't have something in place for grieving employees. This includes the AG, Comptroller, State Auditors Office, SOS, Dept of Banking, Environment Quality Commission, DOT, CPS, Building and Procurement, plus many others.

The TLC is the only agency I found that doesn't have a grievance policy for their employees.

I would like to urge you to do the right thing and have the TLC provide an official source for employees to complain - if of course, they have a complaint.

Thank you for any consideration given to these two issues.

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