Texas Lottery
Opposing the Texas Cash 5
Purposed Rule Change
May 2018
Originally Posted: 5/27/18 - 11:30 PM
Revised: 5/28/18 - Minor language change for clarity
& added Monopoly game added in 2014
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The Comment Period Ends May 29, 2018
Should you want to comment, even late, you can send an email to:
legal.input@lottery.state.tx.us
You can fax a comment to:
(512) 344-5189
You can mail a comment to:
P. O. Box 16630
Austin, TX 78761-6630
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My Public Comments To The TLC
& TX Players Regarding --------------------------------- |
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The Texas Lottery Commission has purposed a rule change for the Cash5 game. In summary, the proposed changes include reverting from pari-mutuel prizes to set prizes amounts for all prize levels. (There will be reduction in the prize amounts for players who match 4 numbers and for those who match 2 numbers.) They removed any/all percentages of sales to be paid to players meaning they can return however much they want with no repercussions (known as a prize pool and allocations). They plan to reduce the matrix to a pick 5 of 35 rather than pick 5 of 37 numbers. It appears the intent is continue conducting 6 draws per week. Read the actual proposed rule, click here. (Page 1 is blank on this pdf) Explanation of why they deleted the prize allocations Explanation of reducing prize amounts While matching 5 of 5 numbers will be greater than it is today at a fixed $25,000, it is not really guaranteed because there is a cap of $75,000 per draw. But more importantly, Texans did play this game for a top prize that was as high as $400,000 with NO liability to the state. Unfortunately, the top prize has dwindled down to as low as $14,000 mostly due to the rule changes over the years. The Texas Lottery destroyed this once very popular Cash5 game by going from 2 draws per week, to 4 draws per week then to 6 draws per week not to mention the reduction of prizes due to adding the "match 2 numbers prize" then adding competing FAILING games - specifically All or Nothing and Triple Chance. Commissioners About Cash 5 - A brief history ... Robert Tirloni gave you a brief history of Cash5 but he left some major factors out of his equation. Mr. Tirloni said, "It was the third draw game ever introduced in Texas back in 1995. It did start as a 5 of 39 game. It was drawn two times a week on Tuesdays and Thursdays. Shortly after it was introduced, about a year later, it was changed. It was then drawn four times a week on Mondays and Fridays, in addition to the Tuesdays and Thursdays. So it was drawn every day that Lotto was not drawn. The last time we did a major overhaul on the game was in 2002. We changed it to a 5 of 37 matrix and at that time, we made it a daily game. And so it was drawn, and it still is drawn, every Monday through Saturday." Mr Triloni failed to say that a $2 prize was added in 2002 which caused other prize amounts to decline - causing a major financial downfall for the state and a loss of players. (See FY sales shown next) No one asked Mr. Tirloni about the previous changes to the game. For instance, what was the financial success of taking the game to a 4 then 6 day a week drawing? What did players say about the changes? Let me tell you - players objected to the changes but players were ignored by the Texas Lottery. So the players spoke with their dollars. See ... FY Cash 5 Sales Since Inception
*2018 - FY Sales through May 27, 2018 Here's a how the prizes amounts declined with each Cash 5 rule change .... Cash 5 drawing 10/13/95 - 11/22/96 - 2 draws per week. Does anyone actually believe that reducing prize amounts is a selling point for a game? May I suggest ...
The 2002 rule change was the downfall of Cash5. At this point, I would also like to suggest ... In 2006 or 2007, Commissioner Tom Clowe told staff ...
**July 29, 2002 - Went from 4 draws per week to six draws per week
Robert Tirloni said, during the April 12, 2018 Commission Meeting ... If Cash5 needs "tweaking" because it's only 1% of total sales ....
Now Let's Go One Step Further In Our Review ...
* Triple Chance - As of 5/27/18, there's been 833 drawing and of those, only 48 draws were won consisting of 49 winning tickets. (There were two winners on 1/6/16) On 48 occasions, the TLC paid out in excess of 300%. Interestingly, if the winners count is accurate, then the TLC has paid out 52.7% of sales to BOTH winners and break-even players (excluded freebies - higher if we count freebies!). This game is a needless liability to the state in that players only want a return of 50% of sales. It should be discontinued to allow the funds to move to Cash5 or Texas 2 Step. Triple Chance, as indicated by sales, has not been accepted by players. ** All or Nothing - Interestingly, on a number of occasions, the TLC has paid out 150% on draws where players either matched or didn't match 10 or 11 of the numbers drawn. This most likely means players played all odd, even, numbers 1-12 or 13 -24. Out of 6,889 drawings, there's only been 84 winning tickets. Therefore, on a per draw basis, it is safe to say that players who "win" are receiving 23% to 28% of sales in .01219% of the time. Again, this game is a needless liability to the state in that players only want a return of 50% of sales. This game, as indicated by sales, has not been accepted by players either. *** Pick 3 percentage computed since 2007 when Daily 4 began. When players win big on triple digits and/or consecutive number sales will surpass $1 million. Winners ALWAYS give back. This is the downfall of the online games. BUT, this is the VERY reason scratch ticket sales are so strong. When a players wins, he feels "lucky." So he will invariably give all of his winnings back and then his own money in an attempt to win again. The TLC should seriously consider this "ploy" for the online games. The Purpose of Showing The Financial & Payout Facts For Online Games When you consider that Pick3 generates the most revenue in Texas online games and the top prize is basically $250 for a .50 bet with odds of 1-in-1000 - this should be a huge RED flag. Players want to win something worth while, not $1 or $2. They want a reasonable fair chance of winning something, not trashing the tickets they buy. Having said this, I'm going to show you one more chart so you can see what I mean by trashing tickets and maybe this will help you understand why sales have declined for the most part and players are so unhappy and quitting ...
So you can intelligently consider the effects May 29, 1998- May 11, 2001 - Added a game called TX Million that failed (100 numbers in game) In Conclusion ... I'm in favor of a lottery. But the lottery has turned itself into a thief so to speak. By that I mean, they are offering games of chance that they know will not be won very often so they can gamble with telling players they can win $250,000 or $100,000 when sales don't support it. It is really wise to offer a payout at $250,000 when they only sell an est 20 to 30 thousand tickets? Or offer $100,000 when they only sell an est 18,000 tickets per drawing? Or $5 hundred million when Texas only sells 4.6 million tickets out of 302 million combinations? Please don't adopt the rule for Cash5. Instead look at potential changes for the failing games and set expectations on the definition of "successful" games. A matrix change is not necessary for Cash5 and is being offered for ONLY one reason - to trick players into thinking they are getting something good with this change. If they want to increase revenues, then start giving players a chance to win something worthwhile. There would be greater participation. Also, when and IF the TLC staff tries to tell you that the games suffer from "player fatigue" - please don't put much merit in those words. Family games nor the games in Vegas ever change - slots, 21, poker, roulette, keno, etc; gin rummy, checkers, dominoes, bowling, golf etc - What has changed with the lottery are odds increasing intended to get longer rolls which equates to fewer winners resulting in a loss of players. Just take on look at Powerball, Mega Millions and Lotto Texas to see how many times they had rule changes with the intent to increase sales. Now they are raising ticket prices for the same reason - what's next? The Comment Period Ends May 29, 2018 Yes, I know I'm posting this late on May 27th. Read the Cash 5 proposed rule, click here. |
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4/12/18 Commission Meeting
AGENDA ITEM IX
9 CHAIRMAN KRAUSE: Item Number IX.
10 Jumping around here. Ms. Rienstra is going to inform
11 us about her doings.
12 MS. RIENSTRA: Okay. Good morning,
13 Commissioners. Deanne Rienstra, Special Counsel.
14 In your notebook is a proposal to amend
15 the current Cash Five Draw Game Rule, which is found at
16 16 TAC §401.308. The purpose of the proposed
17 amendments is to change the Cash Five game matrix,
18 offer guaranteed fixed prizes and set a liability limit
19 for the Match 5 top prize. Robert Tirloni is here to
20 present the changes to this game.
21 MR. TIRLONI: Thanks, Deanne. Good
22 morning, Commissioners.
23 COMMISSIONER ARRIETA-CANDELARIA: Good
24 morning.
25 MR. TIRLONI: I'm going to start with
0032
1 just a brief history of the Cash 5 game. It is one of
2 our older draw games. It was the third draw game ever
3 introduced in Texas back in 1995. It did start as a 5
4 of 39 game. It was drawn two times a week on Tuesdays
5 and Thursdays. Shortly after it was introduced, about
6 a year later, it was changed. It was then drawn four
7 times a week on Mondays and Fridays, in addition to the
8 Tuesdays and Thursdays. So it was drawn every day that
9 Lotto was not drawn.
10 The last time we did a major overhaul on
11 the game was in 2002. We changed it to a 5 of 37
12 matrix and at that time, we made it a daily game. And
13 so it was drawn, and it still is drawn, every Monday
14 through Saturday.
15 So since 2002, we've completed
16 approximately 23 major draw game initiatives, ranging
17 from introducing Powerball and Mega Millions, changing
18 draw days on certain games, launching new draw game
19 promotions. Twelve of those 23 have been multi-state
20 initiatives. And with the recent $2 Mega Millions
21 change that took place in October behind us and no
22 foreseeable multi-state changes in the near future, we
23 think we have some time and we have an opportunity, to
24 be able to tweak this game and improve the matrix and
25 hopefully increase sales for the game.
0033
1 So this is just a snapshot of the last
2 five years of sales for Cash Five. It is on the
3 decline. Like I said, it is one of our older games.
4 Now this looks somewhat negative, but to put it in
5 perspective, Cash Five represents less than 1 percent
6 of total sales for the Agency in a fiscal year. So
7 it's about nine-tenths of 1 percent.
8 So how did we get to the recommendation
9 that I'm going to show you today? We've been doing
10 quite a bit of game research with IGT and their
11 research vendor. We've been working with them about
12 the past 18 months on a myriad of game enhancements.
13 We've been looking at add-on features, Two Step game
14 changes, Cash Five changes.
15 At one point we thought we could
16 actually shrink the portfolio and combine Two Step and
17 Cash Five, since they're both five digit games. That
18 was met with a resounding no by players of those games.
19 They did not like that idea. So out of all of this
20 study, we do believe, though, we have found a Cash Five
21 game that will improve the current offering and will
22 increase sales from where we currently stand.
23 So here's the comparison. This is our
24 current game. This is the 5 of 37. So $1 price point.
25 The proposal is also a $1 price point. It's a 5 of 35.
0034
1 This has been the big challenge for us
2 on the Cash Five game. Most -- four out of -- I'm
3 sorry, three out of the four prize tiers are pari-
4 mutual, so the prize amount is dependent on the sales
5 for the drawing and the number of winners at each tier.
6 So really when you're playing this game, you don't know
7 exactly what you're playing for. We can estimate the
8 prizes, but you -- until the sales are final, and we do
9 the drawing, there's really no knowledge of what you're
10 going to be winning at those prize tiers.
11 On average, the top prize is anywhere
12 from 14 to $16,800 right now. The current odds for the
13 current game one -- are one in eight.
14 If you look at the new game, we feel
15 we've made a big improvement because all of these prize
16 tiers are now guaranteed. So we'll actually be able to
17 market and promote what the prize amounts are for each
18 tier in the game. The odds have -- have improved for
19 the player at every single prize tier and the overall
20 odds of winning have also improved.
21 We do have a liability cap, though, on
22 the top prize. This is similar to the liability cap
23 that we have on All or Nothing, and it's to protect us
24 in case we were to have a large number of top prize
25 winners in one drawing. So the liability cap is set at
0035
1 $75,000.
2 So this is the new proposal. This is
3 what is incorporated in the Rule. I do want to say
4 there's really no silver bullets in the draw game
5 space. It's difficult to come up with new draw game
6 concepts and like we've talked about, it's really
7 difficult to market and promote the draw games at
8 retail. It's basically what we call the invisible
9 product. Everybody knows about the large jackpots when
10 those are increasing. Games such as this are really
11 hard to promote, so I think we have to look for, even
12 if it's small opportunities, to take baby steps and try
13 to improve the health of these games whenever we can do
14 so. And again, I think we have to remember that
15 currently this game is less than 1 percent of sales
16 overall.
17 So we've provided a brief outline for
18 scheduling. If you approve the publication of the Rule
19 in the Texas Register, it will publish towards the end
20 of this month on the 27th. We will have a public
21 comment period and we're actually going to have a
22 public comment hearing, so the public can come and
23 provide us with their comment on this rule proposal.
24 We can bring it back to you all on June 21st at your
25 next meeting for you to consider adopting the rule.
0036
1 And if you choose to do that at that time, we believe
2 we can have this game up and running by the end of
3 September.
4 And that's the presentation. Staff is
5 asking for you to publish the Rule in the Texas
6 Register.
7 COMMISSIONER LOWE: Chair, I have a
8 question. Can you get back to the slide that has the
9 prize matrix on there?
10 MR. TIRLONI: Yes, sir.
11 COMMISSIONER LOWE: So on the righthand
12 bottom column, free Cash Five, Quick Pick --
13 MR. TIRLONI: Yes, sir.
14 COMMISSIONER LOWE: Changing that from a
15 $2 prize to -- and how much does a Quick Pick cost?
16 MR. TIRLONI: The -- it would be the
17 price of the game. So that would be a $1 Cash Five
18 Quick Pick that you would win.
19 COMMISSIONER LOWE: So you were actually
20 reducing the --
21 MR. TIRLONI: That is the -- that is the
22 one reduction from the current game to the proposed
23 game. And --
24 COMMISSIONER LOWE: And it's -- give me
25 a little reasoning behind that.
0037
1 MR. TIRLONI: In order to be able to
2 make these fixed prizes, we had to do that. If we keep
3 this as $2 or if we make this a $2 Cash Five Quick
4 Pick, where we give you basically two boards, we can't
5 achieve the guaranteed prizes for these other tiers.
6 And we thought that was important to do.
7 COMMISSIONER LOWE: Okay. I understand.
8 Do you think you'll get negative reaction from that?
9 MR. TIRLONI: That -- if you were to try
10 to find one negative thing with the new game, that's
11 what people will -- that's what people would point to.
12 But again, we do have a huge challenge with the current
13 game because people just have no idea what they're
14 playing for. And so we had to make the decision about
15 what we thought was in the best interest and we thought
16 in the best interest was being able to actually
17 guarantee those prize amounts to be able to talk to
18 them and have the retailers know what those prize
19 amounts were.
20 So we had a -- you know, there's a
21 limited pool of money. This game is about a 50.9
22 percent payout, so you have -- you have limited funds
23 that you can kind of play around with when you're
24 creating these different prize tiers and these
25 different prize levels.
0038
1 COMMISSIONER LOWE: Okay. Okay. Thank
2 you, Chair.
3 COMMISSIONER ARRIETA-CANDELARIA: I have
4 a question.
5 CHAIRMAN KRAUSE: Please.
6 COMMISSIONER ARRIETA-CANDELARIA: Robert
7 --
8 MR. TIRLONI: Yes, ma'am.
9 COMMISSIONER ARRIETA-CANDELARIA: --
10 with regards to the -- just so I'm clear, how much is
11 the cost of a ticket? Is it a dollar?
12 MR. TIRLONI: Yes, ma'am.
13 COMMISSIONER ARRIETA-CANDELARIA: Okay.
14 MR. TIRLONI: It's currently a dollar
15 and it will stay a dollar.
16 COMMISSIONER ARRIETA-CANDELARIA: Okay.
17 I think that -- I think the Free Cash Five Quick Pick,
18 I think that -- that's okay for me. But just my
19 question, with regards to the fixed prize, so just so I
20 understand, if there's three winners, they each get
21 25,000 --
22 MR. TIRLONI: Yes, ma'am.
23 COMMISSIONER ARRIETA-CANDELARIA: -- at
24 the five match. But if there's four winners, they
25 split 75,000?
0039
1 MR. TIRLONI: Yes, ma'am.
2 COMMISSIONER ARRIETA-CANDELARIA: All
3 right.
4 MR. TIRLONI: That's correct.
5 COMMISSIONER ARRIETA-CANDELARIA: Okay.
6 MR. TIRLONI: And that -- and All or
7 Nothing is set up similarly. Any game that has -- that
8 has a fixed top prize, we -- except Pick Three and
9 Daily Four, but these types of games we're putting
10 prize liability caps on all of those.
11 COMMISSIONER ARRIETA-CANDELARIA: Okay.
12 I think that's good.
13 CHAIRMAN KRAUSE: Where's your question?
14 COMMISSIONER RIVERA: All right. Here
15 we go. The odds of winning, is this our best or lowest
16 odds of winning? Or if not, what is?
17 MR. TIRLONI: On the draw game side, I
18 believe All or Nothing is -- All or Nothing is one in
19 slightly over four.
20 COMMISSIONER RIVERA: Wow. How much is
21 that game?
22 MR. TIRLONI: $2.
23 COMMISSIONER RIVERA: Okay.
24 MR. TIRLONI: So what you -- what that
25 gives you the ability by having a $2 game, you have
0040
1 more money that you have in your prize pool to create
2 more prize tiers.
3 COMMISSIONER RIVERA: So the -- it's
4 called All or Nothing, $2, one in four because the --
5 nice. Okay.
6 MR. TIRLONI: That's the game where you
7 can win the top prize whether you match all 12 numbers
8 in the game or if you match zero of the numbers in the
9 drawing.
10 CHAIRMAN KRAUSE: Oh, that's right.
11 COMMISSIONER RIVERA: Okay. Perfect.
12 You can tell I'm up here playing a lot of scratch games
13 and -- so all right. (Laughter)
14 MR. BAIRD: Not in Texas.
15 COMMISSIONER RIVERA: Yeah. Lotto, all
16 of it. Okay.
17 CHAIRMAN KRAUSE: Okay. Thank you very
18 much. And so anyway, we are looking for a --
19 COMMISSIONER RIVERA: Move for approval.
20 CHAIRMAN KRAUSE: Yeah.
21 MS. RIENSTRA: Chairman, I would like
22 to, please, also mention that we will hold a public
23 hearing on May 9th at 9:30 here at the Commission
24 Headquarters.
25 CHAIRMAN KRAUSE: Okay. Well, this --
0041
1 this is to begin the rulemaking process?
2 MS. RIENSTRA: Correct.
3 CHAIRMAN KRAUSE: All right.
4 MS. RIENSTRA: Yes, sir.
5 COMMISSIONER RIVERA: Move for approval.
6 Good job, Staff.
7 COMMISSIONER LOWE: Second. Thank you.
8 CHAIRMAN KRAUSE: All in favor say aye.
9 (Chorus of "ayes")
10 CHAIRMAN KRAUSE: Approved.
11 MR. TIRLONI: Thank you, Commissioners.
12 I have a T-bar memo for your initials.
Click here, if you want to read the entire meeting transcript on the TLC website
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