About the Texas Lottery

The Under-Handed
Rule Change of 1996

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Originally Posted: Approx. Oct. 10, 2001
Revised: Nov. 5, 2001
Updated: Feb. 13, 2002 - New writings marked in RED.

When the lottery first began here in Texas in 1992, it's obvious to me the intent
was above board. But I'm sad to report that the good intentions were lost
on Nov. 8, 1996 when the TLC changed the language in the Lotto Texas
rule that pertained to how much to pay the 6 of 6 winners. It appears
"greed" entered the picture then and again now (May 2001) with
the proposed rule change to start paying the amount
advertised rather than the allocated percentage of sales.
They still had the language of "may" rather than "shall" for
the amount due a lottery winner.

(A new Lotto Texas rule was proposed May 2001.
When they finally voted to approve the new rule,
in February 2002, the word "shall" was put back in.)

Original (1992) Rule Said, "(i) The direct category contribution shall be
64% of the prize pool for the drawing
(The "64%" is the 6 of 6 winners share from the "prize pool"
that they "shall" receive. The "prize pool" is the players money. In 1996,
the "prize pool" was 50% of sales but in July 2000 when they added
the 4 balls, they increased it to 55% of sales.)

Rule Changed - Effective 11-8-96 "(i) The direct category
contribution may be 64% of the prize pool for the drawing
(This means they could pay 20% or 80% of the prize pool
to the 6 of 6 winner. Is this fair? Why should some winners
receive a smaller percentage of sales than other winners?)

Story Revised - February 13, 2002 - On February 12, 2002, the Texas
Lottery Commission adopted a new Lotto Texas rule where they
changed the wording back to "shall." The exact verbage in the
new Lotto Texas rule is: "The direct prize category contribution
be no less than 68.24% of the prize pool for the drawing.
To read more about this, click here.

The (original) and the current rule also states: (2) Prize pool.
The prize pool for Lotto Texas prizes shall be a
minimum of (50%) 55% of Lotto Texas sales

But the thing is, they don't pay players 55% of sales now. And they didn't pay 50% of sales when it was suppose to be 50% either. How can they when the percentages due the players don't even equal 55% (50%)? The only "guarantee" players have of pure honesty and integrity on behalf of the TLC would be if we had a rule that spells out exactly what players win when they win - like it was before they gave themselves the freedom to take more than their share of sales by changing the language from "shall" to "may."

Folks, this language is really wrong and we need to DEMAND that it be changed and NOW is the time to speak up. If they refuse, we need to lobby to abolish the lottery because they are taking us to the cleaners. We'd be so much better off taking our money to the boats, ships, horse races or Vegas. You must remember, the TLC keeps half of sales - right off the top - from most games - they keep the unclaimed prize monies and they keep the reserve fund which, by the way, is part of the prize pool - you know, that "minimum 55% that shall be paid to the players." Then, the 6 of 6 winner only receives 37% of total sales and out of that, he pays a minimum of 28% in federal taxes. Hey - can't you see - the only ones who come out smelling like a rose is the state and federal government. The TLC keeps pressing for more money and they continue to re-write the rules to benefit ONLY themselves at the expense of the players.

The strategy the Texas Lottery is counting on in paying the "amount advertised" rather than the "allocated percentage of sales" is basically the same strategy that the Director of the Red Cross attempted. The Red Cross received more donations than they ever imagined for the Sept. 11, 2001 attacks, so the director wanted (decided) to keep $300 million of the $500 million and use it for "future victims" even though they used "todays victims" to bring the money in. The TLC is attempting to do the the same basic thing. Last year, they added 4 balls so they could build big jackpots - now they don't want to have to pay "all" the monies out from those big jackpots. They want to use some of those funds to supplement other pots. In resolving this matter, I sure hope our Commissioners recognize that each drawing is a separate event - the amount paid to winners should be set in stone and the rules should be followed without exception. (NEW - 2-13-02 - They did! The word "shall" was put back into the new rule that was adopted on 2-12-02.)

10-18-01 - Please, call your State Representatives, Senators and newspapers and voice your opinions. Besides changing the language regarding how much 6 of 6 winners are to receive, the TLC also lifted the ban for political contributions in G-Techs new contract. The ban had been imposed by John Sharp originally and it's purpose was to ensure integrity in the Lottery. So, not only are there no "set" rules in paying winners, they also set themselves up to let "money" influence the politicians. Ya'll need to make those phone calls!

10-22-01- After the Dallas Morning News ran a story about how the TLC "quietly" removed the following language from G-Techs's new contract, "G-Tech, its officers, directors, agents and lobbyists will not knowingly make a gift, loan or political contribution, either directly or indirectly, to any Texas State officer or a member of the Texas State Legislature," the TLC reversed its actions and restored the statement to the new contract. This is what they need to do with the "shall" and "may" situation too.

FYI, the original rule was Title 34. Public Finance. Part I. Comptroller of Public Accounts. Chapter 7. Administration of State Lottery Act. Subchapter D. Lottery Rules. TAC7.304 and was transferred in 1994.

The Lotto Report
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