US Senate Asks TX Lottery Director ...
What is Being Done To Protect The Integrity
of Multi State Lottery Association (MUSL)?

(In Light of Fraudulent/Rigged Draws)


brought to you by
The Lotto Report

Originally Posted: July 11, 2016
Revised: July 12, 2016 - 12 PM
Added #14 under Grief's Hall of Shame Section


Opinions & Editorial by Dawn Nettles
Publisher of The Lotto Report

Read Senator Thune's powerful letter - click here


Good news for lottery players nationwide ....
Finally ... someone in Washington - Senator Thune, Chair of the Committee on Commerce, Science and Transportation - is asking serious questions about lottery games. True, at this time, they are specifically inquiring about MUSL's games because a MUSL employee was found guilty of rigging a number of Hot Lotto drawings. Currently, the ex-employee, Mr. Eddie Tipton, has appealed his case and is currently a free man.

The reason I'm pleased is because I feel strongly that this investigation will lead to investigating state run lotteries. In fact, this is exactly what players want and will need to restore integrity amongst the players. Because the Senate Commerce Committee exercises legislative and oversight jurisdiction of issues related to consumer protection and gaming, the lotteries would FEAR any investigations from this Committee.

About the fraudulent/rigged draws that made National headlines ...
A recent court filing claims to show that investigators have recovered code that proves the draws were fixed. The prosecution suggests that the lottery machines were programmed/tampered with after (or during) a security audit. The added hack picked three specific dates (all of which related to lotteries involved in the case), and if two other conditions were met, the machine wouldn't use the regular random number generator, instead it'd pick the winning set from an algorithm. Tipton would be able to use this algorithm to predict the winning numbers claim the prosecution. Investigators were able to use the same code and methods to predict the exact same winning numbers.

As a result of the rigged draws, jackpot winners were cheated out of the true amount of money they should have received when they won. Keep in mind, if no winner, the jackpot rolls to a higher amount but those who won after a rigged draw, did not receive all that he was actually entitled to receive. Lawsuits are pending but one has to wonder, what can come from lawsuits since lottery's enjoy sovereign immunity? This means lotteries can't be sued, therefore, they won't be held accountable.

The players get screwed and lotteries are allowed to get away with cheating. Sovereign Immunity sends lottery Directors a clear message ... cheat and steal all you want, there's nothing players can do about it ... just bring in the dough no matter what you have to do!

Why did TX Director Grief receive the letter? What does Grief have to do with MUSL?
Texas Lottery Director Gary Grief was recently named as President of MUSL. Being President of MUSL essentially meant that Grief was next in line for the spot - it moves based on seniority historically. It carries a lead spot on the MUSL Executive Committee which is the last in line Committee before items go before the full MUSL Board.

Who is J. Bret Toyne?
I believe J. Bret Toyne was named Deputy Executive Director and Chief Financial Office of MUSL when Chuck Strutt was asked to take an administrative leave of absence due to the rigged Hot Lotto drawings. Mr. Toyne has been with MUSL for a great many years.

As of March 31, 2016, Mr. Strutt "officially" retired but probably if the truth was known, he was "forced" out. This is how the lotteries are pretending they have "taken action" for the fraudulent drawings. Of course, this is HOGWASH.

The Purpose of the Senator's Letter
The Committee Chair, Senator Thune, wants to know exactly what is being done to address the issue of fraud. Additionally, he wants to know what efforts have been put forth to restore integrity to MUSL games other than replacing Mr. Strutt who was the Executive Director since its founding. As you will see when you read the Senators letter, he documents his written facts. He lets it be known that he is fully aware of the extremely large sums of money that could create temptations for insider fraud.

Senator Thune asks six (6) very important questions. Mr. Grief and Mr. Toyne were to respond - in detail - by July 7, 2016. I intend to provide the Senator with some information that I feel needs clarifying by reading his letter. Additionally, I think the Committee should see a summary of sales for the historic $1.5 billion jackpot as shown below.

Please notice ... they sold 440 million tickets for the Jan 9, 2016 drawing yet there was NO winner. (There's 292 million combinations so obviously a great many duplicate tickets were printed).

Equally important, if you take 34% of roll sales ($1,082,555,400), you will find that the jackpot winners were shortchanged as they split $983,505,233.xls. MUSL wants big jackpots to drive sales but they fail to payout what is allocated for a jackpot winner. Why is this?

Senator Thune, The American People Thank You ... You're Right ... It IS time for transparency
It's clear that the MUSL leadership team, both past and present including Mr. Anderson (Director of Idaho and past MUSL President), Ms. Rebecca Hargrove (Director of the Tennessee lottery and secretary of MUSL) and Mr. Gary Grief (Director of the Texas Lottery and new MUSL President) have a responsibility to discuss in a transparent forum to the American people exactly what occurred, how it occurred and what oversight, if any, was in place and is now in place. The American people have been defrauded and these lottery directors - amongst others - set up and oversaw an organization that allowed this to happen. Who is accountable? So far the fox has been guarding the hen house.

What could US officials do to protect Lottery players nationwide ....

1) Outlaw ALL computerized drawings by any lottery. Require lotteries to use balls and machines. As been proven, drawings can be rigged by computer nerds. FYI - Both Powerball and Mega Millions use computers to pick the PowerPlay number or the Megaplier number. I believe these picks are NOT random. Powerball - in its rule change last Oct 2015, added a "10" to the PowerPlay. They heavily promoted this "new feature" to try to off set the odds increase. Guess what ... the computer has NEVER picked a "10." Hmmm....

2) Require lotteries to remove the ability to print duplicate Quick Pick tickets from their terminals (clerks print them by accident then sell them to unsuspecting players). Do NOT believe a lottery who may tell you that their players want to print duplicate quick picks - a ticket for each person in the office pool. This is not what they want. They pool their money so they can buy more tickets to increase their "chances" of winning. If a player wants duplicate Quick Picks, all he has to do is buy ONE ticket then fill out a playslip with that set of numbers and buy it however many times he wants.

If you think about it, a lottery terminal that has the capabilities of printing duplicate Quick Pick tickets is going against the grain of picking "random" numbers. Yet lotteries claim all quick picks are random numbers picked from the terminal.

Duplicate ticket stories ... 1) click here, 2) click here, 3) click here and read March 27, 2016 posting

3) Remove the option for players to even purchase quick picks. Players can pick their own random numbers. Powerball sold 440 million tickets with no winner yet there's only 292 million combinations.

4) Recognize that state run lotteries are in fact "businesses" intended to make a profit. Remove Sovereign Immunity from such "businesses." Lotteries can do anything- cheat, lie, sell deceptive tickets - without fear of any legal action. Consumers have no recourse to fight for their rights. Players call their legislators for help and he in turn, calls the lottery and tells them to handle the problem. The legislator generally tells his constituents he has no control over the lottery.

5) Require odds of games to be in line with the population and ticket sales to ensure FAIR GAMES of Chance. Example - In TX, the odds of our Lotto games is 26.8 million to one. Texas only sells 1 million to 1.4 million tickets per drawing leaving 25 million combinations not covered. Not to mention how many of the tickets sold are actually duplicate tickets.

6) Require store clerk to buy lottery products from other stores - NOT where they work.

7) Require lotteries to keep track of people who collect prizes numerous times. More than likely, the tickets they are cashing in have been stolen by store clerks from their customers.

There are other things that I could name but I think these are the most important.

Ironically ....
On June 3, 2016, I made an open records request to 4 lotteries seeking answers to the MUSL situation (rigged draws) too. Currently, my requests are in a "pending" state with the exception of one lottery who has given a final answer to me - which was the Tennessee Lottery, pdf.

If you can imagine .... TN said they are unable to provide me the requested records as the records are ONLY available to Tennessee residents. Now get this picture ... I've requested information pertaining to a Multi State Game that Texans participates in. In fact, TX has sent money to TN to pay Powerball jackpot winners 4 times and Mega Millions jackpot winners once yet out of state people are not entitled to any documentation from Tennessee. I have to live in Tennessee to be eligible to obtain public documents from TN. This is not right.

So that you know - I've not given up on answers from TN. I am pursuing it as transparency is critical when it comes to Multi State Games.

Finally, can Gary Grief, as President of MUSL, restore "integrity" to the MUSL games? You decide ....

Integrity is having a quality of being honest and having strong moral principles; moral uprightness, being trustworthy & transparent.

It is my opinion that Mr. Grief's reputation is far from stellar in Texas - he has lost creditability with TX players. Here are just a few things that have surfaced under his leadership. I'll call this section Mr. Grief's Wall of Shame! <grin>

1) Texas Lottery kept prize money - an un-cashed check in the amount of $35,000. By law, this money was supposed to be sent to the TX Comptroller. Every possible attempt to cover up this action was taken by the Texas Lottery as I was working on this story.

2) Continued to sell deceptive and trick scratch tickets after learning players were being deceived. The tickets were presented to the Commissioners on Jan 16, 2009 and they failed to scratch them off correctly as did TX lottery players. Read Commission meeting transcript and see two of the tickets in question.

3) Texas Lottery sent a press release announcing Monopoly winners were heading to Las Vegas for a chance to win $1 million. Weeks later they were quietly contacted and told TX was not going to honor the prize they had won. TX was the only state that failed to honor this particular prize. Players spent $5 per ticket to have 3 chances to win $1 million. But these people didn't get all that was promised to them - the Texas Lottery reneged after selling them the product.

Mr. Grief told the Commissioners during the Feb 2015 Commission meeting ... " To further mitigate our losses, and in hopes of cutting our exposure for any ongoing cost for the MONOPOLY TV game show, we did not authorize any Texas players who were selected to participate in the TV game show to actually travel to Las Vegas and do so. Instead, we awarded those players 10,000 cash prizes as substitute prizes, an amount that we determined was fair market value for the trip to Las Vegas and the chance to be on the TV game show. And we obtained releases from each one of those players -- there were 30 total -- for any future claim of liability against the Texas Lottery."

Read Mr. Grief's entire testimony regarding the Monopoly game. Click here and start reading on page 45, line 8.

These players were angry but had no one to turn to for help. There is no consumer protection for lottery players. Bottom line, the Texas Lottery can takes players money, promise them something in return, then renege if they want without consequences. No other "business" in the entire United States can get away with such actions.

4) Monopoly was such a failure that TX suddenly discontinued selling tickets putting the other states in a bad financial position. TX refused to stay in until the end of the month but all other states did. Yet, Mr. Grief was instrumental in designing, selling and launching the failed game and the first to renege.

5) Fun 5's ticket ... TLC told players their tickets weren't winners and they didn't know how to read. TLC and G-Tech both knew (read April 3 posting) that the language on the tickets were indicative of winning tickets.

6) Continued to sell Fun 5's tickets for 7 weeks (in reality, it was 9 weeks) even though they were receiving 100 plus complaints per day starting on day one of ticket sales. Players were driving hundreds of miles to go to a claim center to collect their "winnings" only to be turned away.

7) Started an online game - All or Nothing - with a major flaw that could have been extremely costly to the State of TX. Game was shut down suddenly while the problem was repaired by adopting a new rule to correct the massive oversight.

8) Failed to balance the prize payment checking account for 5 years allowing a loss of revenue to the State of Texas though fraudulent acts. Can you imagine - a $3 billion per year industry and the checking account was NOT reconciled. Unbelievable! It was never determined how much money was missing or what happened to it. They simply closed the account and started over with a new one with however much money the bank said they had.

In their in-house investigation, (they were allowed to investigate themselves) they failed to audit one major outlet that may have led them to some answers. But this one item was over looked. The Texas Lottery kept the same staff that failed to do their jobs. No one was held accountable for such negligence. These people are still employed with the Texas Lottery.

9) Texas Lottery failed to report Fraud to officials as required by Gov Code - 321.022. This is serious.

10) Director Grief's "at will firings" caused much havoc. Eventually, the legislature removed this privilege from the Texas Lottery because it was being abused.

11) During the 2009 re-bid of the TLC lottery contract, the TLC revealed that Gartner, Incorporated, the company they retained to draft the RFP, was also a consultant to the incumbent vendor G-Tech during the same time period. The TLC conducted an internal investigation (investigated themselves) to determine if there was a conflict of interest. You guessed it - they concluded there was no conflict! As reported in the news, G-Tech was awarded the contract at a price of millions of dollars above what the TLC would have paid if the procurement process had been monitored more fairly.

Hmmm ... no conflict of interest huh? Interesting ... I wonder why they reported this to the Commissioners?

An excerpt from the Jan 2009 Commission ... "MR. FERNANDEZ: Yes, ma'am. Thank you very much. Good morning, Commissioners. My name is Mike Fernandez. I'm the Director of Administration. And I wanted to give you a status update on the RFP development for lottery operations and services. First, I am very pleased to report that the Texas Lottery Commission issued a request for proposal for lottery operations and services Monday, January the 4th at 4:00 p.m. So we are very pleased, after all of the hard work, to issue that report.

I do, however, want to make you aware of another event. As you are aware, in July 2008, the agency contracted with Gartner, Incorporated, to provide consulting services in connection with the RFP. TLC and Gartner staff worked closely in developing the new RFP, and I believe we have an RFP the agency can be very proud of. I regret to inform you this morning that I canceled the Gartner agreement following Gartner's disclosure last week that their firm is providing contract services to GTECH, which is in direct violation of Gartner's agreement with TLC."

Read transcript, start on page 93, line 1

There was massive bad press pertaining to this RFP - even I did a TV interview at the time and posted stories about the bid.
1) Click here, 2) Click here 3) Click here 4) Click here

12) Lotto Texas winners were cheated out of their rightful winnings - they did not receive all that was in the prize pool. Mr. Grief was not the Director at that time but is/was aware of the situation. Since becoming Director, he has done nothing to right a wrong. See Texas Lottery spreadsheet showing monies transferred to Reserve and not paid to the winners. By the same token, notice too how many winners were paid more than what was in the prize pool. There are multiple stories on this issue. Here's the first story.

13) In a Fun 5's deposition, Mr. Grief makes it very clear that he doesn't care what players want and had no concerns that his agency was receiving 100 calls per day. Nearly 2000 Texas Players have viewed his deposition and have expressed extreme discontent. NOTE: Elected officials should simply ask the Texas Lottery to provide them with a copy of Mr. Griefs deposition. I would strongly urge all elected officials to watch it.

14) There's a number of other things I could include in this list, such as Mr. Grief's trip to Delaware where he lied and the Governor called his hand on it 1) Dallas Morning News, 2) Lotto Report (read Nov 9, 2015 entry); and when Mr. Grief led the Commissioners to believe the Texas Lottery designed All or Nothing when the truth was it was played in Ireland exactly as it is playerd here, 1) click here Houston Chronicle story; 2) click here (transcript). But this is more than enough - should there ever be an investigation by outsiders, I'm sure other things would surface.

In Conclusion ....

Do you think Mr. Grief can restore integrity to the MUSL games? It's my opinion, to restore integrity, one must have integrity. But more importantly, transparency is a vital ingredient of integrity. Something the Texas Lottery lacks under Mr. Grief's watch.

I will be requesting a copy of Mr. Grief's response to Senator Thune's letter. When I get it, I will post it for you to read.

The Senators name and address is on his letter. Here is an opportunity for lottery players everywhere to voice their concerns. If enough of you speak up, we might see good changes to our games. The Federal Government needs to take a close look at the damages caused to people financially. These large sums of monies generated by large jackpots are actually costing the government money by way of food stamps, welfare, foreclosures, and family abuse. With Powerball and Mega Millions, things are out of control now. No single person needs to win $1 billion dollars. It's an absurd amount of money.

Comments? Email me.

US Senator John Thune Letter To Grief

- All Texas Games -
Pick3 - Sales and payouts, click here
Daily 4 - Sales and payouts, click here
Lotto Texas - Prizes & sales, click here
Texas 2 Step - Prizes & sales, click here
Cash 5 - Prize amounts & sales, click here
Texas Triple Chance - Sales and % Returned, Click here
Mega Millions - Lottery Sales by the draw, click here
Mega Millions - Lottery Sales by State, click here
Monopoly Millionaire Club (Sales by State), click here
Lotto Texas - Lottery Sales by the draw, click here
Powerball - Sales by State, click here
Powerball - Lottery Sales by the draw, click here


Texas Lotto Report
(All About the Texas Lottery)
Dawn Nettles
P. O. Box 495033
Garland, Texas 75049-5033
(972) 686-0660
(972) 681-1048 (Fax)