Cash 5 Proposed Rule
16 TAC 401.308
The Lotto Report
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Originally Posted: March 27, 2002
Revised: April 25, 2002
4-25-02 - The Commissioners voted today to adopt the rule as discussed.
A Few Tidbits First
Below is the rule that was published in the Texas Register on
I think it's important for you to know that the day the Commissioners
Then the release said, "In other developments, the Texas Lottery also
By quoting what Cash 5 "currently" pays in the
What I want you to know is what they failed to say.
After you've read this page, please comment. Links for
The proposed rule ... my comments are in blue italics.
16 TAC §401.308
The Texas Lottery Commission proposes amendments to 16 TAC §401.308, relating to the "Cash 5" on-line game. The proposed amendments provide for a matrix change from 5/39 to 5/37. The proposed amendments also add a guaranteed prize amount of $2 for a match on the new 2-of-5 prize category. The purpose of these changes is to make the game easier to win overall and to provide players with more chances to win. Currently, the overall odds of winning are 1:100 and the proposed new overall odds of winning will be 1:8. The current game statistically generates approximately 5,000 to 6,000 winners per draw. The proposed changes will statistically generate approximately 54,000 winners per draw. The proposed changes also increase the number of draws a week from four to six. The purpose of the draws per week increase is to increase sales and also revenue to the State of Texas. The proposed amendments also eliminate language that indicates unclaimed prizes go to the prize reserve fund. Pursuant to Government Code, §466.4075, unclaimed prize money shall be deposited to the credit of the Texas Department of Health state-owned multicategorical teaching hospital account or the tertiary care facility account as prescribed in §466.4075. Another proposed change is to correct a typographical error.
The preamble makes the proposed changes sound very attractive and some of them are, however, the TLC fails to mention the new prize allocations. I explain in depth the new "(2) Prize Pool" below.
(1) Advance Play--A player may
purchase a Cash 5 ticket for any of the five [
6 draws per week will result in smaller jackpots and smaller prizes as many players will simply spread the same dollars over the 6 draws. Some players who play special numbers may quit altogether because they can't afford to play all draws. I oppose this change.
(2) Multi draw--A player may purchase a Cash 5 ticket for up
to 12 [
(3) Number--Any play integer from one through 37 [
(4) Play--The five numbers selected on each play board and printed on the ticket.
(5) Play board--A field of the 37 [
Great! Lower the number of balls and improve our odds! I'm for this change.
(6) Playslip--An optically readable card issued by the Texas
Lottery used by players of Cash 5 to select plays. There shall be five play
boards on each playslip identified as [
(1) Type of play. A Cash 5 player must select five numbers in each play or allow number selection by a random number generator operated by the computer, referred to as Quick Pick. A winning play is achieved only when two, three, four, or five of the numbers selected by the player match, in any order, the five winning numbers drawn by the lottery.
(2) Method of play. The player may use playslips to make
number selections. The on-line terminal will read the playslip and issue
ticket(s) with corresponding plays. If a playslip is not available, the on-line
retailer may enter the selected numbers via the keyboard. However, the retailer
shall not accept telephone or mail-in requests to manually enter selected
numbers. A [
(3) One prize per play. The holder of a winning ticket may win only one prize per play in connection with the winning number drawn and shall be entitled only to the highest prize category won by those numbers.
16 TAC §401.308(e)(1)
(2) Prize pool. The prize pool for Cash 5 prizes shall be a minimum of 50% of Cash 5 sales. This pool will be allocated into two components. The first component consists of the funds necessary to pay all the fourth prize category $2 prize winners. The first component is obtained by an allocation from the Cash 5 prize pool to the fourth prize category so that all of the fourth prize category shares will each receive the guaranteed $2 prize. The second component contains the remaining prize pool funds after subtraction of the first component allocation and will be referred to as the "residual prize pool". The residual prize pool will be allocated to the first, second, and third prize categories according to the percentages applicable for each prize category.
Notice that most of the language under "(2) Prize Pool" is all new.
On March 14, 2002, Cash 5 sales were $605,801. The TLC gets 50% right off the top leaving the balance in the prize pool (the players share) - $302,900.50.
Based on the odds that 1 (one) in every 9 tickets should match 2 of 5 numbers and will be a $2 winner (605,801 tickets divided by 9 equals 67,311 winning $2 tickets.) 67,311 winning tickets times $2 = $134,622 that is needed for the $2 winners. The prize pool was $302,900.50 so now we subtract $134,622 from the prize pool so we can pay the "guaranteed" prizes. This leaves $168,278.50 in the "residual prize pool." This is the amount of money that will be left to divide among the 3 of 5, 4 of 5 and 5 of 5 winners.
Based on the odds again, one (1) in every 88 tickets should be a 3 of 5 winner. 605,801 tickets divided by 88 equals 6884 winning tickets. In this case, the 3 of 5 winners split 41.77% of the "residual prize pool" which is $168,278.50. So we take 41.77% of $168,278.50 = $70,290. This is the amount the 6884 winners split. $70,290 divided by 6884 = $10 each. (FYI - For the actual drawing on March 14, 6637 players matched 3 of 5 numbers and won $23)
Still based on the odds, one (1) in every 2724 tickets should be a 4 of 5 winner. 605,801 tickets divided by 2724 equals 222 winning tickets. In this case, the 4 of 5 winners split 18.08% of the "residual prize pool" which is still $168,278.50. So we take 18.08% of $168,278.50 = $30,424 and the 222 winners split this amount. $30,424 divided by 222 = $137 each. (FYI - For the actual drawing on March 14, 195 players matched 4 of 5 numbers and won $466)
Finally, we have the 5 of 5 winners who split 40.15% of the "residual prize pool." The "residual prize" pool is still $168,278.50. So we take 40.15% of $168,278.50 = $67,563 and the 5 of 5 winners split the $67,563. (For the actual drawing on March 14, the player who matched 5 of 5 numbers won $60,580)
Notice that 40.15% + 18.08% + 41.77% equals 100%. This is "pari-mutuel" meaning each prize category splits a set percentage of sales. In this case, the amount they split is determined after the TLC takes what they need to pay the $2 prizes.
Now tell me, why hasn't the TLC made prize amounts clear to the players so players can comment intelligently? Will these prizes entice you to play more or less?
I oppose the new allocations. Further, I am extremely angry to see that the TLC "butters up" a rule change and does not disclose all the facts about the rule change. And I'd call this change a MAJOR change.
(3) Prize categories.
(i) The direct prize category contribution shall be 40.15%
Notice all of the prize contributions say "shall."
(ii) If the first [
(i) The direct prize category contribution shall be 18.08%
(ii) If the second prize is not won by a Cash 5 player from the
(i) The direct prize category contribution shall be 41.77% of the residual prize pool for the drawing.
(ii) If the third prize is not won by a Cash 5 player from the drawing, the direct prize category contribution will carry forward to the prize pool for the next drawing.
Offering this $2 prize results in much smaller prizes for those who match 3, 4 and 5 numbers. No one plays Cash 5 to win $2 - this will do more harm than good in the long run. I oppose this change for that reason.
(4) Unclaimed Prize Fund. In the event any player who has a
valid winning ticket does not claim the prize within 180 days after the drawing
in which the prize was won, the prize amount shall be deposited to the
credit of the Texas Department of Health state-owned multicategorical teaching
hospital account or the tertiary care facility account as prescribed in
Government Code, §466.4075 [
(1) Cash 5 tickets may be purchased only at a licensed location from a lottery retailer authorized by the lottery director to sell on-line tickets.
(2) Cash 5 tickets shall show the player's selection of
numbers, or Quick Pick (QP) numbers, boards played, drawing date, and serial
(3) It shall be the exclusive responsibility of the player to verify the accuracy of the player's selection(s) and other data printed on the ticket. A ticket is a bearer instrument until signed.
(4) Except as provided in subsection (d)(2) of this section, Cash 5 tickets must be purchased using official Cash 5 playslips. Playslips which have been mechanically completed are not valid. Cash 5 tickets must be printed on official Texas lottery paper stock and purchased at a licensed location through an authorized Texas lottery retailer's on-line terminal.
(1)The Cash 5 drawings shall be held each week on Monday,
Tuesday, Wednesday, Thursday, [
(2) Cash 5 tickets will not be sold during the draw break
for the Cash 5 game on Monday, Tuesday, Wednesday, Thursday, [
(3) The drawings will be conducted by lottery officials.
(4) Each drawing shall determine, at random, five winning numbers in accordance with Cash 5 drawing procedures. Any numbers drawn are not declared winning numbers until the drawing is certified by the lottery in accordance with the drawing procedures. The winning numbers shall be used in determining all Cash 5 winners for that drawing.
(5) Each drawing shall be witnessed by an independent certified public accountant. All drawing equipment used shall be examined by at least one lottery security representative, the drawing supervisor, and the independent certified public accountant immediately prior to a drawing and immediately after the drawing.
(6) A drawing will not be invalidated based on the financial liability of the lottery.
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