March 6, 2002

Below are the discussions the Commissioners had
regarding proposing a
new rule for Cash 5 and the
discussion prior to adopting the
new rule for Pick3.

Originally Posted: March 27, 2002
Revised: April 25, 2002


4-25-02 - The Commissioners voted today to adopt the rule as discussed.
Once again, the TLC went against the players. Cash 5 will be played
6 days per week, the matrix will be 5 of 37, and the prizes
will be smaller. This will begin July 29th.

Calling the Meeting To Order - March 6, 2002

My comments and questions are in blue italics.

CHAIRMAN CLOWE: Good morning. I call this meeting in the Texas Lottery Commission to order. It is 8:30 a.m. on March the 6th, 2002. My name is Tom Clowe. Commissioner Whitaker is here. Commissioner Criner is absent. We have a quorum, therefore we will go through this agenda and conduct the Commission's business.

On Feb 27, 2002, Governor Perry received an "official letter" of resignation from Commissioner Criner and his resignation was accepted on Feb. 28th. The vacancy was posted on the Governor's web site in February. Why was it not told that he had resigned the post? Everyone knew in early February that there were problems. Yet on March 18th, no one at the TLC would even confirm or deny that he had resigned. This is very wrong. I also wonder, was Commissioner Criner set up so he would have to resign? Was this incident blown out of proportion so he'd have to resign?

The Ft. Worth Star Telegram was the first to report the events leading to Commissioner Criners resignation. It ran on Saturday, March 23 and I was the one who notified the press on Monday, March 18 that Commissioner Criner had resigned. All news outlets contacted the TLC but the TLC "claimed" they knew nothing about it.
A link to read the story is at the bottom of this page..

The Presentation that Convinced the Commissioners
to Propose a Change For Cash 5

CHAIRMAN CLOWE: We have some outside individuals who would like to make a presentation this morning. And in order to hear what they have to say, we'll go immediately to Item Number 11 on the agenda which has to do with proposed amendments to the rules relating to Cash 5 online games. May we ask you folks to come up, please?

MR. KING: Thank you, Commissioners. For the record, my name is Larry King, the account general manager for GTECH, Texas. With me is John Catigan, vice president of marketing for GTECH. Ramone Rivera on the keyboard over there. We're here today to talk about Cash 5 and some of the ideas that we have concerning the game and really give you an overall pictures of where sales are, and some of the recommendations we may have. I will turn it over to John Catigan.

MR. CATIGAN: Who will turn it over to Mr. Tirloni.

MR. TIRLONI: Good morning, Commissioners. For the record, my name is Robert Tirloni. I am the online product manager for the Lottery. I just have a brief introduction. Commissioners, the introduction of the Texas million game back in May of 1998 and the replacement game for Texas Million, Texas Two Step which was introduced in May of 2001 both took a toll on the five-digit game, Cash 5, which were introduced back in 1995. Even before those two games were introduced, Cash 5 sales had already started to see a sales decline. (Yes they certainly did. Cash 5 sales started declining when the Cash5 went to 4 draws per week instead of twice a week.)

Well, different options have been reviewed to enhance the game by keeping its five of 39 matrix in place. At this time staff has come to the conclusion that the time is now right to change the matrix to a five of 37 matrix. This matrix change incorporates a new prize tier. Players will receive a guaranteed two-dollar prize for matching two out of five numbers. Our proposal is that the game will become a daily game with drawings taking place every evening, Monday through Saturday. And the overall odds of winning will go from one in 100 to one in eight. Right now the Cash 5 game in Texas is, unfortunately, one of the hardest cash games to win in the entire nation. So we're happy about that change. (In the recommended changes described here, you failed to tell the Commissioners how the prizes would be affected. That's the only thing you left out. I wonder, is that because it is a very negative aspect of this proposal?)

COMMISSIONER WHITAKER: And with the change, it will become, what, in the nation?

MR. TIRLONI: There is a slide in the presentation that shows all the overall odds. It puts us in much better standing, though, instead of being way at the top. Well, the current Cash 5 game generates approximately five to 6,000 winners per draw. This new proposed matrix is projected to generate approximately 50,000 winners per draw. Doctor Randy Eubank has reviewed this matrix for accuracy. And we did conduct focus group tests on this matrix. Research was conducted in the cities of Houston and Corpus Christi in late January and the matrix with the features I've just described were very well received by players. And I will turn it over to John Catigan. (Of course players would like better odds. There's no disputing that statement! But surely you told the focus groups about the new payouts. Did they like that part of it?)

MR. CATIGAN: Thanks, Bob. Good morning.

CHAIRMAN CLOWE: Good morning.

MR. CATIGAN: Pleasure to be back here. I was here almost two months ago to the day. We worked on the Pick 3 game at that point. And as Robert just alluded, we're going to take a look at Cash 5 here. The agenda will consist of a brief history of this particular product line in the United States. We'll take a look at the performance certainly of the product. And then for the Texas Cash 5 performance. Look at the proposed change and talk about the all important revenue projections.

The Cash 5 type of game or product line came into the industry in 1987. Here you have a map of the United States showing those states in light blue, light blue here, that had a Lottery back at that point. The state of Illinois in a series of research talking to Lotto players as well as other states discerned that Lotto players were a little disgruntled with Lotto-type games. And the research coming back at that particular point. Players were saying, look, I am never going to hit a six of 50 game. That's -- the odds are too high. And plus, I'd like a game that gives me a cash prize. And hence, in '87 Illinois launched the first industry Cash 5 game.

Today in light green here you see just about every Lottery in the United States offers a Cash 5 game. Let's take a look at the performance across the nation of these games. Now, we're going to talk here in terms of per capita performance. That's weekly sales divided by the state's population. And I have got about, oh, I'd say two-thirds of the jurisdictions in the United States that offer Cash 5 games here. There's a whole host. This is ranked on 2001 performance, weekly per capita performance. There is a whole host of other jurisdictions that fall below the eight cent range that don't make it to this chart. Texas is certainly in the top half, probably the top third of performance. And here you have a whole -- I know the commissioners can see this. You have weekly per capita performance from '96 going forward. The general slope of these games once they come in is a slightly downward slopes.

Now, states, individual states, have done things to their own Cash 5 games to keep those sales up a little bit. We came out with a very good per cap here in Texas of 32 cents. And over the last few years it has slipped down to its current 12-13 cents as alluded to by Robert in his opening comments. Any questions on this? Okay. Let's move on.

I've talked before when I've been down here about the states you cluster with. Texas clusters with New York, Florida California demographically speaking, size speaking, product offering speaking. When you look at the comparison of Texas to those three other states, you see that Florida and New York have a weekly per cap that is significantly above both Texas. And certainly significantly above California. 45 cents. 37 cents, excuse me. 12 cents here in Texas. In California, eight cents.

Let me just say this about Cash 5 products. They are very sensitive to advertising expenditure in support in the marketplace. States that tend to have a higher per caps, such as New York and Florida tend to put the advertising dollars behind these games, or those two particular games, and they periodically adjust the game with draw increases, prize payout increases, etcetera. Things we're talking about doing with Cash 5 here. Here is the life cycle or life sales trend of Cash 5 here in Texas. It came out in '96, as you can see. And had a very good start with 35 cents, 30 cents averaging. And you see what happened when we went from two to four draws. An immediate uplift in sales.

(Yes, overall sales did increase because there were 4 draws per week bringing in money instead of just 2 draws. But the increase in sales was VERY short lived because (1) the players just divided their dollars among the 4 draws instead of the 2 draws and, (2) the jackpot amounts for each draw decreased so significantly. Players were accustomed to seeing $150,000 to $200,000 jackpots per drawing but that figure fell dramatically. Of course, the reason the jackpots were smaller is because there was less money in the pot - less money to divide among the winners. Today, Cash 5 averages $240,000 per week in sales when it use to do that in one draw. Plus other games compete for the same dollar and that hurt Cash 5 too.)

And again, states that have kept their Cash 5 games moving horizontally as opposed to precipitously downward have tended to do that type of activity, adding draws, changing matrix, etcetera. The introduction of Texas million definitely hurt this game. This was probably the time where we should have come down here and recommended going to six draws to be honest with you. The game continues down. Texas two step comes in. Doesn't impact it too much. What we're talking about here today with the additional draws, the re-sizing of the matrix creating more winners is going to take this particular line here at this point and bring it up probably in this area here. Any questions? This is my big action slide. Okay.

Just a little schemata here. Sales, sequence of events, what lotteries, especially lotteries that nurture and care for this product line, what they've done is historically added draws first to get a pretty good size bump. Next they will consider reducing the matrix or re-sizing the matrix downward giving players easier odds. And of course, in doing that generally they create more winners. So these are the three steps to success with this particular product. All of which the Texas Lottery has incorporated in this recommended change. Okay. Here you have -- and Robert alluded to this earlier. Here you have all of the states, I believe we have all on this particular slide here, that offer Cash 5 type games. You can see the different names they fall under. Fantasy 5 in Georgia, Jersey Cash, Montana Cash. The theme of cash, again, coming in. And unfortunately, you can't see this, but it is ten all the way down to about Indiana, I think actually runs a game with one in four or five overall odds. And as you can see, Texas is up here with one in 100 odds. That is, if you bought this game every draw for one-year period, you would have a -- theoretically, you would have two winning experiences every year. Okay. Not a great deal for the consumer. ("Not a great deal for the consumer." Boy, you got that right!)

MR. TIRLONI: In Florida -- where you have Florida in Fantasy 5, that's the first state that has overall odds of one in eight. So Florida, Ohio and West Virginia are the states that have overall odds of one in eight. That's what is off to the side over there.


MR. TIRLONI: So we'd be right -- if these rules were eventually adopted by the Commission and Texas had overall odds of one in eight, we'd be clustered right over there with Florida, Ohio and West Virginia in terms of where -- I am just addressing what Commissioner Whitaker asked about earlier. If we made changes, we'd go from being at one in a hundred overall odds to where -- to one in eight.


MR. TIRLONI: And the overall odds are off the slide.

MR. CATIGAN: Okay. Here is the problem. It's my fault here. This is another cash type game that Florida runs. It is not Fantasy 5. That's my mistake. Thank you, Bob. This is actually called Mega Mega Cash. It is a Fantasy 5 type game. It's -- they have two games in Florida. That's one in 30. The game over here that Robert is referring to is the Florida Fantasy 5 game and that's one in five or six, whatever he said right there. Okay. I took and plotted that -- this just to show the relationship between overall odds and per capita performance. Here is New York and Florida and Pennsylvania up here at a weekly per cap of 35 cents, plus. And here are the overall odds. This is Texas out here with overall odds of one in a hundred and the per cap being right at about 12 cents. (You sure are doing a good job at selling the new odds being proposed in this rule change. I'm certain all players would vote for 37 balls instead of 39 balls. But I'm curious, when are you going to get to the part about the new proposed prize allocations? OK - I'll be patient.)

COMMISSIONER WHITAKER: Why would you have so many folks clustered at this end even with the low odds?

MR. CATIGAN: Right. And -- this is what this slide shows. That overall odds is not singularly the most important thing when it comes to this game. Okay. It is creation of more winners. It is the advertising that goes behind it. There are other things. This is a one variable model showing the relationship between per cap and overall odds. Yes, you know, if this was the most important ingredient to success for this game, you would see a relationship like that. This is still somewhat of a significant relationship. Okay. The proposed change. Let's talk about the recommended change, specifically what we're looking to do with the game. Here you have the current five of 39 game. And for the purpose of discussion, say that sales, draw sales now, draw sales of 400,000 where we have a top-tier winner. This is how the game would play out over a year's period. You would create currently per draw around 4,000 winners. Okay. That's the five of 39 matrix where you have a top-tier winner. And these are the prize payouts that each of the winners would receive. On average $41,000 for the top and $26 for the Match 3.

(Whoa ... did you say $400,000? You're using that figure to tell the Commissioners what the prizes would have been been under the current rule . Cash 5 sales have never been that low though they will be when and if you add 2 more draws.)

The proposed matrix change is going to result in this type of configuration here. Excuse the double printing of the words there. We're going to have -- the big change with the new game, is the Match Two prize. This will be the only game in the United States that for a Match Two of five of 37, you are going to receive a cash prize of two dollars. New York does their prize and California -- Florida does their prize -- no. California on the Match Two, but it is a free ticket. And trust me when I tell you that players don't perceive a free ticket as a prize. (Once again, you're absolutely right. But you know what else, players don't care about winning $2 either.)

So here what we're proposing to do is for Match Two, which is odds of one in nine, you receive a two-dollar cash prize. That is going to drive on average 50,000 winners per draw. That should infuse excitement back into this game and help get to the projections, which you will see in a minute. Again, this is the case of when we have a top-tier winner. One of the beauties of the current game here is that when we don't have a winner, we do what? We will roll that money down to the floor level. Okay. And let's take a look and see what happens in that case. New -- current games to new game. So at 400,000 a draw -- no.

MR. KING: Next line.

MR. CATIGAN: Next line. With no top-tier winner, here's what happens currently, with your current five of 39 game, you don't have a top-tier winner, that money rolls down into -- on average $847 for the Match 4. And again, 26 for the Match 3. For the new game what we're proposing when there is no winner, what will happen, that top-tier money will roll down to a prize of $430 for the Match 4. $10 for the Match 3. And again, two dollars for the Match 2. Again, 50,000 winners versus 4,000 winners. That's the big attraction for the current set of the changes in my opinion. (WHAT? If there's no 5 of 5 winner, then the 4 of 5 winners under the proposed rule would only receive an average of $430 instead of $847! Right now, matching 4 of 5 numbers with a winner pays between $500 & $600. Surely you're going to tell us how much 4 of 5 winners will receive when there IS a 5 of 5 winner under the new rule. OK - I'll be patient. But if you don't tell them, I will)

Two things here. You are adding two draws. That in itself, if you did nothing else with the matrix, would drive sales. We know that. (We do? It appears to me that when they went to 4 draws per week this same plan went sour in a very short length of time. Smaller prizes don't entice play and if this rule is adopted, the prizes will be reduced GREATLY.) Adding the two draws plus making the game more winnable, far more winnable, is what is going to take this game and bring it up significantly on a per capita basis. Okay.

And lastly, let's talk about the revenue projections. For some recent 52-week period the current game generated, again, some 52-week period, a $124 million for that time frame. Which generated to the Texas good cause $47 million. At some recent 52-week period, very recent. With the proposed changes as stated by Bob, and you have seen the changes here, we estimate that you are going to come out and over a 52-week period from March to about a 15 percent lift in the sales. Okay. That's on average. And that's what our statisticians back in corporate are telling us will be the effect. What will happen in reality: This game with those changes will come out and right out of the box we'll do about 20 to 25 percent above where it is today. Okay. It will slope down somewhat, as they all do, all these games when they go through these changes. And you will see it probably slowing to 12 percent. So we project about a 15 percent. (It is my opinion that as soon as the players see the how much the payouts are compared to what they were, they will get disgusted and back off. Just like they've done in Texas 2 Step. Tell me, are sales 15% to 25% higher now than they were when there were just 2 draws per week? I don't think so.)

MS. CLOUD: Commissioners, I would like to point out that this particular spot in our fiscal note for this game in the rule, our projection was an increase of 10 percent, not 15. And we're hoping that there is 15, but we were being conservative with our fiscal note projections.

MR. CATIGAN: I am sure I will be back at some point in the future, and I think you will do --

MS. CLOUD: We track your projections. We keep up with what we're doing compared to what you said we are going to do.

MR. CATIGAN: Okay. That's basically the gist of the presentation. I will certainly entertain any questions.

CHAIRMAN CLOWE: May we have the lights, please? Any questions?

COMMISSIONER WHITAKER: No. That was a pretty clear presentation. I mean, what would be the likely criticisms of these changes, if there were to be any?

MR. CATIGAN: Okay. I will put on my Doc hat. What would be the -- oh, we can all be honest. I suppose some might not like to see an increase draw to a particular Lottery product offering.

Yes, that is partially correct. Players, including me, do and will object to 6 draws per week. We objected when the TLC went to 4 draws per week. This is a state lottery, not a casino. But more important than opposing the 6 draws aspect ... I've notice by reading the transcript that still no one has discussed the prize allocation changes or explained the new "residual prize pool" to the Commissioners and the visitors who were present. How can anyone oppose that aspect of the proposal when it's not even been discussed or mentioned?

Since I wasn't present at the meeting and I didn't physically see the charts presented, let me ask, did the charts show what effect the new prize allocations would have on the amount 3 of 5, 4 of 5 and 5 of 5 winners would start receiving with and without a top prize winner? Why didn't anyone question the effect those figures would have? I can assure you , when players match 3 of 5 numbers and receive $10 instead of the usual $20 to $30 or when they match 4 of 5 numbers and receive $137 instead of $500 to $600, Cash 5 sales will take a dump just like the Texas 2 Step has done. What then? People don't care about a $2 prize and it appears to me the stakes are entirely too high to start paying for matching 2 numbers. But we'll see - I plan on asking the players how they feel about winning $2.

COMMISSIONER WHITAKER: From what to what? How many a week?

MR. TIRLONI: It has gone from four in a week to six.


MR. CATIGAN: Every Lottery -- if I can piggy-back on that comment I just made? Just about every Lottery in the United States is offering this product either six or seven days a week. (Is this because their sales per draw keep dipping and they are searching for ways to at least bring in the same amount of money per week? This sounds like they keep failing and are grasping at straws. The way you get sales up is to offer bigger prizes and two draws per week would do that? But who would know this, no one's ever tried it.) I think we've, together with GTECH, maybe the Lottery has been a little remiss in pushing this game with some of these changes. Again, just about every Lottery has done the things we have recommended and done them sooner into -- after the introduction of the product than we have.

COMMISSIONER WHITAKER: And why did we wait, Linda?

MS. CLOUD: I don't have a good reason for having waited this long. I know we have had other games that changes -- it is very difficult to make more than one game change at a time. With our rule-making process is slight in that when you have more than one game, it just makes it real difficult.


MS. CLOUD: And it adds confusion to players when you change more than one game at a time, they get confused. And the only objection I think, and I don't know but one person (would that be me?) that would probably have this objection, is going to six days a week when they think it should be a two-day-a-week draw. We cannot recover sales for this game at two days a week. (Linda, I respectfully disagree with you on this. I think the TLC could get back to where they were in 1996 with Cash 5 because people have simply taken their "allocated gambling monies" and spread it into 4 draws per week. This resulted in smaller prizes thus creating the image that the game was a loser which added injury to insult. How many times have you said that sales are jackpot driven? When people think the pot is $150,000 instead of $60,000, they tend to put more efforts into stopping to purchase that ticket. Not to mention the excitement. It's a heck of a lot easier to win this game based on the odds of 1 in 575,757 than it is to win with odds of 1 in 26 million such as Lotto Texas offers. Word of mouth has damaged this game and it was caused by the reduction of the pots which is a direct result of taking it to 4 times per week. Cash 5 is the only game that I recommend because of the fact that players can win it and all that is in the prize pool is paid out to the players.

CHAIRMAN CLOWE: Does this require a motion?

MS. KIPLIN: Yes, it does Commissioners. In the rule-making itself we are also -- staff is also wanting to notice up a rule-making comment hearing, which would be April 4th at 9:00 a.m. That will be at different location because this room will be under construction. It will be over at the Texas Department of Housing and Community Affairs. The motion that staff would like for you to consider making today is a motion to propose these rule amendments for public comment and publication in the Texas Register.


CHAIRMAN CLOWE: Second. All in favor please say aye. Opposed, no. The vote is approved two-zero. Thank you, gentlemen. We're now ready to go to Item Two on the agenda. ...

The presentation sounded really great - lowering those odds and creating so many more winners is definitely a positive move. Even though I don't believe anyone cares about winning $2. However, I am shocked that both the TLC nor G-Tech informed the Commissioners about the MAJOR prize allocation change they would be agreeing to if they adopted this rule as it is written today. I wonder, do the Commissioners even know how much one wins today? Why didn't the Commissioners inquire about this aspect - the never before heard of "residual prize pool?" Weren't the Commissioners even curious about who would suffer by paying out all those $2 prizes?

Since I'm giving my opinions - the "residual prize pool" is an excellent way to pay "guaranteed" prizes for Tx 2 Step and Lotto Texas. At least the lottery only gets what it needs to pay the guaranteed prizes which leaves more money to spread among the other winners. Right now what they do is allocate so much from sales and the overages, which there is plenty of, go into a reserve fund. The reserve funds grow big time as a result too.

But, due to the nature of the Cash 5 game and the sales involved, I do not think they should offer a $2 prize for Cash 5. It takes too much money and lowers all the other prizes which hurts sales and jackpot figures.

Audience, what do you think?

- End Cash5 Discussion -

Discussion of and adoption of Pick3 Rule

CHAIRMAN CLOWE: We're now ready for Item Nine, consideration of, possible discussion and/or action, including adoption of amendments on 16 TAC 401.307 relating to the Pick 3 online game rule.

MS. KIPLIN: Commissioners, as you will recall, you-all voted to propose amendments to the Pick 3 online game rule and publish those proposed amendments to the Texas Register for public comment. That publication appeared January 25th, 2002. There was also a rule-making comment hearing that was noticed up and was held February 8th, 2002 here at the commission auditorium. There were no persons that attended that hearing. And therefore, there was no comment received at that hearing. The Commission did receive written comment. The summary of the comment is in the document that was provided to you-all. The -- I guess the primary comment was that players did not want a mid-day draw added. My sense for that concern was that they did not want to spend additional money on a mid-day draw. The staff's response, and if you vote to adopt the commission -- the order today or the rule today, is that we want players to play responsibly. We certainly don't want them to pay to play any more than they can afford. It's a game. It's designed to be entertainment. It's not designed to have people commit additional dollars if they don't feel that that's something that they want to spend their money on. (What a good line. Since the entire strategy of the TLC is to get sales up, isn't that the same as attempting to get people to spend more money playing these games? I think you are failing to recognize that the state is full of people who do not nor ever will play the games of Texas. Then you have another group who does play. The truth is, generally speaking, all the money the TLC makes really comes from the same people every day. And ya'll know this. Your explanation sure did sound good but I don't buy it.)

The staff is here today recommending that you-all vote to adopt the rule. We are recommending that you vote to adopt the changes. These changes were not in response to comment, but are not substantive. And it's to clarify references in the rule that are -- that were to director and in reality should have been executive director. This rule was adopted at the time that the Lottery was a division of the comptroller's office, as I recall. And so at that time, the Lottery as the division -- it was the division director that -- who is now the executive director of the agency. So it's just to clean up language that probably should have gotten caught during the rule review. Be happy to answer any questions. Mr. Tirloni is also here today, Ms. Cloud if you have any questions. But the staff is desirous of a motion from the Commission to adopt the amendments to the Pick 3 online game rule with the changes as discussed.

COMMISSIONER WHITAKER: Are there any members of the public here today? Okay. How many comments did you receive total? (WOW - this is a first! This is the first time a Commissioner has ever asked how many comments were received. This sounds like it was a plan to get this number on the record so you can explain to the legislators why the rule was adopted.)

MS. KIPLIN: Oh, Commissioner, I don't keep count of them. I would say probably less than -- I'm going to say maybe 50 comments. There -- the comments were in opposition. There wasn't one comment that was in favor. But the -- generally, comments were in opposition. I would say probably a good many of them were in the form of a petition that had been created by a person. And it was just a tally or -- not a -- I guess not a petition, but a form -- a form comment in opposition. There were some comments that were individual in nature, so to speak.

(How surprised I am that you said "Oh." That's a first too. This sounds like a planned conversation to me and a way to get the number 50 on the record.

Two questions for you Kim. (1) Why didn't you tell Commissioner Whitaker that I called you and told you that I was going to post a questionnaire on my web site and your response was, "Dawn, I've already received comment and it doesn't matter to me how much we receive. I know you're sick and you're going into the hospital, you don't have to do this. We already have enough comments." And like a fool, I believed you. I see that it has come back to bite me.

(2) What attempt did the TLC make to let the players know about this change. Did the TLC post a great big notice on their web site and ASK for the people to comment? Did the TLC ask G-Tech to place questionnaires or notices in the stores about the plan to play Pick3 twice per day? Did the TLC include a story about this in your monthly newsletter that player can pick up in the stores? The answer is clearly NO. And why not? Because you know you would have an overwhelming response of opposition to this plan.

Attention players - I feel as though I've let you down on this one. There were 3 reasons I didn't post a notice on my web site for you. (1) This proposed rule was proposed when we were still fighting the Lotto Texas rule to get the work "shall" back in the rule so 6 of 6 winners would have a set amount that they would win. I was bogged down with that. (2) Second reason. The State Council of Competitive Government had issued a report recommending that the TLC NOT make games changes until they had done a "cost analysis" showing the cost vs. the profits for a rule change. They said that they TLC had not done this sufficiently. So I honestly thought the Commissioners would not adopt this rule at this time. (3) I was truly ill and had a hard time keeping up with all that I do.

Not that I've given my "excuse," I will assure you that this will NEVER happen again. Father, included in the questionnaire regarding the Cash 5 proposal, I am addressing the Pick3 rule change. And if you all give me your zip codes, I intend to see to it that your state legislator and the Sunset Advisory Commission receives a copy of your comment.

The truth is, it should be the responsibility of the TLC to make sure players are aware of these rule changes but the "law" says all the TLC has to do is post it in the Texas Register to make it a legal notice. Lottery players in Texas should be considered "consumers" and we should have consumer rights. But the Attorney Generals office has no jurisdiction over a state agency which is what the TLC is and it just so happens, the Attorney General is the person that protects "consumers."

Didn't you ever notice how the TLC got away with falsely advertising the odds on the scratch tickets and how they removed vital data from point of sales pieces that goes to the "consumers?" Well, they can get away with this because NO ONE OVERSEES them because the TLC is a "state agency." Now, show me a private industry that falsely advertised and got away with it. Look at Enron.

COMMISSIONER WHITAKER: I'll move to adopt staff recommendation.

CHAIRMAN CLOWE: Second. All in favor, say aye. Opposed, no. The vote is three-zero -- two-zero in favor.

MS. KIPLIN: Commissioners, there is one issue that I would like to address. And it has to do with the effective date on this rule. If you do not establish a different effective date, then it will be effective 20 days from the date of filing. Mr. Tirloni I think is wanting you to make the effective date a different date. And I'm going to turn it over to him for that.

MR. TIRLONI: I have a quick implementation plan that I'd like to share with you, Commissioners, if that's okay. Commissioners, I've worked closely with Lottery staff and GTECH marketing and sales staff. We have a very aggressive plan in place to introduce the day draw on the Pick 3 game. I can quickly walk you through it. Beginning on Monday, March 18 --

CHAIRMAN CLOWE: I don't think you need to.

MR. TIRLONI: You don't want to? Okay.

CHAIRMAN CLOWE: I think we got it. Does this require a motion?

MR. TIRLONI: No. Just the effective date would need to be Sunday, April 28th.



CHAIRMAN CLOWE: All in favor, aye. Opposed, no. Proposal is approved two-zero.

MS. KIPLIN: Commissioners, I have an order for your signature.

CHAIRMAN CLOWE: The next item is Number 10, consideration of, possible discussion .... etc

Pick3 Rule Adopted - End Discussion

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The Rule Itself
Read the proposed rule. At least I show you
what they are deleting and the new language.
The TLC won't even do this.
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Ft. Worth Star Telegram Story
Commissioner Criner resigns. I wonder, was he set up?
Did the TLC want to get rid of him?
Was this incident blown out of proportion?
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The Lotto Report
P. O. Box 495033
Garland, Texas 75049-5033
(972) 686-0660
(972) 681-1048 Fax