Read about the TLC employees ... Click here and read Oct 9th entry.

Feb 5, 2004 - I have news but not enough time to cover it all today. But, I do want to answer your questions about the proposed rule to change Texas Two Step.

On Jan 30, 2004, the Commissioners did approve proposing a rule change for Texas 2 Step. However, the only change they are proposing is to allow the Executive Director the flexibility to change the draw days without going through the "formal process." I don't believe anyone would object to this change.

However, there are two things about this game that are NOT fair to players and that is (1) the guaranteed prizes and (2) the reserve fund. Because they are not proposing changes to the prize structure, they can't change this aspect of the game even if they received comment. Therefore, I will NOT be posting a comment form for this rule change.

For those of you who may not understand these two issues, let me explain. The rule states that "players SHALL receive 50% of sales." But when any game offers "guaranteed" prizes, there is NO guarantee that players will actually receive 50% of sales. In fact, this is how lotteries keep a bigger piece of the pie as they "over allocate" the amount of money needed to pay winners the "guaranteed prizes."

The game also has a "reserve fund" which comes from the players share of sales. So what is the purpose of having a "reserve fund?" They have it "just in case" there is not enough money to pay the guaranteed prizes.

The solution is to offer NO guaranteed prizes and simply let the winners, in each prize category, divide 100% of each category's share of sales. This is how Cash 5 is paid and is the ONLY game where players "really" see their full share of sales.

Just so that you know it ... As of this writing, Two Step players have been shorted by an est $505,692 since inception and the figure WAS much higher. Lotto Texas players have been shorted by an est $127 million since its inception and this is a direct result of "guaranteed prizes and reserve funds." FYI - The state keeps this money even though the rule says "players SHALL receive 50% of sales."

More later ...

Jan 21, 2004 - For those of you who have already read yesterday's entry and are asking what the solution is for the TLC, I have inserted a new paragraph in yesterdays entry to address this issue. You can either click on "new paragraph" above or scroll down to the next to last paragraph. If you would like to see what the terminals look like, click here.

Jan 20, 2004 - My sincere apologies to the Teachers of Texas and to the People of Texas ...

First, to the Teachers - I'm sincerely sorry - ya'll are RIGHT in everything you said to me. I admit, I knew that you and your school districts were suffering severe financial hardships and that many of you were paying for your own teaching supplies as well as furnishing supplies for your kids from your own "reduced" paychecks. I'm guilty, I didn't use my common sense when I posted the first comment form regarding the self service terminals.

I agree with you ... the funds the TLC is spending for the self service terminals was a stupid, stupid move on the part of the state and I should not have endorsed it any way. The money could and should have been used more wisely and especially in times like this.

I posted that form on Thursday, Jan 8 - left town on Friday and when I returned on Saturday, it was my press week-end. Because I was behind on my work, I didn't start reading your messages until Monday afternoon and by then, I had received in excess of 6000 comments. Ya'll ganged up on me! Anyway, the majority of you told me how in-appropriate it was to say, "Self service terminals could be a good thing" under our current economic conditions. I was wrong and I see that - OK?

Now, unfortunately, I have really bad news for you and yet another apology to make. I was wrong last week when I reported that "purchasing self service lottery terminals," better know as SST's, "had not been approved." It appears it was up to just one person to approve this spending and he did it last Aug. 29th.

I can only say it appears that the words so freely used by our elected officials - "will of the people" and "the Peoples voices must be heard" does not apply to how the state spends our tax dollars or even in what we want in way of the lottery games. I can say this because the purchase of these terminals was never discussed in a commissioners meeting prior to the actual signing of the contract.

Regan Greer, Executive Director of the TLC explained to the commissioners on Sept 11, 2003, "Rider 4 of the agency's bill pattern for fiscal years '02 and '03 provided that the agencies subject to exceeding sales estimates projected by the Comptroller of Public Accounts will be appropriated additional funds for the purpose of fulfilling contractual obligations."

For the TLC, fiscal 03 ended Aug 31, 2003. So on Aug 29, 2003, Mr. Greer signed an amended contract with G-Tech to obtain 1000 self service terminals and 8000 LED's and he did NOT need permission from anyone to buy them. And, IF he entered into this contract BEFORE the end of fiscal 03, the law apparently stated that the state would appropriate funds to fulfill any contractual obligations.

He did say, "My staff and I also contacted key members of the legislature. We contacted the governor's office, as well as the staff and the lieutenant governor's office, the Legislative Budget Board and the state controller's office regarding this matter." (I can't help but wonder if he told all these people the "whole" truth about the unhappy retailers being a part of his motivation.)

To help you understand things better, below is a "portion" of the transcript from the Sept 11, 2003 commissioners meeting where Director Greer addresses this issue and the commissioners responses. I want you to pay special attention to what's NOT said or on the record nor made public ...

MR. GREER: ... Once the cost/benefit analysis came back, it concluded that there was a one-time expenditure of 12.4 million dollars to Gtech for installation [of self service terminals & LED signs]. And after that, the agency would not incur any further direct costs in conjunction with this action. (But ... how much is the TLC paying to lease or purchase the terminals? Installation comes after the initial "sale" made by G-Tech.)

As a result of the installation of the thousand self-service terminals and 8000 LED signs, the agency projects incremental sales in excess of 25 million dollars annually. And after deducting indirect costs of approximately 14 million dollars annually attributable to payment of prizes, retailer commissions, and lottery operator fees, that there would be an additional net revenue to the State of approximately 10.6 million dollars annually in a projection. (First of all, the TLC hasn't had an accurate projection yet. And, the 14 million dollars is $12.4 million for installation, $1,250,000 in 5% commissions to the retailers and the remaining $750,000 is probably going to G-Tech each year from the additional $25 million in sales that they "project.")

This would amount to over 70 million dollars through the remaining projected life of the contract. I remind you that the contract with Gtech is up on 8/31/2011, but it does contain a termination at will provision. And I provided a detailed cost analysis in your notebook to go into more detail on this matter. ("More detail?" Does that mean, "Hey Commissioners, look in your notebook to see how much we're spending up front - we don't want to say it out loud - the people might get mad or have something to say about it if they know?"

MR. GREER: ... Pursuant to the authority that allows the executive director to contract with a person to perform a function, activity or service in connection with the operation of the lottery, I signed a contract amendment on August 29th, 2003 with Gtech to provide self-service terminal -- terminals and programinal -- programmable -- those are hard words -- programmable LED signs across the state. And it is anticipated the installation of these items will take place during the fiscal year of '04. And I wanted to break at this point and answer any questions or concerns you may have on this and discuss it further.

COMMISSIONER COX: Mr. Chairman, I have one observation. In my discussions of this matter with Director Greer, I pointed out to him that Gtech would benefit from this in that they share in our sales and asked him whether the pricing from Gtech took that into account. And he assured me that it did. ("The pricing?" Just how much is this costing taxpayers? How many millions is Texas paying G-Tech to manufacture these terminals? Why is this not spelled out in an open public meeting? This is a major expenditure in rough economic times.)

MR. GREER: Yes, sir. It did.

CHAIRMAN CLOWE: You stated this is clearly within your authority and I assume there's legal advice to back that up. You also stated that you discussed this individually with the commissioners, as well as others and in no way told any commissioner what any other commissioner had said or asked for them to make comments that would affect your communications with other commissioners.

MR. GREER: Yes, sir.

CHAIRMAN CLOWE: So you included the commissioners in your decision-making process, but as individuals? (And was this business conducted by phone? A subject that is clearly public business and decisions involving this kind of expense to taxpayers are made by phone?)

MR. GREER: Yes, sir.

Folks what you need to understand is that all state agencies were told to cut budgets and cut spending. But ONE MAN ALONE committed Texas to spend millions and millions of dollars so that SOME retailers can have two lottery terminals in their stores. Lottery sales do not warrant this expense - especially when the state is in a financial MESS and the TLC is closing 5 claim centers due to "lack of business."

What Director Greer "really" did was give SOME retailers a raise (and they were demanding more money OR else). In the near future, the "special" retailers will only be cashing winning tickets for players and that's it. That's because the self service terminals will sell and check players tickets while 15,000 other retailers will still be facing hundreds of thousands of additional transactions DAILY without getting paid for the time and work they do. Talk about discrimination and a waste of money - as ya'll so kindly pointed out to me!

FYI - The hundreds of thousands of additional transactions that the retailers are complaining about are a direct result of previous rule changes that the People opposed in the first place. You know - a new Lotto Texas Bonus Ball game that increased the prize level from 4 to 8 prizes with 3 of the prizes $3 and $5 (significant increase of transactions for retailers without pay); two to four to six Cash 5 drawings per week and a new $2 prize (significant increase of transactions for retailers without pay); went from 6 to 12 Pick3 draws weekly without doubling sales; a new game with 9 prize levels of which 4 are $10 and less and two prizes are $150 (another significant increase of transactions for retailers without pay) and let's not forget the introduction of Texas 2 Step. Again, 7 prize levels of which 5 requires retailers to pay prizes for the TLC without pay.

And so the TLC purchases/leases 1000 terminals yet there are 15,000+ other retailers that have this very complaint too - the money spent won't take care of ALL and it's money that should have been spent elsewhere. This incident reminds me of the TLC's high dollar office lease that's been the talk of Austin for a very long time and resented by many.

And finally - these terminals will be robbing unsuspecting players of their winnings because the terminals can and do err in reading winning tickets and the TLC has every intention of allowing and encouraging players to check their tickets via the terminals. Unfortunately, most players never know when they have a winning ticket because they count on the terminals to check their tickets which is a MAJOR valid complaint of the retailers as well.

What this boils down to is, the rich get the luxury items while the little guys suffer. And by that I mean, the school teachers, the school districts, the kids that were cut from insurance programs and the small, independent retailers who works hard for his money.

The solution to the retailers problems and the states decline in "online" lottery sales could have been FREE. All the TLC had to do is change the prize structures on the online games (give players prizes they want and games with reasonable odds) and write one simple rule or law that says, "Players shall bear the sole responsibility of checking their own tickets." This would protect the players and substantially reduce the number of transactions the retailers are having to make without pay.

In conclusion, I sent Director Greer an email this morning asking him how much the state is paying G-Tech for these terminals. As of this writing, he has not responded. I have also placed calls to several key legislators with this question. So, I will get an answer.

I will have more to say in coming days - so stay tuned.

Jan 13, 2004 - Yes, I AM aware that many class rooms don't have computers and children have been cut from medical services and fees have gone up for everything and on and on and on. WOW - did ya'll ever put me in my place these past few days. I've changed the form to complete opposition regarding retailers having two lottery terminals using taxpayer money. I have now posted the comments that ya'll demanded that I post. OK?

I'm guilty - I believe that retailers deserve a raise but as you're so kindly telling me, maybe this is really NOT how they should get it - period. And YES, you can re-submit your comments and when I receive a second comment from you, I will discard the first one you sent. OK?

If you don't know what I'm talking about, click here to read what the TLC is proposing to do now and please DO comment. Also, on this page you will find the answers to most of the questions you have been asking me though I'm still trying to read all my mail. A "Q & A" can be found under the form itself and the questions include:

Will it do us any good to comment?
Why do they want "self service terminals?" Isn't this going to cost the state alot of money?
Do retailers deserve more money?
Will ALL retailers have self service terminals?
Will the TLC have comments in favor of this new rule?
Has the TLC already purchased new terminals like they purchased the new balls and machines for the 5/44 rule before it was adopted?
Is it true that stores have actually collected the players winnings but the player didn't receive his winnings?
How can the terminals misread our tickets?
Will you be posting your letter of comment?

More later.

Jan 8, 2004 - Ya'll keep asking me, "Why are there no Lotto Texas winners?" The answer is simple. They are ONLY selling between 3 to 4.5 million of the 47.7 million combinations for each draw. And, most of the tickets sold are Quick Picks and those contain many, many duplicate numbers. I'm sorry there's no winners - they simply gave you a game that you "probably" wouldn't win - it was purposely designed to "roll." I strongly recommend that you QUIT playing the damn thing - quit wasting your money. I know you can do better things with your money than to throw it away like this. I quit and there isn't a drawing go by that I'm not thrilled that I quit losing my money. I do play Pick3 - at least it's winnable and offers decent payouts.

More later.

Jan 4, 2004 - I had no idea so many of you thought that you had to be a member, subscriber or have a password to read the pages on my web site. I realize that some of the newspapers and TV station web sites makes you sign in and provide personal information before you can read their stuff, but that is not the case here. I have NO pop ups and I do not put cookies on your computers. This site is completely free for all - so just read whatever you want.

Dec 27, 2003 - Mega Millions failing miserably. Read stories that appeared in the Austin American Statesman. Also, here's one that appeared in the Standard Times. Both of these links are to pages on my web site.

Dec 23, 2003 - Today I received the "Trends Report" that I mentioned in the Dec 19, 2003 entry - I should have had this report last week but I believe that because sales were down so bad, they didn't send it to me so no one would see it. At any rate, I've posted it now. When you click on the link here or on the graphic above, remember, it's a pdf so it takes a couple of minutes to load. Just be patient.

I want to wish all of you a very Merry Christmas and I hope you all have a safe and Happy New Year. God Bless You All.

Dec 19, 2003 - So you read and heard today where the TLC announced "online sales" were UP again? Baloney! My calculator says otherwise and I do track sales to the penny. I'm quite certain that if the TLC added sales for the dates shown below, they too would get these figures based on their unaudited sales figures. How and why they're allowed to misrepresent things to the public is beyond me. Now see how "online" sales "really" are.

Let me also say that I find it interesting that the TLC did NOT send me the Trends Report this week. I wonder if the reason is the tremendous drop in sales last week? Oh, by the way, sales were down between Dec 2001 thru Dec 2002 too! If by chance you'd like to see audited sales for each fiscal year, click here. More later.