|
|
TLC’s Proposing More Changes
|
|
 |
|
Originally Posted: May 12, 2001 - 3 am
Revised: June 13, 2001 - 9:30 am
|
Players Comments! A petition - the easy way to A letter to sign and mail or |
|
|
------------------------------------------------------------------------------- The TLC has drafted several rule changes - so - we are currently in a comment period. By law, proposed rule changes have to be published in the Texas Registry [a publication] as this is the official way of notifying the people of a state agencies intentions - This is "suppose" to be sufficient publicity to make the people aware of their plans. The Texas Registry is published every Friday and is posted on the internet. This is all that is required for agencies to do before they can adopt a new rule or make a change. If there are no objections, then they post that "no one objected" then proceed to adopt the rule after 30 days. After reviewing the 64 page draft document, I identified several rule changes that I think players should know about. If by chance you oppose these proposed changes, as I do, then it is imperative that you comment to the TLC in writing. One of the biggest misconceptions about Lotto Texas is players think that when the jackpot is advertised at $4 million, $20 million, $50 million or whatever - well, players "think" there is that much money -cash on hand- to pay out .... and this is absolutely, positively not so. What the "advertised jackpot figure" really means is - the TLC hopes there will be enough money from the 6 of 6 winners portion, which is 37.532% of sales, for them to invest to make good on the "advertised" jackpot figure. They have 25 years to earn it. Needless to say, they count on the interest earned. When there is a 6 of 6 winner(s), the Comptrollers office immediately informs the TLC how much money is required to invest to get a return of the "advertised" amount. This is also how they determine the "Cash Value Option" amount. The lotteries do not have the "advertised amount" to pay the jackpot winners - but most people think they do. This is very important for you to understand because in a nutshell, the Texas Lottery is trying to adopt a rule where they can pay 'some' 6 of 6 winners more than their share of sales, 37.532%, and not pay 'some' 6 of 6 winners the full amount that is actually due them. Basically, they are attempting to re-define "pari-mutuel" Since July 2000, I've been posting how much the TLC has been "overpaying" 6 of 6 winners. The reason was to make players aware that the 6 of 6 winners portion wasn't really enough money for the TLC to invest to give the winner a return of the "advertised jackpot amount." This means they've been "over-estimating" the jackpot amounts - and it’s not been by accident or error either. Since 1997, the TLC has paid more than the "rightful" percentage of sales to many 6 of 6 winners. To remedy the current "overpayment" situation, all the TLC has to do is simply quote a more realistic "estimated" jackpot figure. Problem is, they don't want to do this because (1) it entails lowering the starting $4 million figure and (2) they must quit "counting on / hoping for / or praying for" sales they don’t have and can't get. I think it's important for you to know that the TLC always paid the 6 of 6 winners the exact percentage of sales that was due them until 1997 when Linda Cloud took over. In her first attempt to boost sales and not lower the starting $4 million jackpot figure, Ms. Cloud increased the annual payments from 20 to 25 years. This meant less money was needed to invest because it [the money] had 5 years longer to earn interest. Ms. Cloud also added the Cash Value Option and she decided the TLC would start paying the "advertised amount” and not the "actual percentage of sales" as had always been the way. Perhaps Ms. Cloud was afraid of getting caught "not" paying what was required to give a return of the “advertised amount.” The most important thing for you to note at this point - Ms. Cloud did not propose to add this change into the rule but now she wants it added and adopted. The reason, it’s the only legal way she can take prize money away from some 6 of 6 winners to help her offset what she's overpaying other 6 of 6 winners. To help you put all this in perspective, the following facts should do the trick. It’s really very simple. For the April 25, 2001 Lotto Texas drawing, the TLC will probably overpay the winner by $748,697.20 because there's only $1,457,946 in the prize pool but it requires an investment of $2,206,643.20 to get a return of the “advertised” $4 million over 25 years. (Sales were $3,884,541 - winners portion is 37.532%.) Do you think this is fair? For the April 21, 2001 Lotto Texas drawing, the TLC will overpay the winners $857,655 because there's only $12,865,035 in the prize pool but it requires an investment of $13,722,690 to get a return of the “advertised” $25 million over 25 years. (Sales were $34,277,519 - winners portion is 37.532% divided by 4 winners.) Do you know how far this money could go in giving the retailers that much needed raise? Or how far it could go in increasing the 5 of 6 or 4 of 6 prizes? Now, by the same token, do you remember the "advertised” $85 million jackpot? Well, total sales were $136,455,086 and the winner was paid $51,214,323 yet it would’ve only required an investment of $48,786,362 to get the $85 million dollar return. As you see, the TLC under-estimated this jackpot - and knowingly so - but the winner was still rightfully paid his full portion - 37.532% of sales. And this is the way it should be because Lotto Texas is a "pari-mutuel" game which means prize amounts are determined by a set percentage of sales then divided equally among the winners. If this rule passes, then in the example regarding the $85 million winner - well, he would have just gotten the $48 million figure and the TLC would've been able to place the “excess funds” into their “reserve fund.” Then they could pull funds as needed to overpay other 6 of 6 winners when they've over-estimated the advertised jackpot and got caught with their britches down. Talk about covering themselves and taking advantage of the players ... While the TLC has never lost money - they have certainly encountered excessive expenses as a direct result of poor management decisions - in my opinion. They worked so hard to add those 4 balls just so there would be fewer winners and bigger jackpots - and now - they’re trying to manipulate the amount a 6 of 6 winner will win by controlling and only paying the “advertised” figure just to keep that $4 million starting figure. This would be like betting $20 to win on a 100 to 1 odds horse yet it goes off at 110 to 1 and the horse wins. But because the track didn’t get the board changed before the race started, the track decides that the next race needs a little boost - more money for the pot - so they don’t pay the winners their full “pari-mutuel” share. What would you say to that? (Oh my gosh, my ears are already burning!) Well, this is exactly what the TLC is proposing. If you think all funds for each drawing should be disbursed to the winners who played the game and won - then you need to speak up. Remember, the TLC has always stressed that the jackpot figure is just an “estimated figure”... so why aren’t they honoring that? A petition or letter- the easy way to Now read on for other proposed rule changes and the exact verbiage for what's described above.
A petition - the easy way to Who to write? Write to: Kimberly is currently refusing to accept e-mails for comments. However, you may email me with your comments and I'll see to it that the TLC receives them - I’ll just be the same thing G-Tech was when they delivered 4700+ surveys to the Commission last year. Please include your name, address, city, state, zip - this way there will be no disputing who you are and your comment can be verified if necessary - unlike the majority of those surveys! To email me, just click here. If you oppose or approve any of the rule changes mentioned, Kimberly wants to know your "specific" reasons. So, tell her what you think. FYI - Below is a portion of the transcript from the April 26th Commissioners meeting regarding the TLC accepting & wanting public comment - as you read the testimony, remember, Kimberly has told me, "no comments by email this time" yet the notice is posted on their web site but they don't encourage people to comment. Also the layout of this proposed rule change that you'll find on their web site is extremely difficult to read and understand. Nor do they provide a link enabling you to comment. I hardly call this "inviting comments." Here's the testimony. "COMMISSIONER CRINER: May I ask a general question? CHAIRMAN CLOWE: Certainly. COMMISSIONER CRINER: Is there -- and this is a question basically of ignorance -- would there be any reason why, or could we, or is it good business -- just all of the above -- to have retailers or participants talk to us about these rule changes? When we advertise it in the Registry, does that give them an opportunity to comment? MS. KIPLIN: Yes, it does. That's the purpose of the public comment period. It is to invite comment. This is a wide-open process. I would love to have comment. For those that want to, we will take a look at the comment and we will see whether we ought to make changes. I will say -- and I appreciate you bringing it up, because I did forget one point -- we actually did receive correspondence from a group that said, "You know, the way that you identify your payment, the cash value option, on Lotto Texas isn't this clear." Because really, what we're paying is the net present cash value. And they suggested -- this group said, "Why don't you use that phrase, 'net present cash value.'" We took a look at it and said, "You know, you're right. That is a good change." That is part of this rule-making package. So that change was predicated based on a comment received by the agency. But this goes into the Texas Register for public comment. It's obviously a part of today's open meeting. This transcript goes up on our Website. And I believe that in the past, we have put these rule-making packages on our Website. But I'll check to make sure that we do that, and we'll make them available for anyone who wants them. COMMISSIONER CRINER: Thank you. CHAIRMAN CLOWE: Very good. End Testimony This is a new proposed rule change The Lotto Report |
|
