Texas Lottery

In Answer to Your Questions & Comments Regarding the
Resignation of Ms. Linda Cloud

Brought to you by
The Lotto Report

Originally Posted: Sunday, Sept 29, 2002
Revised: Sept. 30, 2002

10-10-02: Houston Chronicle reports Ms. Cloud sues
Governor Perry's campaign staff. Click here

As many of you have read and heard, Mrs. Linda Cloud, the Executive Director of the Texas Lottery resigned her position at 5:30 on Sept. 26, 2002. While I have been expecting this for quite some time, I was taken back and saddened by the realization that an era had come to an end.

I've received literally hundreds of emails and phone calls yet I have not been able to respond because quite frankly, I've been thinking about what I should say and I've been letting all this sink in. And honestly, I've thought about the role I played in her resignation.

I suppose what it all boils down to for me is that I regret that Ms. Cloud would not listen to anyone because this could have all been avoided. Because she is stubborn, as am I, each time I did something that went against her line of thinking, she would rebel and the only way she could rebel against me was to withhold information or deny having the information when she really did.

The more she withheld and denied, the more I would expose. I firmly believe in Open Government and I firmly believe in consumer disclosure, fairness to all and integrity.

In the end, she was literally backed into a corner - she did lie - many times - and that was very wrong.

Her ideas failed. However, in defense of the ideas, I will say that all she did was copy other states even though the other states had already proven that the ideas implemented were not successful. This is bad business.

She did not treat all winners the same as some got more money than what they were entitled to while other didn't get what they rightfully won. And then some got exactly what they won. There should not be double standards in figuring and paying prizes.

She failed to protect the players - this is why the unclaimed prize fund is so high. The terminals make mistakes in reading winning tickets and she knew it.

The teaching hospitals have not received 100% of the unclaimed prize money as we've been led to believe. Like some 6 of 6 winners, they've been short-changed too. However, I believe the unclaimed prize money belongs to the players - not the state.

The unclaimed prize figures wouldn't be so high if the terminals didn't err - this is not the players fault. Players are at fault when they don't check their own tickets but when players take their tickets to retailers to have them checked via the terminals, the terminals should be trustworthy. Since they are "machines," they can malfunction.

Given these circumstances, retailers should not check players tickets for them. The terminals should only be used to confirm that the ticket is a winner so the player can collect his winnings.

But then, drawing results aren't easy to obtain either. Ms. Cloud knew this yet she did nothing to improve the situation. In fact, she went overboard in preventing various sources from giving out the drawing results. She ignored warnings from the TV stations regarding the time they had to edit the film so they could air the results which resulted in less TV coverage.

Lotteries have caused their own miseries and they need to back up and re-evaluate the circumstances. I think the biggest problem is that the folks who run the lotteries don't spend their hard earned dollars playing the games that they create. If they did, we'd have successful lotteries.

I honestly believe that greed and egos are the true culprits here.

I "think" I've read all your comments. I've spent the last two days reading my mail. There was one email in particular that really seemed to cover everything in one message so I'm going to use that one to answer all your questions. This message came to me from Elaine T. from Ft. Worth and my comments are in blue italics.


Sept. 28, 2002

Good morning Dawn,

Have been following the news and reading the articles in the Star-Telegram with a big smile on my face. Am anxious to hear your reports of what you observed while you were in Austin.

Also, what is your opinion of Gary Grief? Will he be more sympathetic to the players and supporters of the Lottery, or just another grabber of money for the State, without regards to ethics?

First of all, Gary is the "Acting Executive Director." If he wants the job permanently, he will have to submit an application. I've seen Gary at the meetings and he's always been very nice to me though I've never had any dealings with him. So I can't really answer this question with certainty.

I do know he is intelligent and experienced. I choose to believe that Gary will step back and evaluate everything before making any significant changes. I believe, because he is intelligent, he will recognize the mistakes and learn from them. I also choose to believe that he will seek answers from various qualified sources before making any decisions.

I'm wondering if you think we should immediately begin to let him know our opinions about what's happened to the games recently, and how strongly we feel AGAINST joining the power ball lottery. Sounds like a dumb question, but I want the timing to be right when all our letters begin to hit his desk!

No, I do not think now is the time to bombard Gary. The poor guy has just thrust himself into a big mess. He will have to make determinations as to the root of the problems and determine what roll other staff members played in these matters. Did Linda Cloud act alone and was her staff just following orders or were they a willing participant in all these issues?

Regarding joining Powerball. The Texas Lottery cannot join Powerball unless it is approved by our legislators. Since all this talk began several months ago, I have received over 1000 comments of objection. These messages came in without my even asking for them!

I was at the hearing last Tuesday and I did tell them that players were adamantly opposed. What we need to do to insure that Texas does NOT join Powerball, is to make our messages heard by our legislators so they will not approve the plan. I believe we have 3 more hearings and we will need to communicate our feelings to our state legislators. That will insure Texas will not join Powerball.

For those of you who do not know this, Powerball is experiencing a sales decline too. In an attempt to get their sales up, they passed a new rule that takes effect Oct 6, 2002 where they will pay the amount they "advertise" and not the true percentage of sales. This is NOT fair to players. These games are suppose to be and are advertised as being "pari-mutuel," meaning everybody gets a percentage of the take.

Other states have done this on their games but their players don't know or understand what this really means. Texas tried to write this in our rule but we stopped them. Thank goodness.

Other Powerball changes include increasing the number of balls from 1-49 to 1-53, they are increasing the annual pay from 25 years to 30 years and they are limiting the amount that they will increase the "next jackpot" to a maximum of $25 million no matter how much sales are once the "record level" is hit. The "record level" is $295 million. The odds are jumping from 1 in 80.1 million to 1 in 120.5 million.

These things are VERY bad for the people. It's not even close to being fair.

Powerball starts their pots out at $10 million. BUT, they don't have enough in sales to pay that should someone win - but don't worry, people can't win so basically they are safe. Anyway, 24 states make up the Powerball and out of 24 states, they can't generate enough sales to increase the jackpots by more than $2 million each draw in the beginning.

Now, if these reasons are not good enough to stop Texas from joining in with the bigger rip off games, then here's one more reason to not allow Texas to join the other games.

If Texas joins Powerball, it will compete directly with Lotto Texas and take revenues away from our games. Then our pots will really shrink!

Somebody needs to make the states understand that it's the same people day in and day out that play these games. Lotteries could be a good thing for a state, but at the rate they are going, I predict there won't be a lottery in years to come.

State lotteries are the core reasons that poverty has risen in recent years. And if the lotteries wouldn't dangle huge sums of money in these peoples faces, they wouldn't spend their last dollar buying lottery tickets in hopes of hitting it big.

I posted a newspaper story about the powerball changes some months back. If you want to read it, it's the 3rd story - click here and scroll down.

Will continue checking in to the Lotto Report several times daily for your updates. Thank you for all you do, Dawn. I'm hoping this change will be a great opportunity for those of us whose monies keep this lottery going, to have our voices heard, at last.

I hope so too.

P.S. Cloud dashed off in such a hurry---do you think she might have been smelling "Investigation" on the horizon? :-)

In my opinion, Ms. Cloud made bad business decisions. I don't think she broke any "big time" laws (except the underpayment to 6 of 6 winners, consumer advertising laws and open records laws) - she just ran off her players, angered the retailers (her sales staff) and lied to the press which ultimately cost her her job.

Let's all hope Texas becomes the leader of the Lottery industry by NOT copying other states. Let's get back to basics. That's the cure.

Keep up the excellent work,

Elaine in fort worth

Related Stories

The news accounts as they appeared in the Ft. Worth Star Telegram. Click here.

On 10-10-02, the Houston Chronicle reports Ms. Cloud sues
Governor Perry's campaign staff.
Click here

My first report, on March 18, 2002, regarding Criners resignation. Click here.

Click here to see other comments posted last March 2002 -
(It's in blue italics under Commissioner Clowe's opening statement.)

 

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