Texas Two Step
The New Game That Replaced Texas Million

Brought To You By ...
The Lotto Report
A Bi-Weekly Publication

Originally Posted: Jan. 11, 2001
Revised: May 26, 2008 - New Rule Becomes Effective

TEXAS TWO STEP

How The Top Prize Winner Is Paid

Brief Description of Texas Two Step

First Prize Payout - A Catch 22

What Other States Offer This Type of Game

About the Powerball Game

"The Texas 2 Step Money Page"
(This is another page completely)

Update - May 26, 2008 - New rule become effective. In a nutshell, the change was to do away with placing 1% of the players share sales into reserve. They increased the jackpot prize allocation with that 1%. IF they do not have enough to fund prizes, then they will take money from the TLC's operating account OR from the schools share. Below you can see how the prize allocations were changed.

How The Top Prize Winner Is Paid ...

For Texas 2 Step, the TLC is paying the "advertised jackpot amount” and not the "actual percentage of sales.” This is how they wrote it into the rule and how they intended for it to be. Now let’s see how it effects the top prize winners and do realize, this is how they are proposing to change the rule for Lotto Texas.

First and foremost, keep in mind that the TLC's press releases, monthly brochure, RoundUp and all point of sale literature for Texas 2 Step says that except for the $5 and $7 prizes, (1) "all other prize levels are pari-mutuel and are divided equally among mulitple winners. (2) prizes are pari-mutuel and may be lower or higher than these published prize amounts. (3) Prize pool equals 50% of sales." In a nutshell, this means the top prize winners should divide “equally” their “pari-mutuel” share, which is 22.78% of sales, so there shouldn’t be a carry over for the top prize winner. But whoa - there were winners - yet they still carry forward money.

Now - the official written rule says, "The commission will pay the advertised jackpot amount for Texas Two Step. If the direct and indirect prize category contributions are greater than the advertised jackpot amount, the difference will carry forward to the next drawing for the first prize or jackpot prize category and will be used for future Texas Two Step jackpot prizes. If prize contributions are less than the advertised jackpot amount, the difference will be taken from the Texas Two Step prize reserve fund." OK, so this means the TLC will only pay the "advertised amount" no matter what sales warrant. I wonder then, why do they still use the phrase "estimated jackpot" and why do they advertise this payout as being "pari-mutuel" when in reality it is "set" by the "executive director?"

So which should we believe? The rule or the printed sales literature? Well, here's what they've actually done so far ... they've paid both ways!

To see the "2 Step Money" chart that shows you all the facts you need to paint this picture clearly .... total sales, total prizes paid out, the carryover, the number of winners, and the true percentage of sales paid, just click here.

Brief Description of Texas Two Step

To play, players choose 4 (four) numbers between 1 - 35. Then, players choose 1 (one) number between 1 - 35. The one "lone" number is called the "bonus number." For each drawing, they will use two ball sets and one drawing machine. There are 70 balls total (35 white balls and 35 red balls) and two separate drawings - so to speak. Each Texas 2 Step drawing machine has 2 chambers - one chamber holds the white balls and the other chamber holds the red balls.

To win the jackpot prize, players must match all 4 numbers and the bonus number drawn. This is the same concept as the Powerball but has been termed by lotteries as a "mini powerball." The cost to play is $1. This game is played twice a week - Tuesday's and Friday's.

The TLC is "suppose" to payout 50% of sales, but - scroll down and read "First Prize Payout - A Catch 22" to see how the rule "really" reads. (This section revised on 5-29-01 too - so be sure to scroll down for up to date comments and comparisons)

I have charted for you the ways to win, the PROJECTED prizes, the odds of winning and the percentage taken from 50% of sales that is allotted for each prize category. This is what you need to study to decide if you want to play this game or not.

Percentage
Paid
To
Winners
Changes Effective
May 26, 2008

1% -0-

** Top prize won't be won every drawing. It is a carryover like Lotto Texas **

Overall odds of winning any prize 1 in 32.37

For those of you who want to understand "odds" - I'll use an actual example from above to explain it fully. Lets take the prize, "match 3 numbers and the bonus number" where the odds are 1 in 14,779. Well, that means that for every 14,779 tickets sold, ONE should be a winner. Ugh ... sounds like a pretty bad deal for winning $50.

First Prize Payout - A Catch 22

What seems unusual is the wording in the proposed rule for the top prize. It means they will estimate, advertise and PAY the "advertised amount" -- If sales are higher than projected, they plan to carry forward the extra money. For players, this means if sales are less than expected, the winner benefits - but, if sales are more than expected, the winner losses out. Here is the excerpt from the rule:

(iii) The commission will pay the advertised jackpot amount for Texas Two Step. If the direct and indirect prize category contributions are greater than the advertised jackpot amount, the difference will carry forward to the next drawing for the first prize or jackpot prize category and will be used for future Texas Two Step jackpot prizes. If prize contributions are less than the advertised jackpot amount, the difference will be taken from the Texas Two Step prize reserve fund.

Update - An interesting note - For the first Texas 2 Step drawing, the TLC did pay the actual percentage of sales to the 3 winners and not the "advertised" amount. Sales totaled $1,201,819. According to the playslip, each winner will receive $91,258 making the total payout $273,774 and this equals exactly 22.78% of total sales.

However, for the 3rd Texas 2 Step drawing that was won - sales were $868,695 for the May 22nd drawing and $1,166,343 for the May 25th drawing making total sales $2,035,038. When you take 22.78% of total sales, that equals $463,581 but the playslip says the winner will only receive $350,000 which was the "advertised" amount.

Figure that one out. Oh well, so much for abiding by the law as it is written!

Also, sales for Texas 2 Step are NOT what the TLC had hoped for. The first Texas 2 Step drawing brought in $1,201,819 and the second drawing only brought in $868,695. For comparisons - the first Texas Million drawing brought in $6,142,592 - the first Cash 5 drawing brought in $2,244,880 - and the first Lotto Texas drawing brought in $5,085,959. Keep in mind that Texas Million was $2 per play while Lotto Texas & Cash 5 was only $1 per play too. I think given this data the TLC is currently running around like chickens with their heads cut off trying to figure out what went wrong. Someone needs to tell them that "greed" is the root of all gambling losses.

If you want to read the entire proposed rule, just click here.

What Other States Offer This Type of Game

I called the TLC and asked what other states offered this type of game but they told me that I would have to make an open records request to obtain the information. I've learned when the TLC refuses to verbally answer one of my questions, that generally means they want to prolong the answer being made public.

So, without their help, I identified only 3 other states that do offer or will offer this type of game. I've contacted a number of states but so far this is all I can find. If anyone out there knows of any other state playing a "mini powerball" please let me know. I've been told that this is a new concept much like Texas Million was when Texas started it. The status of who else offers this new mini powerball game is ....

Florida - They started a game called Mega on June 1, 1999. Players select 4 numbers from 1 -32 then players select 1 number from 1- 32. This is a total of 64 balls. They pay 6 prizes. The cost to play is $1.

Kentucky - They are replacing their Cash 5 game with this "mini powerball" type game in March 2001 and the game will be called "Kentucky Cash Ball." They will offer 8 ways to win and they think there will be 64 balls total. The cost to play is $1.

California - They replaced their big Lotto with a mini powerball type game on June 7, 2000. Players match 5 numbers from 1 - 47 then they match 1 number between 1 - 27. The cost of play is $1 and there are 9 ways to win. As you see, they have 74 balls. California does not post on their web site the jackpot amounts - at least not that I could find, so I can't say how many winners they've had.

About the Powerball Game

FYI - Many players don't understand that the Powerball game belongs to a group of smaller states. These states came up with this game because it was their way to acquire larger jackpots which they could not do on their own simply because they didn't have the population to do so. These states were losing their players and their money to the larger states who had the larger jackpots and this is why they came up with the Powerball. These states would not allow the bigger states, such as Texas, California, Florida and New York, to be a part of their game. The Powerball, when and only when the jackpots are outrageous, is considered successful and the larger states are losing monies to them during that time. This might help give a little insight on why Texas can NOT join or be a part of the Powerball and why states are taking the same play concept and using it for themselves.

Many thanks to Professor Gerald Busald from
San Antonio College for his
mathematical input. Without his help,
I couldn't have given you all this information.