Texas Lottery - Cash Five

The "Trends Report" Paints
Rosy Picture For Cash 5 Sales
After 1st Week

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Originally Posted: 8-7-02


But ... Was It Really Rosy?

On Wednesday, August 7, 2002, the TLC released the latest edition of the "Trends Report." The Trends Report, which is produced weekly by G-Tech but verified by the TLC before it's released, states ...."Cash 5 sales were $2.9 million, up 50.94% from the previous week's total of $1.95 million."

Very interesting. Sure sounds official too. But is the statement realistic? NO! "Weekly sales figures" INCLUDE "multi draw" tickets but there were NO multi draw tickets sold in the last week of 5/39. Therefore, this is not a true representation of the "sales increase" for the first week of sales under the new 5/37 rule.

For those of you who do not know, "multi draw" tickets are those tickets that are purchased in one week for draws that will occur during the next week.

The statement, "Cash 5 sales were $2.9 million," included sales for future draws - the true draw sales figures for the first week under 5/37 were $2,831,117.

The problem is that "previous week's total of $1.95 million" did not include any multi draw sales ... one could not purchase multi draw tickets during the last week of 5/39. Not to mention the little fact that draw sales were actually $2,078,799 for the last week of 5/39.

While it may be an acceptable practice to figure percentages in increases and decreases each week using "total sales in a given time period," in the case of a game that is closing, such as this case, I feel it is not a true representation of current events by any standards. To use and/or quote one sales figure that includes "future draw revenues" and compare it to another figure that does not include "future draw revenues" is not a true picture. At least not in my books it's not.

The actual figures that should have been used are:

Draw sales for the first week under the new rule (5/37) were $2,831,117.

Draw sales the last week under the old rule (5/39) were $2,078,799.

The "draw sales" increase was $752,318 - which represents a 36% increase in sales - not 50.94% as reported by the TLC.

Now, if we were to round off the figures like they do, then we would be correct in saying the first week of 5/37 draw sales were $2.8 million and the last week of draw sales under 5/39 were $2.1 million ... in which the sales increase would have been 33%. Again,
not 50.94% as quoted in the report.

We all know only too well that numbers can be "juggled" to look however one wants them to look. Since I know how the TLC staff uses these figures, I wanted you to know what the percentages "really" were for the first week under 5/37.

The TLC "juggled" Lotto Texas' 6/54 vs 6/50 first year sales and percentages too. In this case, they failed to compare apples to apples. They should have computed sales for a total of 105 drawings for the exact one year to date comparison. But the TLC cut off the last 3 draws in the first year of 6/54 (Sales were down really bad ... Imagine that!) In turn, they also counted back to the last 102 draws of 6/50 but they started from the date 6/54 began.

Did this effect the numbers? Absolutely. You see, 6/54 started out with a $21 million advertised jackpot which meant the last 3 draws under 6/50 produced higher sales. If these figures had been included in the great success story the TLC presented to the press, it would have made 6/54 look not so successful. So, the Texas Lottery just conveniently cut the year short thinking no one would know.

Surely ya'll remember when all the newspapers reported how successful 6/54 was - sales had increased by 31% they said! Well, that wasn't "really" true because they were NOT computing all the draws. I have all the facts and figures posted, if you want to read exactly what and how they did it, just click here. Its a pdf file.

To see how Cash 5 "really" fared during its first week debut, may I suggest you read the story I wrote Sunday, Aug. 4th. Click here to read it.

The following editorial was included in the above mentioned story, "How the Cash 5 Fared After One Week." As you will see, I was on target by saying that the TLC would paint a "rosy picture."

An except from "How Cash 5 Fared After One Week"
"From the Texas Lottery's Perspective
Right now as I write this, (Sunday, Aug. 4, 2002) they [TLC] are viewing the Cash 5 rule change as a successful move. After all, they have $752,318 in additional sales plus Lord only knows how much the "unclaimed prize fund" will increase at the end of 180 days due to the number of folks who do not know to collect their $2. The Texas Lottery will paint a rosy picture about how great the "enhancements" are, but at a later date, you will see them back with another game plan and an "excuse" as to why sales are down again. Just like they are doing right now for Lotto Texas and Pick3.

A very important question to ponder - did the $752,318 cover the cost of enhancing the game? You may not remember this, but in 1992, the Texas Lottery recovered all "start up costs" on the first day of sales. Did this "enhancement" do that? I'll bet not.

From G-Tech's Perspective -
Well, G-Tech should be happy campers. They
did get a raise. The way I see it, their start up cost involved some re-programming of the lottery terminals and the distribution of playslips and other printed literature. For them though, that's not a big deal because they have to be in the stores twice a month anyway. But I think that while G-Tech made a little extra money in the first week, it was not near the amount they had hoped for."

In Conclusion
I can't help but wonder ... did WorldCom & Enron use similar tactics in reporting financial standings to their investors? Am I the only one who finds the calculation methods a misrepresentation of the true facts? Would President Bush place these tactics under the heading of "fuzzy math" too?

Attention TLC - I, as a tax paying citizen of Texas, want to know the "real" numbers - not the glorified, misleading numbers. And ... I will not back off until such time that I am convinced that you are telling the "whole" truth - not just a partial, flattering truth that makes your ideas look good when in reality, they stink. The Cash 5 "enhancements," as you call them, were created to do nothing more than entice the people to give their "winnings" back to the TLC and to increase the Unclaimed Prize fund of which, you keep a portion of and use however you see fit.

To read the Trends Report, click here
This file is updated weekly. The statement mentioned
above is on page 2 of the "Week Ending August 3, 2002" Report

Just For Your Information ...
Actual Cash 5 "Per Draw" Sales

Last Week of 5/39 vs First Week of 5/37

Draw Date Total Sales Per Draw





- Keep in Mind -
If I go into a store today and purchase a $1 ticket that
is good for the next 10 draws (called a multi-
draw purchase) ... the money ($10) I paid today is
counted in this weeks "weekly sales" figures. However,
the TLC places $1 each day into the games "total
draw sales" allowing each draw to have its
own "draw sales" figure of which they use
to determine the prize amounts.

The sales figures shown above are for each draw.
of the figures include advance ticket
purchases - in fact, between July 22 and July 26,
no multi-draw sales were accepted.
The game was closing effective 7-26-02.

Also, keep in mind that there are two additional
draws per week and a measly $2 prize which is
not a sum that players would put into their pockets.
Rather, it is a sum that they players would say,
"Could I just get a $2 Quick Pick for tonights draw."
Taking these factors into consideration, Cash 5 sales
should increase for now.


A Special Story
How Cash 5 (5/37) Fared At The End of One Week, Click here.

Money Pages
Cash 5 Money Page, Click here
Lotto Texas Money Page, Click here
Pick3 Money Page, Click here
Texas 2 Step Money Page, Click here

Links Regarding the 2002 Cash 5 Changes
To read the March 6, 2002 Commissioners Meeting where
they voted to propose a new Cash 5 rule, click here.
(Here you'll see the reasons the staff wanted these changes
and what they did NOT tell the Commissioners.)

To read the proposed rule itself ... click here.
(Here you can see how the percentages changed for each prize
category and how they devised a way to pay the $2 guaranteed
prizes. Actually, this is how they should do all "guaranteed"
prizes. Especially for Lotto Texas & Texas 2 Step. This way,
they could do away with the "reserve fund" which would
then make the payouts fair. But I'm sure they don't want
to do this, then they would NOT get the excess funds!)

To read my letter of opposition (pdf) ... click here.

The Lotto Report
P. O. Box 495033
Garland, Texas 75049-5033
(972) 686-0660
(972) 681-1048 (Fax)