Comments in blue italics by Dawn Nettles, The Lotto Report

Attention Texas Players
The first story below, "Glitch Trips Up Lottery's Derby" shows WHY
computerized draws needs to be outlawed. The Texas Lottery currently
denies plans to give Texans computerized draws but this is CLEARLY not
true as documents obtained show they have every intention of giving us
"computerized" draws. It is my opinion that they are using "sneaky"
tactics to make this change.

Here's why I say "sneaky tactics." They have been giving the
Commissioners all kinds of information regarding showing
"animated" draws - rather than showing the actual balls
and machines - claiming this might help them get their
TV coverage back.

They claim "animation" would be more appealing and
would require less air time. But I think they want to make this
change so when they actually do switch over to computerized
draws, the People won't know it because everyone will be
accustomed to seeing the "animated draws."

I told them this week that we want to see REAL draws -
we literally want to see the balls drop into the machine and
we want to see the real numbers on the REAL balls. We want no
part of animated draws no matter how pretty they can make it and
we want no part of computerized draws. FYI - They had "experts"
explain "fairness" of computerized draws at the commission meeting.

Two reasons - 1) There is NO way that a computer can draw
"random" numbers (staff knows this so the TLC is currently telling the
Commissioners that they can offer "fair" draws) and 2) I feel that they
will lower the odds on the games when the switch to computerized
draws becomes effective because they will be able to control the
outcome of the numbers drawn to ensure there will be NO winner.
As we all know - it would take less than a split second to scan for a
combination that was NOT sold then the computer could draw
one of those MANY combinations.

If you agree with me, I suggest that you send an email to BOTH your
Senator & State Representative. Simply tell him/her that you strongly
oppose any plan the Texas Lottery may have to give us computerized
draws and you oppose any plan the TLC may have in showing animated
draws rather than actual draws. Tell them that the TLC is planning
to make this change and to please STOP them. Be nice in your request
for help and do give them your address, city, state, and zip.

You can find your legislators by clicking here. PLEASE do it
NOW as this is the RIGHT time due to the legislation process.
Our lawmakers can write this into law NOW.

While you're at it, you might want to ask them to guarantee that
the People receive 50% of sales and the only way to "guarantee"
a 50% return is to have all prizes "pari-mutuel" prizes. Currently
we do NOT receive our share of sales when we play Lotto Texas,
Mega Millions, Texas 2 Step and Pick3.

As for what the TLC has given us in way of odds, I'd suggest
that you ask your legislator to give us fair games of chance
and you feel we don't have that now. We want changes!

If you would like to see what I suggested to them, click here.

Ya'll need to help me spread the word about this. The
more messages sent, the better off we will be.

(Computer) Glitch Trips Up Lottery's Derby
Officials discover a programming error after
a player questions lack of repeat numbers.

By Nancy Vogel
Los Angeles Times
May 13, 2005

SACRAMENTO — Dave Andres, an insurance underwriter from Altadena, thought he alone was in the habit of scanning hundreds of winning numbers in the lottery's least-popular game, Daily Derby.

He assumed no one else noticed that for 100 days running this winter, none of the winning times in the horse race-themed game had numbers that were repeated.

He knew that players had to not only pick the right horses but also the last three digits of the winner's finishing time. And he saw that those numbers were always like 3.70 and 4.23, and never 1.33 or 4.24 — even though the statistical probability is that duplicate numbers should appear 27% of the time.

But Andres was not alone. An equally sharp-eyed Walnut man who noticed the same aberration described it in a letter to lottery officials last month. That led to the discovery of a computer software glitch that had denied 650 players a chance to win the game's grand prize over six months.

"To whom it may concern. Something's been nagging me about the outcome of the last 150 or so Daily Derby race time draw results," began the handwritten April 18 letter from a man lottery officials refused to identify and can reach only by mail.

California lottery officials quickly investigated, eager to plug any breach in the integrity of a state-sanctioned enterprise that last year saw a record $2.9 billion in sales. The problem was fixed last week.

"This was taken seriously immediately," said California Lottery Director Chon Gutierrez. "It went from the marketing people to our security people, and they came up to us late on [April 29] and they said, 'We've looked at it and think there's a lot of merit to it.' "

As a mea culpa to players, officials plan to take about $250,000 from their advertising budget and boost prizes in the Daily Derby game over the next couple of weeks.

Gutierrez said the lottery from May 18 to June 1 would triple the race time prizes and augment the grand prize to roughly $300,000. Officials also plan to send the Walnut letter writer a thank-you gift.

"This guy identified a real problem for us," Gutierrez said.

There are two ways to win the $2 Daily Derby. Players can pick the top three horses in each race or pick the correct time it takes for a horse to win. Getting it all right nets a player the grand prize, which averaged $300,000 over the six months of the computer glitch and now stands at roughly $100,000.

California lottery officials traced the problem to November, when a contractor was replacing the 7-year-old computer hardware and software that draws the winning numbers each day.

The programmer inadvertently copied a line of software code that kept horses from appearing in more than one winning spot per race. The code guarantees that horse No. 8, for example, doesn't win both first and second place.

But when the code was mistakenly applied to the race time, it blocked the computer from picking any number that repeated.

"Now what I'd really like from you guys is a probability figure on this bizarre streak we've been getting for the last 159 Daily Derby race time draws," wrote the Walnut man.

Andres, who didn't alert lottery officials to his discovery, said, "I just didn't think anybody else would be out there wasting their time with stuff like that."

News of the glitch, Gutierrez said, has hurt lottery worker morale, especially in the unit that oversees the drawing of numbers.

"They're just morose," he said. "They don't know what to say."

The problem took just a few minutes to fix. Rebuilding the trust of Daily Derby fans may take more time. Though it generates only $200,000 of the lottery's $62 million in sales each week, lottery officials say its players are unusually loyal.

From November through April when the software problem existed, 650 of the 2,349 people who won the trifecta by picking the top three horses in the correct order had no chance of winning the grand prize because they picked a race time with a number that repeated.

California lottery officials said they did not know how many people had no chance to win the average prize of $50 for picking the race time alone. Because it is a parimutuel game, all prizes are based on how many people play.

Officials are trying to determine the names of the players affected — they already know the time and place each player bought a ticket — and are also reviewing other lottery games for software problems.

The Daily Derby trouble comes as the California lottery is preparing to join an interstate jackpot game called Mega Millions, a move aimed at boosting jackpots and the roughly $1 billion each year that the lottery generates for California public schools.

"The honesty and the integrity of the lottery is paramount to us," Gutierrez said. "Without it there can be no successful lottery. Whenever issues surface involving questions of integrity, they are dealt with instantly, aggressively and thoroughly. That was done in this case."

Gutierrez said he hoped the situation did not lead to lawsuits.

"We are dealing with this programming error in a forthright and direct fashion," Gutierrez said. "If litigation arises, we will deal with it appropriately. We believe we are treating our players fairly."

This isn't the first time the lottery has tried to make amends with players. In 2002, embarrassed by revelations that 11 of its 137 popular Scratchers games had continued after all grand prizes had been awarded, the lottery took $2 million from its administrative budget to give away $1 million in prizes. The prizes were awarded randomly through a one-time contest that allowed anyone to enter by mailing their name, address and phone number to the lottery.

Lottery officials said they did not know about the Scratchers problem until players filed a lawsuit.

Andres, who plays the Daily Derby occasionally but prefers the Daily 3, said there was not much else the lottery could do.

"It was clearly just a mistake," he said. "It seems like they're doing something to make amends."

Like lottery officials, Andres said the computer glitch hurt some players but helped others. It improved the odds of winning for those players who picked race times with numbers that didn't repeat. Their odds of picking the race time correctly dropped from 1 in 1,000 to 1 in 720. Andres was one such player.

"When I became convinced it was busted," he said, "I didn't use the duplicative approach."

Still, he didn't win. After 10 years of playing, his biggest lottery win was $666 last year on Daily 3.

"I'm not so good with numbers," Andres said, "it's just that after a while you look for patterns."

Give me back my money!
Model sues mayor, bank & gamblin' stepdad over her lost $7M

BY HELEN PETERSON
HAMPTON ROADS DAILY NEWS
May 12, 2005

Supermodel Maggie Rizer is supermad.

The blond beauty is suing her stepfather and others she claims turned a blind eye while he drunkenly gambled away her $7 million fortune - a lot of it playing Quick Draw, the state video lottery game.

Rizer is taking aim at some of the most high-profile citizens of her hometown, Watertown, N.Y. - including the former mayor, a tavern owner whose Quick Draw machine swallowed much of her money, a suit filed in Manhattan Supreme Court charges.

"I think it's ridiculous that grown men in upstate New York tried to hide behind my stepfather and make a fool of me," Rizer told the Daily News yesterday. "I am not going to stand by and let anyone do that to me and my family."

Rizer, 27, was a small town kid just out of high school when her career took off after her mother, Maureen, sent some Polaroids to a modeling agency.

Before long, the 5-foot-10 stunner was established as an international supermodel and commanding $30,000 a day. With no experience in finance, Rizer turned to stepdad, John Breen, an insurance agent, giving him power of attorney over her mounting fortune.

Between 1999 and 2002, Breen went on a bender, boozing and pouring countless dollars into Quick Draw electronic gambling machines in two local taverns - including one owned by former Mayor Jeffrey Graham, the lawsuit charges.

"The behavior of these people was horrific," said Rizer's lawyer, Edward Hayes. "It's really, really awful conduct."

Breen admitted stealing about $7 million when he pleaded guilty to grand larceny in March. He was sentenced to four years in prison.

Hayes said the suit seeks the return of $3 million Breen stole, though that figure may go higher depending on what can be established in court.

The suit accuses Graham, a longtime Breen friend, of plying him with free drinks, and accepting checks written on Rizer's account to cover Breen's losses, and allowing him to run a tab, in violation of state lottery rules.

Bar owners make a 6% commission on Quick Draw plays. Graham's Quick Draw revenues rose from $732,464 in 1998 to $1,640,065 in 2001, according to court papers.

"It would be kind of stupid to comment on something I know nothing about," Graham told The News yesterday.

The suit also accuses local bankers of doing nothing while Breen was draining Rizer's account, even though he often was reportedly drunk while making withdrawals.

Only in late 2002 did bank officials question him about unusual activity on the account, the court papers say.

Lottery ticket dispute goes to court

The Indianapolis Star
Associated Press
May 12, 2005

An administrative law judge is considering the claim by two Shelby County men that they are the rightful owners of a $100,000 lottery ticket that was tossed in the trash.

Judge Gregg Henry said he would rule within two months after hearing 6 1/2 hours of testimony Wednesday. Ownership of the ticket has been in dispute as it was put into a trash can at the Chaperral Cafe in Shelbyville on Feb. 8 after a clerk told Ron Douglas and Ron Vinson that the $5 ticket was not the $40 winner they were hoping it was.

Customer Karrie Jeremiah said she then retrieved the ticket, planning to enter it into a second-chance drawing before later finding out it was a big winner.

Hoosier Lottery officials on Feb. 10 issued Jeremiah a check for $71,600 — the amount after taxes were withheld.

Henry must decide if the lottery must also pay Vinson and Douglas. Chaperral Cafe clerk Marsha Chaney testified that she ripped and discarded the tickets after telling the men that the terminal read “invalid prize amount” and all three of them assumed the game tickets were non-winners.

Lottery officials questioned whether the two men ever saw the winning ticket.

“The testimonies of the two men and the clerk are contradictive,” said Esther Schneider, the lottery’s executive director. “The Hoosier Lottery has received no other complaints to date concerning the validation of winning tickets for the Hold ’Em Poker scratch off game.”

Attorneys for Douglas and Vinson argued that the lottery was negligent in training and supervising its retailers and that the game was confusing.

“Hoosier Lottery’s high-handed tactics are offensive,” Lee McNeely, an attorney for the men, said after the hearing. “They should pay the men their money and apologize.”

Local lottery winner arrested
Man who won $37.5 million taken into custody on federal drug and gun charges

By Travis Morse
The Freeport Journal-Standard
May 13, 2005

FREEPORT - A local man who won the $37.5 million Illinois Lottery jackpot last month was arrested Thursday on federal gun trafficking and drug dealing charges, according to a U.S. Department of Justice news release.

Agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives took defendant Eric Wagner, 32, of Freeport into custody. The charges resulted from a federal indictment returned Wednesday by a federal grand jury in Rockford. The indictment accuses Wagner of eight counts of selling a firearm to a felon and eight counts of illegally distributing marijuana, the release states.

Wagner reportedly purchased the winning Lotto ticket in April at Horizon Supermarkets Inc. in Freeport. Officials say there is no connection between Wagner winning the lottery and the federal investigation that led to his arrest.

Assistant U.S. Attorney Joseph Pedersen, who is prosecuting the case, said the alleged offenses were committed between Nov. 23, 2004, and April 22, 2005. The amount of marijuana allegedly distributed differed in amount on each occasion, but the largest amount was 56 grams, and the smallest was 10.3 grams, Pedersen said.

Wagner appeared before U.S. Magistrate Michael Mahoney on Thursday for his initial court appearance. The magistrate approved a pretrial release so Wagner will not be in custody prior to his trial, Pedersen said. His next court date is 11 a.m. July 7 in Rockford federal court.

Wagner was released at about 3:30 p.m. Thursday on a personal recognizance bond, said James Hauser, Wagner's attorney. James Zuba is representing Wagner in regards to the criminal charges, Hauser said.

If convicted, Wagner faces a maximum potential penalty of up to 10 years in prison without parole on each of the firearms charges and a maximum penalty of up to five years in prison without parole on each of the drug distribution charges, the release states. The actual sentence would be determined by a U.S. District Court judge, in accordance with U.S. sentencing guidelines.

In addition to the ATF, several law enforcement agencies were involved in this investigation, including the Freeport Police Department and the State Line Area Narcotics Team.

Courtney Hill, an Illinois Lottery spokesperson, said it cannot yet be confirmed that Wagner is the winner of the Lotto prize because he has not yet officially claimed his winning ticket. Wagner has one year to redeem his prize.

Hill said the Lottery organization has been contacted by Hauser, who is representing the partnership that claims ownership of the winning ticket. The serial numbers of the winning ticket have been confirmed via telephone, but the partnership has not yet come forward to show Lottery officials the actual winning ticket, which is a necessary part of the process, officials say.

"We have not formally made the claim," Hauser said.

The Lottery cannot prevent a contestant from claiming his prize if he is convicted of a crime, Hill said. Even so, there have been cases in which prisons have received some of a contestant's winnings to compensate for the cost of incarcerating that individual, Hill said.

"There's nothing we can do to prevent the winner from claiming his prize," Hill said.