1 1 2 ****************************************************** 3 BEFORE THE 4 5 TEXAS LOTTERY COMMISSION 6 7 AUSTIN, TEXAS 8 9 APRIL 19, 2000 10 ****************************************************** 11 12 BE IT REMEMBERED that the above-entitled matter 13 came on for hearing on the 19th day of April, 2000, 14 beginning at 10:09 a.m. and ending at 11:25 a.m., at 15 the TEXAS LOTTERY COMMISSION, 611 East Sixth Street, 16 Austin, Texas, and the following proceedings were 17 stenographically reported by MARY SCOPAS, RPR, CSR for 18 the State of Texas. 19 20 APPEARANCES 21 22 MS. KIMBERLY L. KIPLIN, GENERAL COUNSEL 23 MS. TONI SMITH, MARKETING DIRECTOR 24 25 WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 2 1 MS. KIPLIN: Good morning, welcome to 2 the Lottery Commission. I'd like to call the hearing 3 to order. This is a public hearing to receive public 4 comment regarding proposed amendments to 16 Texas 5 Administrative Code, Section 401.305 concerning Lotto 6 Texas on-line game rules. The hearing today is being 7 conducted pursuant to the Texas Administrative 8 Procedures Act, Texas Government Code Chapter 2001. 9 My name is Kimberly Kiplin. I'm the general counsel 10 for the Texas Lottery Commission. And with me today 11 is Toni Smith, who is the marketing director for the 12 Texas Lottery Commission. 13 If I could, let me outline the 14 procedure that we're going to follow today and 15 establish a few ground rules. The procedure is -- for 16 the rule making is conducted under the Administrative 17 Procedures Act. The first part of the procedure is 18 for an agency to propose public comment for no less 19 than a 30-day period. The proposed amendments were 20 published in the Texas Register on March 31st, year 21 2000. We are in the public comment period. Once the 22 public comment period has lapsed, at least 30 days, 23 the proposed amendments will be ripe for The 24 Commission's consideration for adoption or other 25 action. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 3 1 The hearing today is to receive public 2 comment. It is not to ask questions of the staff or 3 to engage in a dialogue with the staff. It's to give 4 people who wish to offer comment an opportunity to do 5 that in a comment hearing. Staff may ask questions to 6 understand the comment or to clarify the comment to 7 make sure that we're getting a good record. Those of 8 you that wish to make oral comment, there are witness 9 affirmation forms in the back of the room. I will 10 need for you for complete those and I will need for 11 you to provide those to me. I will call the name of 12 the commentor in the order that I received the witness 13 affirmation form. When you come -- when I call your 14 name and you come to the table, please identify 15 yourself for the record. And if you are representing 16 somebody other than yourself, please identify who you 17 are representing for the record. 18 As you can see, we have a court 19 reporter who is recording the hearing. The court 20 reporter can only take one voice at a time. So if you 21 will bear that in mind when you come forward, that I 22 won't interrupt you in terms of asking questions and 23 vice versa so we can get a good record. 24 If you do not want to make oral 25 comment, but you do want to show your support for or WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 4 1 your opposition to the comments, that's fine. You can 2 do that by simply completing the witness affirmation 3 form and indicating on the form your appropriate 4 selection or your appropriate position. 5 If you have prepared written comment, 6 please do not read it into the record. If you will 7 provide to me your written comment, it will be part of 8 the rule-making record and it will be considered. 9 I've got a few witness affirmation 10 forms. If anybody has anymore that are completed, 11 I'll be happy to receive them at this time if you'll 12 come forward and give them to me. 13 Toni Smith, the marketing director, has 14 a brief presentation of the proposed amendments to 15 give you an understanding of what the amendments are 16 and the purpose for the proposed amendments. And I'm 17 going to go ahead and turn it over to her so that she 18 can give you that information. And then we will begin 19 by calling your name to come and provide comment. 20 MS. SMITH: This is a portion of the 21 presentation that was presented to The Commission when 22 the rule was proposed. 23 To look at our current Lotto, when the 24 game was originally designed, statistically this is 25 what the six of 50 ball matrix should be doing for us. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 5 1 If you match six, we should be paying out $11 million; 2 five, 1500; four out of six, 100; and three, three 3 dollars. In actuality, here is where we are today. 4 And this is over -- an average prize over 52 weeks. 5 You can see that we're only paying out nine million. 6 We're pretty consistent with the five of six. We're 7 $101 with a match four of six. And we stayed at the 8 three dollar, which has always been a good prize. 9 What the lottery had to take into 10 consideration is where our sales are going. And this 11 chart shows -- the blue bar is average sales. The 12 yellow bars are the average jackpot. And you can see 13 that our sales from 1997 have continued to decline, 14 and have -- so have the jackpot amounts at the same 15 time. 16 So the recommendation that was put 17 before our commission was to make a change to this 18 game. And what we have found in some of our recent 19 Texas player focus groups, and these are actual lotto 20 players, is that the spending at the jackpot is 21 jackpot driven. People want bigger jackpots. You 22 know, we have found through our research and through 23 our actual sales that the players are no longer 24 playing at the four, seven, and ten levels. They want 25 to wait until it's 30 million or 40 million dollars. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 6 1 Most of them, when we asked, said they did not really 2 focus on the odds. They just wanted to win the big 3 jackpot. They did express a concern that the three 4 dollar prize level was not a significant prize to 5 give. They'd like to see that prize level for a 6 match. Three was not high enough. And they were 7 discouraged that the jackpots were not as high as they 8 used to have been in the past. 9 So the recommendation was to change the 10 matrix from six of 50 balls to a six of 54. Increase 11 the prize payout, which that means that the dollar is 12 going back to you, the players, in prizes from 50 13 percent to 55 percent. We would stay with the 25-year 14 annuity, which is what it is currently. You'd still 15 get one play for one dollar. And it would remain at 16 the two draws a week, on Wednesdays and Saturdays. 17 Here's what statistically with these 18 changes the draw pattern may look like. That within 19 one year, which is 154 draws because we have two a 20 week, then the number of times we would have jackpots 21 at the levels of four and 11 -- four through 11 22 million could be as many as ten times. 16 to 29 23 million, as many as eight times. From 37 to 24 $67 million jackpots could happen as much as four 25 times within a year. And that there should be WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 7 1 statistically, based on this matrix, a jackpot as high 2 as 95 to 136 million within one year's time. 3 And then finally, just to look at the 4 two games together, you can see that we would be 5 paying out what currently is -- should have been 11 6 million could increase to $19 million. What those 7 changed, though -- and there's been concern about 8 odds. The overall odds of winning a prize currently 9 are 57, and they could go to 71. But by increasing 10 the prize payout, it allows us to also increase the 11 match four, match five, and match three level prizes 12 from three dollars to five dollars. You can see that 13 the 100 would go up to 105. And the match five, 14 2,500. So with a higher jackpot and increased prize 15 payout, people would be winning more prizes. And 16 that's basically what was presented to The Commission 17 for the rule. 18 MS. KIPLIN: With that, let me begin 19 calling people in the order in which I received their 20 witness affirmation form. Elliott Mitchell. 21 MR. MITCHELL: Good morning. My name 22 is Elliot Mitchell. I'm a Lotto Texas player. I'm 23 representing myself, I suppose. I just wanted to come 24 this morning and indicate that I think the proposed 25 amendments are a good idea. As a player, I've noticed WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 8 1 some subsidence of enthusiasm for the lotto in the 2 past four or five years. But I support wholeheartedly 3 the purposes for the Lotto Texas, which is to improve 4 the quality of life here in Texas. I think that the 5 proposed amendments will have the overall effect of 6 increasing the enthusiasm for the lottery. And I 7 think it will make it a lot more fun for the players. 8 And I think it will also have the effect of generating 9 much more revenue. And I think that's a good idea for 10 Texas. Thank you. 11 MS. KIPLIN: Thank you for your 12 comment. 13 Misty Dawn Herft-Taylor. I'm sorry if 14 I'm messing up your name. 15 MS. HERFT-TAYLOR: My name is Misty 16 Dawn Herft-Taylor. I am assistant manager at a 17 convenience store in Georgetown. I am all for the 18 changes in the lottery if it will bring more money to 19 the state, to the schools. The customers that I have 20 talked to are for it, too because the jackpots aren't 21 big enough right now. And our sales are better when 22 the jackpot reaches 23 to 68 million. So the 23 customers I've talked to are for it. 24 MS. KIPLIN: You mentioned you were an 25 assistant manager for a convenience store in WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 9 1 Georgetown. What's the name of the convenience store? 2 MS. HERFT-TAYLOR: Jiffy Mart. 3 MS. KIPLIN: Thank you for your 4 comment. 5 Maria Lorenzo-Moore. 6 MS. LORENZO-MOORE: Hi. My name is 7 Maria Lorenzo-Moore. I'm from Killeen, Texas. I'm 8 assistant manager at a corporate convenience store 9 there. I have been there for six years. I do agree 10 with the changes, as well as probably 95 percent of my 11 customers. Thank you. 12 MS. KIPLIN: Can I ask you the name of 13 the corporate convenience store? 14 MS. HERFT-TAYLOR: I'd rather not 15 disclose that information. 16 MS. KIPLIN: Okay. And you're for the 17 changes? 18 MS. HERFT-TAYLOR: Yes, ma'am. 19 MS. KIPLIN: And why are you for the 20 changes? 21 MS. HERFT-TAYLOR: It will bring more 22 money. 23 MS. KIPLIN: Thank you for your 24 comment. 25 Eric Nelson. Good morning. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 10 1 MR. NELSON: Good morning. My name is 2 Erik Nelson, and I'm just a jackpot player. And I'm 3 for the changes. 4 MS. KIPLIN: I'll ask you the same 5 question: Why are you for the changes? 6 MR. NELSON: Because it will bring more 7 money to the players out there. 8 MS. KIPLIN: Thank you for your 9 comment. 10 MR. NELSON: Thank you. 11 MS. KIPLIN: Gerald Buswald. 12 MR. BUSWALD: Seems like we were just 13 doing this last September. My name is Gerald Buswald. 14 I'm a mathematics professor at San Antonio College. 15 I'm also president of the American -- I mean, the 16 Texas Mathematical Association of two-year colleges. 17 First of all, I would like to respond 18 to something that happened after the last time I 19 testified, in which I pointed out errors in your press 20 releases at that time claiming what you -- how you 21 were going to increase the number of winners. And 22 after I testified, the Lottery Commission issued a 23 press release, and I have copies of that press 24 release, that says the current average -- I questioned 25 your thing that the current average number of winners WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 11 1 per drawing is $275,000. The new game will have as 2 many as $606,000. Of course, we know that's 3 incorrect. However, what I'm complaining about is the 4 Lottery Commission's response to that, because in your 5 press release, you said that those figures are 6 accurate based on theoretical projections by the 7 Lottery's on-line GTECH Corporation. These 8 calculations provided to the Lottery Commission are 9 based on current industry standard prize levels. Mine 10 are also -- you're saying Mr. Buswald's calculations 11 are also correct based on actual sales. In fact, what 12 the two numbers were, and I didn't realize this until 13 after the hearing, was there were two -- approximately 14 275,000 winning combinations in the old game, counting 15 all prize levels. And in those proposed rules, there 16 were going to be 606,000. However, that one was out 17 of 15.9 million, not 15.8 million, as all Lottery 18 press releases seem to continue to do. And the new -- 19 that other proposal was for 606,000 out of 25.8 20 million. So you weren't comparing apples and oranges. 21 I wanted to also comment -- and I was 22 glad to see that you actually corrected something. I 23 had gotten a copy of the proposed game rule change 24 information sheet. And you said the current annual 25 average jackpot is at seven million. With the new WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 12 1 game, the average jackpot is projected to increase to 2 19 million. That is certainly more -- the seven 3 million, you're comparing apples and oranges there 4 because the projected, as you pointed out, was about 5 11 million. And so you took a dip in the -- in the -- 6 when we had a string of winners in a row and used that 7 to make the argument for increasing the jackpot. 8 I think I would like to request that as 9 math errors are discovered, the Lottery Commission be 10 more honest in their responses. When I -- when my 11 statistics class found an error three years ago, the 12 Lottery Commission was less than honest in their 13 response. And they said, we're not going to say the 14 students are right. They just did it a different way. 15 And until Lieutenant Governor Bob Bullock intervened, 16 you didn't admit that the students were correct. 17 Now, I don't want to have all negative 18 news. So my students -- I do have a statistics class 19 again, and they are working on looking at your 20 proposals. I have prepared some summaries of the 21 proposals. But the students thought they'd like to 22 make a proposal of their own. And the students' 23 proposal basically is to go ahead and institute The 24 Commission's suggestion to increase the jackpot to 55 25 percent of sales, of draw sales, but to keep the game WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 13 1 at six out of 50 balls and eliminate the prize that 2 you say players find insignificant, namely the three 3 dollar prize amount. By doing that, you could 4 actually increase the projected jackpot by 36 percent, 5 which is a significant increase in the jackpot without 6 increasing dramatically the -- or decreasing 7 dramatically the probability of anybody winning it. 8 Right now, if you took a Coke can and you stretched -- 9 if you stacked them side by side and you stacked 10 15,890,700 of them, it would stretch about 652 miles. 11 You'd have to pick the right one out of 652 miles of 12 Coke cans. With the new rules, that line is going to 13 stretch for, let's see, 1,060 miles. So we are 14 dramatically increasing. 15 The other thing that I would like to 16 point out is that the new game, the new rules will 17 change the probability of winning a prize greater than 18 the minimum prize, which I personally feel both three 19 dollars and five dollars are insignificant. Nobody 20 buys a lotto ticket to win three dollars or five 21 dollars. The probability of winning a prize more than 22 that amount under the current rules is one in about 23 1100. Under the new rules, the probability of winning 24 any prize more than five dollars will be one in 1500. 25 Once again, a pretty significant change of winning any WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 14 1 significant prize. Certainly, the jackpots will be 2 greater. My students are doing surveys, surveying 3 players and asking them, would they be willing to give 4 up a three-dollar prize to have a 36 percent increase 5 in the jackpot? Several have -- we're still compiling 6 our surveys and doing our statistical analysis of 7 those surveys. But they did find that many players 8 did think that they -- given those two options, they 9 preferred the students' plan. Thank you very much. 10 MS. KIPLIN: Thank you. Mr. Buswald, I 11 noticed on your witness affirmation form you indicate 12 you're representing yourself. 13 MR. BUSWALD: Yes. 14 MS. KIPLIN: You didn't indicate you 15 were a math professor at San Antonio or the president 16 of an association of two-year colleges. 17 MR. BUSWALD: Right. I can't -- 18 because I -- the board has not met and said -- I am 19 representing myself. But that is my position. Those 20 are my positions, just -- okay. 21 MS. KIPLIN: But you're bringing 22 forward your students' proposal? 23 MR. BUSWALD: I am bringing -- I'm also 24 speaking for my students, yes, for my statistics 25 class. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 15 1 MS. KIPLIN: And then, if I could, I 2 wanted to ask a question regarding the comments you 3 raised on errors in press releases. My understanding 4 of your comments, that had to do with the former rule 5 making and does not have to do with the current rule 6 making? 7 MR. BUSWALD: That is correct. That's 8 correct. 9 MS. KIPLIN: Thank you, sir. 10 Becky Anderson. 11 MS. ANDERSON: Hi. I am Becky 12 Anderson. I am representing Tetco stores. We're a 13 convenience store chain. We have approximately 137 14 stores across the state. 15 Typically we've seen that when the 16 jackpots are higher, we generate more sales and 17 customers are more enthused with the game. So we are 18 here to say we are in favor of that matrix change. 19 MS. KIPLIN: Thank you. 20 Dawn Nettles. 21 At this time, let me say that this is 22 the last witness affirmation form I have. If there is 23 anybody who has come into the room recently or anybody 24 who has reconsidered and does want to come forward and 25 offer oral comment, please come forward now and WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 16 1 provide me your witness affirmation forms. Thank you. 2 MS. NETTLES: Good morning. 3 MS. KIPLIN: Good morning. 4 MS. NETTLES: How are you today? 5 MS. KIPLIN: Fine, thank you. 6 MS. NETTLES: Okay. Which one of these 7 work, all of them? First of all, my name is Dawn 8 Nettles. I'm the publisher of the Lotto Report out of 9 the Dallas area. And I have two piles here: This 10 pile, and I've got this pile. 11 MS. KIPLIN: For the record, the 12 piles -- this pile was one to Ms. Nettle's left, and 13 the other one was a pile to Ms. Nettle's right, which 14 is now on the floor. 15 MS. NETTLES: Excuse me. I want to get 16 set up. 17 MS. KIPLIN: Sure. 18 MS. NETTLES: I have a lot of notes and 19 a lot to say. 20 I'm here as the publisher of the Lotto 21 Report, as a player, and I'm also here speaking for 22 the players of Texas. I did not ask for that role. I 23 was assigned that role, I suppose, from my website and 24 my subscribers. I'm also here because my publication, 25 the Lotto Report, sales in the Dallas-Fort Worth area WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 17 1 and all the retail stores. And my sales are terrible. 2 They are down. In the last two years, my sales have 3 declined by over 40 percent, which is -- and which is 4 really, really bad. It's not because I have a bad 5 product, which I forgot to bring a Lotto Report up, 6 but I did set some back there. It's not my product 7 that's bad. When you have bad sales, you look to see 8 why you have bad sales. And in my case, my product is 9 excellent. For two years I've been going to these 10 retailers, and I've been trying to find out, hey, 11 y'all, come on, what's wrong with our sales? Let's 12 get them up. We -- you know, and what I have found 13 repeatedly on the stores is, my product can't sell 14 because they hide it. They will be put behind -- they 15 will be moved over way back now where they have moved 16 the ticket display centers. And the store managers 17 will tell me, well, my supervisor comes through, and 18 he says that we no longer want to push lotto, and he 19 doesn't want anything to remind people other than what 20 we have to have in the store. Our sales are down. We 21 don't make enough money. We need more money. We 22 cannot get the Texas Lottery Commission to come to our 23 rescue and pay us. And at a nickel apiece, it's not 24 enough money. So I have been evaluating my sales 25 situation and my decline for the past two years. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 18 1 Now, when I tell you it's not my 2 product that's bad, the way that I prove that is, as a 3 publisher, everyone knows that 97 percent of all 4 magazines fail. I've been around since July of '93 5 with the Lotto Report. I'm the only one who still 6 exists today. Everybody else has gone under because 7 their sales in the stores have declined so bad. But 8 the reason that I can tell you that my -- that I have 9 a good product is because I have one record that 10 nobody else has, and that is that my subscription 11 base, every time I send them a renewal notice, they 12 send me a check back to renew. They do not want to go 13 without their Lotto Report. If I had to depend on my 14 stores, my retail stores, then I would be bankrupt 15 today, because my sales in the store are terrible. 16 Okay. They're terrible because I don't have anybody 17 pushing the Lotto Report. But I'm out there every day 18 fighting. And I thank God for the stores that I do 19 have that sell the Lotto Reports. And I've got some 20 out there that really push the Lotto and that really 21 push the Lotto Report, and those are the ones that 22 keep me alive. It is not 90 percent of them that hide 23 it and want to disregard the Lotto because they have 24 problems here. Okay. These stores in the last two 25 years have told me, and here in the last six months in WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 19 1 particular, have told me that they absolutely have got 2 problems with their money, their five percent. They 3 are unhappy with their -- the eight liners. When you 4 discontinued or set out for the eight liners to shut 5 them down, many, many stores lost tremendous sales on 6 Lotto, because everybody who played the eight liners 7 also spent their winnings on the Lotto. They're 8 unhappy with, what they tell me, their theft policy, 9 for your theft policy for their scratch-off tickets. 10 They've got long lists. Everywhere I go, this is what 11 I hear. 12 Now, I'm with the retailers and all 13 these other people. I want sales to go up. I'm for 14 an increase in sales, because otherwise, I'm going to 15 go out, too, just like a lot of other people. I will 16 be hurt if sales -- if something doesn't happen on 17 sales. So I'm all for change to increase sales. The 18 problem lies here in how to achieve that goal. That's 19 where I differ from your opinion. I'm with these 20 people. I agree with them. Let's get sales up. 21 But the lottery consists of three 22 people: It's you, the retailers, and the players. If 23 you don't exist, we've got no lottery. I can't 24 publish a piece. They can't sell lottery tickets. 25 They can't make a living. And a lot of these small WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 20 1 independents, they count on those sales for the Lotto. 2 They would go under if you did. Okay. But if you 3 don't exist, I don't exist, and these retailers don't 4 exist if you don't have players. And players is where 5 the problem comes. 6 Now, six months ago, you-all made a 7 proposal to add four balls to Lotto Texas to draw a 8 bonus number. And you were overwhelmingly told by 9 3,500 people -- that was my count. Now, Linda Cloud 10 quotes 1,000. But she might have had 1,000 on her 11 own, but she failed to see or recognize all the 12 petitions and all -- they're a part of the record from 13 this last identical meeting six months ago. But you 14 had 3,500 people come forward and tell you, do not add 15 four balls. That's what your players told you. And 16 they told you in no uncertain terms if you added those 17 four balls, they were going to quit. Finally, you-all 18 gave up the idea. Of course, I realize now that you 19 gave up the idea only to plan to come back with a 20 better plan and a better way to present it to convince 21 the commissioners to do it. 22 So the first week in March, I got my 23 first phone call from a reporter telling me, hey, did 24 you notice the Lottery is fixing to try to sneak this 25 through again? And I said to myself, no, no, no. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 21 1 They're not going to do that. They can't do that. 2 They can't do that because they've already been told 3 no, and they've already been told they're going to 4 lose all their players if they do, and I'm one that's 5 included. They were told that California and New York 6 had this same plan and failed. Florida was facing the 7 same thing six months ago. But they didn't have, as 8 they say, a Dawn Nettles in the state, so they got it 9 through. Okay. You have come back again and proposed 10 to add the four numbers. My first and foremost 11 thought is, okay. Do it, because when you do, you're 12 going to fail, and everybody here is going to lose. 13 You-all are going to lose, I'm going to lose, and the 14 retailers are going to lose, and I'm going to get to 15 sit here and say, I told you so. 16 But this time, we went about it a 17 little bit differently. Last time you had players 18 here, you had about 15 or 20, as I recall, they got up 19 here at this podium and told you, do not add four 20 balls. Now, today, you've had a few players come up 21 and tell you to do it. I don't remember now. You've 22 had two or three come up here, and you've had these 23 retailers come up here. These retailers want the same 24 thing I do. They want higher jackpots because their 25 sales are better. Because their sales are down, and WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 22 1 you know it and I know it and they know it. Okay. 2 So this time, you did manage to pull in 3 two or three that came up here and said to do it. You 4 don't have anybody here telling you besides 5 Mr. Buswald and I that are telling you to -- not to 6 add the four balls. But this time, the Lottery 7 Commission outdid itself, as far as I'm concerned, 8 because you made the announcement on the 14th it got 9 approved that you were going to add four balls. You 10 issued a press release that day. But prior to issuing 11 that press release, you-all had already been working 12 on getting the retailers to approve the plan so that 13 when you went to the commissioners, that you could 14 have the power or the strength to convince them that 15 you have support for adding them. 16 But the problem lies in these 17 commissioners -- in the -- in the retailers and what 18 they hear. You had a meeting last week, as I 19 understand. I was not here, but I was not here 20 because I thought it was just a plain old 21 commissioners meeting. And I knew I was going to be 22 here for this one, so I didn't come last week. That's 23 why I was not here. It was reported in the newspapers 24 that I just was not here. But I wasn't here because I 25 didn't know that you were going to have all these WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 23 1 retailers in here. 2 And I question that, because I have 3 here from the text -- your testimony last week came, 4 number one, from Rick Johnson, who came up here and 5 told you-all -- it was reported in the newspaper that 6 he -- and I spoke to him afterwards, too, and he 7 confirmed it. He told y'all that he sent out 4,000 8 surveys, that he got 3,973 surveys back, and that out 9 of those, 88 percent were for this change. And these 10 surveys went to the retailers. Okay. 11 Now, I asked for a copy of the survey, 12 but I had to get it elsewhere. I got it from a 13 retailer that was here last week and testified for it. 14 And yesterday, he changed his mind after he talked to 15 me, and he found out that what's in this little piece 16 of paper is not necessarily true. By that, I mean you 17 have a paragraph in here that says, quote, similar 18 changes -- 19 MS. KIPLIN: Just for the record, 20 you've referred to it as this piece of paper. Can you 21 identify the paper for me, please? 22 MS. NETTLES: I would like to, except 23 he faxed it to me, and I don't know what that's 24 supposed to say across the top. It's the survey that 25 Rick Johnson sent out. And I found a copy in the WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 24 1 papers that you gave to me, too, but yours does not 2 clarify what it is, either. But it is supposedly the 3 survey -- it is the survey that says agree and 4 disagree at the bottom where the retailer signed it. 5 MS. KIPLIN: So you're indicating that 6 the paper you're holding in your hand is a copy of the 7 survey that was provided to the lottery retailers? 8 MS. NETTLES: That's correct. It is -- 9 it is the piece of paper that these people signed that 10 said agree or disagree. Okay. 11 Now, this piece of paper, the part -- I 12 mean, there are several pieces to this piece of paper 13 I'm going to make comment on. But the main thing I'm 14 going to make comment on is, this piece of paper 15 spells out your plan. Okay. I'm not going to read it 16 verbatim because you said not to a while ago. But it 17 tells them that by increasing the -- it tells them 18 that higher jackpots would result in a one percent 19 bonus increase or higher one percent bonuses for 20 retailers to sell a winning ticket. It also points 21 out additionally, the prize payout will increase from 22 50 to 55 percent. Now, right now, I agree and I 23 agree. Myself, I agree and I agree. 24 The additional prize funds will be used 25 to bolster prize categories. Since the people WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 25 1 complain that they don't make money or they don't win 2 enough, I agree, too. Okay. 3 Then you go in and you explain that 4 you're going to increase it from three to five 5 dollars, and you're going to increase from 1500 to 6 2500. And then -- and then that little last sentence 7 says the prize -- the odds of winning the jackpot 8 increases from one in 15.8 to one in 25.8 million. 9 That's just a little incidental. That's adding the 10 four balls. And retailers may not pick up on that. 11 Retailers are focused on one percent bonus or higher 12 bonus still and the fact that you've told them sales 13 are going to increase. 14 But the problem I -- the real problem I 15 have with this piece of paper says, quote, similar 16 changes recently adopted for lotteries in New York and 17 Florida brought marked increases in sales and 18 dramatically boosted player interest in those states. 19 Okay. Now, excuse me for being quite so blunt, but 20 ladies, that's a lie. I received this morning from 21 the state of New York, every change that they've 22 made -- New York started their lottery in 1967. They 23 started out at six and 40. They went to six and 44. 24 They went down to six and 40. They went to six and 44 25 again. Then they went to six and 48. Then they went WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 26 1 to six and 54. And that was such a loss that they -- 2 the change that they made that you're referring to is, 3 they dropped it to six and 51. They lowered their 4 number of balls. Okay. They are happy now. I spoke 5 with Maxine Gibbs, who is the New York lottery 6 spokesperson, and she went into great lengths about 7 how their players and how their people opposed and 8 fought for 11 years, how they lost -- they hung on to 9 those four balls for 11 years before changing. 10 Now, California did the same thing. 11 But California came back and lowered their balls, and 12 it only took them a year or two. I don't recall the 13 exact length of time. 14 But you-all know and I know the states 15 have to lower the balls. You make it harder for 16 people to win, people will quit playing. Okay. 17 Now, we have that one piece of paper. 18 This survey, I agree. If you handed me this, I 19 would -- my only choice of answer is to agree or 20 disagree. Now, the gentlemen who says he did this -- 21 oh, you do not -- also, you leave out on this piece of 22 paper that this was done in New York and California, 23 but failed. 24 MS. KIPLIN: The you you're referring 25 to when you say, you leave out, is who? WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 27 1 MS. NETTLES: Well, whoever did it. 2 I'm assuming y'all, GTECH. I don't -- the Texas 3 Association of Lottery Retailers. 4 MS. KIPLIN: Okay. 5 MS. NETTLES: Okay. Is who announced 6 to you last week that he did this survey. 7 MS. KIPLIN: So that's the you you're 8 referring to? 9 MS. NETTLES: Yeah. 10 MS. KIPLIN: Okay. 11 MS. NETTLES: Except that when I say 12 you, he didn't do it alone, because I have retailers 13 telling me that GTECH reps have been out there trying 14 to collect signatures. This piece of paper tells them 15 to call the Texas Lottery Commission. It lists your 16 phone number and GTECH's phone number, everybody's 17 phone number. Okay. So as far as I'm concerned, we 18 have a group joint effort to get these pieces of paper 19 in. Okay. That's the way it would appear to me. 20 That is my common sense logic on the situation. Okay. 21 But this piece of paper that these 22 retailers agreed on representing their customers that 23 they are really ultimately going to lose if you add 24 the four balls. Okay. They will lose customers. 25 This piece of paper, the neatest sentence in it that I WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 28 1 like the best -- and this is just the end of a 2 sentence -- says, quote, and there will be no adverse 3 effect on small businesses. If you put them out of 4 business, is that not an effect? Is this grounds for 5 a lawsuit for the retailers to sue you if your plan 6 fails? Okay. We've had that piece of paper. 7 Now, we have the statement from 8 GTECH -- well, let's go back to this piece of paper. 9 He said that he sent out 4,000 -- the newspaper said 10 that he sent out 4,000 of these surveys to members and 11 nonmembers. Now, this gentleman I spoke to, I asked 12 him -- and this is real important. I said, Rick, I 13 understand you testified that they ought to make these 14 changes. The retailers told you to. He said, yes, I 15 did. And I said, well -- 16 MS. KIPLIN: I'm sorry. For the 17 record, you said Rick. Do you have a last name? 18 MS. NETTLES: Rick Johnson. He's the 19 president or he's something. I don't know who he is. 20 I spoke to him after he testified last week. And I 21 called him and I said, I want to find out what you 22 told them. I mean, I -- this is what I hear. The 23 reporters are calling me and telling me this. And I 24 can't believe -- I know how unhappy the retailers are 25 with The Commission over their percentages and all WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 29 1 this good stuff. And I know sales are down, but I 2 also know why sales are down. And I said, did you 3 tell them how unhappy the retailers were? And he 4 laughed and he said, no. He said, the whole 5 conversation of that meeting, the entire purpose was 6 that it was over the four balls. And I said -- and I 7 said, no. I didn't even tell them that they tried to 8 boycott The Commission last week, that the retailers 9 wanted to boycott The Commission last year. Okay. 10 You-all know that's right. I know that's right, 11 because I was in on it then, too. Okay. 12 MS. KIPLIN: You're referring to -- 13 MS. NETTLES: The Commission. When I 14 say you, I'm referring to The Commission. 15 MS. KIPLIN: You're saying The 16 Commission had knowledge that the retailers tried to 17 boycott the lottery. You say you know that's right 18 or -- 19 MS. NETTLES: No. I'll -- to be real 20 clear on that, the Lottery Commission knows and has 21 known that the retailers are unhappy and have been 22 begging for some way to increase sales, and will grasp 23 at straws and do anything to get their sales up. I 24 agree with the retailers, because I, too, publish a 25 piece, that if it does not sell, then I go out of WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 30 1 business and get hurt, too. Okay. 2 Now -- okay. That's Rick Johnson, 3 which incidentally he sent out 4,000. He only has two 4 or 300 members. So he had to have a group effort. 5 Somebody else had to help with the survey. He took 6 credit for it last week, but he couldn't have done it 7 himself. So you know, we have a discrepancy in 8 numbers there. 9 I've also requested from open records 10 just yesterday to receive the original surveys. And 11 I'd like to see every survey, and I'd like to go 12 through every one, and I'd like to count them myself. 13 And if you would like, I'll do it while I'm here 14 today. 15 Now, the 14th of March when you had 16 your meeting, GTECH, you had two people at that 17 meeting on the 14th of March. You had Jerry Eubanks, 18 your statistician out of A&M, and you had GTECH, 19 besides what you-all did. But those were your two 20 people, as I recall, that testified. 21 Now, my comments on Doctor Eubanks' 22 comments is that I think it is a crying shame that the 23 Texas Lottery has to have a statistician from A&M come 24 here and explain to the commissioners why you had six 25 winners in a row. Because the Lotto is a game for the WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 31 1 people of Texas, and it is to be won. We should not 2 begrudge any winners, nor should there ever have to be 3 an explanation as to why you have winners. And 4 GTECH -- that's my comments on Doctor Eubanks. 5 GTECH, the best as I recall, got up 6 here and told you that -- or told The Commission that 7 Texas only had a cold, that we were third or fourth in 8 the nation, and he only considered that you had a 9 cold. But part of his sales pitch to the 10 commissioners was, gosh, Texas is losing a lot of 11 money to border states. 12 Well, I have here, printed straight off 13 your Lotto site yesterday or from your Lotto site from 14 one of your links, that you go to the NASPL. This 15 page shows you every state -- it takes every state 16 that has a lottery. Shows the state's population. It 17 shows 1998 sales for lottery. It shows 1998 profit 18 for lottery. It shows 1999 sales and 1999 profit. 19 Then it comes over and it's per capita, per person 20 what is spent on an average by each person in that 21 state. Now, I'm going to point out that Louisiana per 22 person spent $66.14. New Mexico had $51.58. Texas 23 comes in there at 129.53. And I think that that 24 clearly shows you the expense, and we're not losing a 25 whole lot of money. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 32 1 Now, if you want to argue the case, 2 then I strongly recommend that you look up here at the 3 little state of Delaware. They don't even have a 4 million people, yet their record shows that their per 5 capita spending, each person spends $703.24 in the 6 Lotto. Now, that right there clearly shows you that 7 you have out-of-state money coming into that state. 8 That is not the case. It is not shown here. As well 9 for Massachusetts, its spending was $552 per person. 10 Rhode Island is sitting in there at $748 per person. 11 And South Dakota is in there at $750.97. 12 I don't believe we are losing much 13 money from Texas to other states. You might lose some 14 when the power ball really gets up there. But again, 15 I don't think the Texas Lottery Commission has a right 16 to begrudge competition, and that's what you-all are 17 really doing. So when GTECH testified last week that 18 Texas was losing entirely too much money to the border 19 states, clearly show you that is not true or the case. 20 Florida sales. Ms. Cloud last week -- 21 or on the 14th of March told the commissioners that 22 Florida was just doing fantastic, great guns. I 23 printed up yesterday Florida's history since they 24 added their four balls to the Lotto, their jackpot 25 amounts. And I'm going to point out two things on WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 33 1 there. Number one, Florida increased their lotto 2 drawings from once a week to twice a week. That 3 should automatically double their sales. Okay. At 4 the time she made that statement, Florida was on a 5 good roll that had all losers. They were up at 20, 6 $25 million with their jackpot. They were climbing. 7 As a matter of fact, they reached $80 million before 8 somebody hit it. And they had one winner. Now, they 9 added their balls. 10 Their sales today are down. Their 11 jackpots climbed from three million to five million to 12 eight million. Texas on 50 balls is ranging from 13 three million to six -- now, lower to six million, and 14 it's going to lower more when you add those four 15 balls. Okay. Florida sales have not climbed. It's 16 on the Internet, on this piece of paper. Okay. So 17 that's what was told to the commissioners on that 18 March 14th meeting. Okay. 19 Now, coming down. My next comment. I 20 requested from open records, from Lucy, to receive all 21 the comments that you-all have received regarding 22 these changes to see where we stood. So what I have 23 here is all the responses. I told you when I sat down 24 here that I've got two piles. Uh-oh, I covered my 25 pile. I don't want to do that. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 34 1 What we have here, we have two piles. 2 This pile are your comments from people, everything I 3 received are for these changes. This pile. There is 4 8 of them, by the way. 5 This pile is everybody who is against 6 it. This pile tells you in no uncertain terms that if 7 you add balls, they will quit playing the Lotto. More 8 importantly, this pile also tells you that not only 9 will they quit playing, but that they have also talked 10 to all their friends and all their relatives, and they 11 will not play, either. 12 So while you only have 2500 to 3,000 13 names here, more in my computer this is just what is 14 here in this pile 2500, 3,000 people. I have been 15 through every piece of paper that y'all sent to me. 16 And I found it real interesting that out of -- I 17 paid -- I paid ten cents a copy. I paid 575 pages. 18 And I found three pages that was a letter, a survey 19 from the retailers that had come into you-all. Now, I 20 requested every comment on it, but there is only one. 21 Yet you have 3,973 surveys returned, yet there is only 22 one in this pile. And what I find more interesting of 23 all about these three pages is that the players, where 24 you get your money, the players who support us, me, 25 you, and the retailers. Without the players, you have WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 35 1 nothing. Okay. 2 There has only been one press release 3 issued, and that was on the 14th of March, adding the 4 four balls. The Texas Lottery Commission, to the best 5 of my knowledge, you have nothing up on your website 6 other than your one original deal. You have not -- 7 the Texas Lottery Commission has not issued any press 8 releases and asking the people to come here to give 9 you a response. None at all. You made no effort. 10 However, what you have done that I 11 think is just fantastic is, I have papers here that 12 indicate you have spent six months getting your 13 retailers to come forward. Because I have this letter 14 that's in that pile, and this was to the retailer, 15 Mr. Jerry Calhoun. You have not returned this. And 16 this is dated April 4th. Please, we must have this by 17 April 19th. Now, that's another point. Today is 18 April 19th. 19 Okay. Toni, I see you. You want to 20 say something? 21 MS. SMITH: No, ma'am. 22 MS. KIPLIN: We're here to receive your 23 comment. 24 MS. NETTLES: Okay. This survey is 25 telling the retailers, hey, this meeting is on the WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 36 1 19th of April. That's when you can go to Austin and 2 make your comments if you want. This follow-up letter 3 trying to get surveys in dated April 4th is also 4 saying, we want you in Austin. Hopefully you'll come 5 to Austin on April the 19th. 6 How come they were all here last week? 7 That's what I'd like to know. We really had -- 8 something must have taken place to have gotten the 9 retailers here last week for a commissioners meeting 10 to appear for the commissioners. Yet you have 4,000 11 out asking them to appear here today, or somebody has 12 4,000 out. This is associated with y'all. 13 So this man faxes his comments back, 14 that he's for these changes, which I understand. I'm 15 for bigger jackpots, too, and I'm for making more 16 money. Okay. The players of Texas tell you no. Do 17 not add four balls. 18 You said that you didn't want anything 19 read. And I'm not going to read to you much. 20 However, since I do have right at 3,000 people telling 21 you, don't add four balls, and if you do, they're 22 going to quit playing, and that all their friends and 23 all their family and all their business associates 24 will also quit. And since I'm telling you that 25 California and Florida -- I mean, California and WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 37 1 New York both did this and lost. And since I have 2 shown you that on your own papers that you have 3 misrepresented to your retailers that this plan has 4 been done successfully. I believe they should have a 5 right to come forward and to change their plea. And 6 for the record, with them is almost on that list. 7 MS. KIPLIN: You refer again to your 8 own papers. But you're referring to a survey that you 9 indicated was by an -- by association. Is that 10 correct? 11 MS. NETTLES: I don't know who did the 12 survey. I only know who testified to it, Rick 13 Johnson. But I know that you-all's phone number is on 14 here, the Texas Lottery. Your name is on it. Contact 15 Kimberly Kiplin. Okay. 16 MS. KIPLIN: But let me, just for 17 clarification, indicate that my name has been in just 18 about every major daily in terms of how to receive 19 comment. And I think my name is also on your website. 20 Is that right? 21 MS. NETTLES: You're a popular lady, 22 Kimberly. Everybody knows your name. Okay. Yes. 23 Okay. Since we've had people here and since the 24 players of Texas -- I'm going to tell you how they 25 feel. They almost feel like I do. They almost want WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 38 1 to say, add those balls, because if you add those 2 balls, we're going to quit buying. And when we quit 3 buying, you're not going to exist. And that is what's 4 going to happen. It did happen elsewhere. It's going 5 to happen here. 6 But I've had people ask me to speak for 7 them. Now, I'm not going to read you these. But 8 since these people have no idea to the text of what's 9 in here, I'm going to share a couple of sentences with 10 you, two sentences. 11 MS. KIPLIN: And then I'll be glad to 12 receive those in the record. 13 MS. NETTLES: Oh, I -- they have given 14 them all to you. They are yours. Okay. So I am 15 handing these all over. I'm not going to give you 16 your part back. I'm going to give you everything that 17 I have. 18 If this proposal goes through -- this 19 is from Rebecca Hamel out of Baytown, Texas. 20 H-a-m-e-l. If this proposal goes through, the people 21 of Texas will stop buying tickets so fast, the TLC 22 will crash and burn. 23 As for myself, I have asked you this 24 question: Are you nuts? 25 MS. KIPLIN: Who is -- who are you WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 39 1 reading from? 2 MS. NETTLES: I'm sorry. Okay. 3 Charlie -- this is from Charlie Johnson. He is out of 4 Amarillo, Texas. And he says: As for myself, I have 5 to ask you this question. Are you nuts? If you 6 change the pick six from 50 to 54 balls, I will not 7 play it anymore. So you can kiss my $10 a week 8 good-bye. 9 This is from Bob Olson, Buckingham Dam. 10 I would like to take this opportunity to let you know 11 that many of my friends and I are against the plan 12 that Executive Director Linda Cloud has which would 13 add four extra balls to the current lotto. 14 Now, these people say more. I'm only 15 just reading you one sentence. 16 This is from Mr. Guy Williams. At this 17 point, I almost wish you would do it so the people of 18 this great state will quit playing. Then maybe The 19 Commission will be reminded just where the money comes 20 from and stop rerunning this stupid idea every time us 21 players let our guard down. 22 This is from Milton B. Williams. 23 Please stop lottery people from adding four numbers. 24 It would destroy the game and lose my 20 dollars per 25 week. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 40 1 This is from Duane Schwab. If the 2 proposed changes should become fact, I will make no 3 purchases from the Lottery. 4 Well, this one is just a copy of the 5 newspaper article. And I don't have the lady's name, 6 but it says it's marketing -- it's pointing out the 7 GTECH paragraph, and it's -- she's referring to the 8 GTECH parts. And then it says, this idiot doesn't 9 know what he's talking about. Not true. The odds are 10 too high now. And then she writes, read my lips. No 11 changes. 12 This one is from Tom Williams of 13 Houston, Texas. He says, when the four additional 14 numbers are added, it will be at the end -- it will be 15 the end of our playing any of the Lotto. 16 This is from Nancy Coile. It's an 17 e-mail, so I don't know where she's from. Having 18 spoken to a number of loyal players who are upset 19 about this change and state they will no longer play 20 the Lotto, I have one question. If all of us quit, 21 how are the jackpots going to increase? 22 This is from James Kreimeyer, 23 K-r-e-i-m-e-y-e-r. And it's dot, dot, dot. But I can 24 just as easily find some other way to spend my 25 entertainment money. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 41 1 This one is from Wild Bill. That's his 2 e-mail. 3 MS. KIPLIN: Wild Bill? 4 MS. NETTLES: Wild Bill, yeah. I don't 5 know -- oh, I think his name is -- his name is Bill 6 Hayes, H-a-y-e-s. Mrs. Cloud needs to be replaced 7 with someone who cares about the Lottery and the 8 players. Players is in all caps. She is going to 9 ruin all the games of Texas with this asinine idea to 10 add four more numbers to the main game. Only the 11 jackpots will be bigger. The players will get 12 screwed. I am going to contact all the newspapers in 13 Texas that I can and ask all regular players of the 14 main game of Texas to stop buying any type of lottery 15 instrument if this stupid proposal goes through. 16 This one is from B.E. 17 MS. KIPLIN: B -- 18 MS. NETTLES: B as in boy, E as in 19 Edwards. Well, just a note to tell you folks that if 20 this -- if that happens, you have lost two more people 21 who will not play the lottery anymore. 22 This is from B.H.N. to B.I.L.L. My 23 pals and I play a pool every drawing of 160 dollars. 24 If you people add any more balls to the mix, you can 25 kiss us good-bye. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 42 1 This is from -- I'll just give you 2 their names -- Darrell and Judith Shock out of 3 Rockwall, Texas. People only have so much money for 4 the Lotto, and you have spread it too thin. 5 This one is from Darrell Standlee, 6 S-t-a-n-d-l-e-e. Quote, the new idea being instituted 7 is not sitting well with any of us -- of any of the 8 people I work with. 9 This is from Bob Meyers. The idea of 10 raising the numbers to 54 instead of 50 is incredibly 11 stupid. Talk about falling sales. I know seven 12 people that will never, ever buy another ticket if you 13 go through with any of these proposals. 14 Harvey Janelli writes, please help me 15 understand how increasing the odds from one in 15.8 16 million to one in 25 million is better for the player. 17 I also can't answer that one. 18 This is from John Spicer. He asked me 19 to tell you this. Frankly, I cannot believe your 20 audacity. In my opinion, people play your games with 21 some hope of winning money. I doubt there is one of 22 us who do or would play so that the State can generate 23 revenues or so your people will have a job. 24 Personally, I would prefer a tax increase. It would 25 be more efficient and eliminate the overhead of your WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 43 1 staff, advertising, and other expenses. Should you 2 see fit to enact the above changes, I can assure you 3 that my 1040 plus annual donation will be redirected 4 to the Canadian and Australian lotteries and other 5 venues. 6 Okay. I only have -- I'm reading too 7 many. I think you get the point. That's what is in 8 this pile, letter after letter after letter after 9 letter. I have one more that I think is the most 10 fitting of all, and it's the most special. And I'm 11 going to read it from start to finish due to the 12 nature of what it says. And I'm going to read it 13 verbatim. And I want the record to show that this 14 came from your pile, from communications received 15 right here. Okay. From a newspaper story that was 16 written, but it was received by you-all. And it 17 reads -- 18 MS. KIPLIN: Can you identify who it's 19 from, please? 20 MS. NETTLES: Oh. Yes, I will. I'm 21 sorry. The person who wrote this, his name is John E. 22 Pedraza, P-e-d-r-a-z-a. This man writes, Mr. Dawn 23 Nettles, I hope you never run for any public office 24 'cause I sure going to remember your name. The only 25 reason us old people play the Lotto is because we do WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 44 1 not have enough money to live on. You try to live on 2 550 dollars a month. I play two dollars or four 3 dollars 'cause I would be glad to leave my kids and my 4 church a little something before I go. Now, you are 5 trying to change it to 54 balls. It is hard enough to 6 hit six balls out of 50. What you have to do to get 7 more players is to pay more money when a person hits 8 five out of six. I bet you would have more players 9 overnight. I once hit five balls and only got 1,823 10 dollars. And it is damn hard to hit five balls. Then 11 tax man got some of it, too. They will be lots of us 12 old people stop playing it. And then you will see the 13 cash flow slow down to a stop. We get together now at 14 the center and talk about it. So the state is going 15 to be the big loser, and you will be out of a job. 16 Think about what you are doing before you do it, 17 because once you turn off a customer, it hard to get 18 him back. Signed, John. 19 Your games are already tough. You 20 don't get more players by producing losers. And the 21 reason your sales are down now is because you don't 22 have a living soul -- you have very few retailers out 23 there -- incidentally, I have the top 20 here. They 24 do a tremendous job. Those of us who try to sell the 25 Lotto, we push it as hard as we can. But you've got WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 45 1 more stores out there than you have stores that do not 2 push Lotto. You walk in the store, they hide 3 everything. They remove their signs. They have 4 halted sales on you. That's how come these retailers 5 are suffering and hurting, is because the big chains 6 don't push sales. Nobody cares about selling the 7 Lotto anymore. And if you pay your retailers the 8 money that they deserve, your bigger ones -- your 9 small ones that work real hard on it, they're 10 satisfied with their money. They just want bigger 11 jackpots. But you know and I know that those 12 retailers need more money, and they're unhappy. 13 Now, I'm going to turn over to you all 14 these documents, which is 3,000. And I understand I 15 have until the 30th of April to bring in the rest. I 16 have an additional three or 400 e-mails in my computer 17 that I did not print out because y'all don't pay me 18 for these copies. I'm out the expense of it. I have 19 to pay you for yours, but you don't pay me for mine. 20 But I have another 300 e-mails in my computer that are 21 sent to me that only say, opposed to proposed 22 amendment, whatever it is, in the subject matter. I 23 was not going to waste my printer, ink, and paper to 24 bring blank pages with only a subject matter. I can 25 produce it for you and will produce it for you. WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 46 1 I am additionally taking all these 2 papers to -- I have -- I have brought industry money 3 into your city, because Office Depot is producing 4 these. I'm having 50 copies of each one of these 5 pages. And I intend for the representatives and the 6 governor. Speaker of the house Pete Laney. 7 Lieutenant governor Rick Perry. And the 8 representatives of Texas to have copies so that if you 9 rule that you're going to add these four balls, then 10 they'll know what you based your opinion on. 11 And the retailers, I have a feeling 12 they're going to get mad at you now, because you 13 did -- this piece of paper that they signed led them 14 to believe that this was done successfully elsewhere, 15 and it was not. And I don't think you-all should get 16 away with that. 17 And I've got one more statement, and 18 then you're going to get lucky and get rid of me. I 19 have also learned that you-all have already purchased 20 your 54 balls. And I think that upsets me more than 21 anything. Thank you for hearing my comments. 22 MS. KIPLIN: Sure. I just wanted to 23 clarify a few things for the record. You indicated 24 that you had some 2,500 to 3,000. Is that the pile to 25 the left of you? Is that a combination of what you WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 47 1 received from this agency as well as what you've been 2 provided yourself? 3 MS. NETTLES: Right. 4 MS. KIPLIN: So that's not -- at the 5 time that you received the response and pursuant to 6 the open records request is not the 25 to 300 -- 7 pardon me, 3,000 you received from us. It's a 8 combination? 9 MS. NETTLES: Okay. Yes. You gave me 10 575 sheets. Okay. That's what I paid for. Out of 11 that 575 sheets, you had 60 sheets that were letter -- 12 that were letters of response to letters that did not 13 count. Okay. You had a few mistakes in here. You 14 had a bingo. You had a couple of mistakes in here. 15 You even had the survey, but it also didn't help you. 16 MS. KIPLIN: My question was, is that a 17 combination so that when your -- 18 MS. NETTLES: Yes. Your combination 19 right now, best as I can judge, you have, between you 20 and me, right at 3,000 people telling you, no, do not 21 add these four balls. 22 MS. KIPLIN: My other question had to 23 do with the witness affirmation form. You indicated 24 on the witness affirmation form that you were 25 representing the Lotto Report. But in the beginning WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 48 1 of your comments, you indicated that you were 2 representing the Lotto Report, yourself as a player, 3 and then you also indicated you were speaking for the 4 players of Texas. Is that -- the players of Texas, 5 are those all the players of Texas, or those that have 6 communicated to you? And my follow-up is, is that an 7 organized group or an association? 8 MS. NETTLES: No, it is not an 9 organized group. It is only what I've had the players 10 tell me, that have responded to me. They've asked me 11 to come here. So therefore, I would assume my answer 12 is, I'm just speaking for them on their behalf. The 13 people are -- these 3,000 people are -- you've got 500 14 in the group. 15 And then also for -- let the record 16 show, too, that this is only what was as of April 3rd. 17 Okay. You-all did not issue any press releases. 18 There was no newspaper or television coverage until 19 last week. And I know you have a whole lot more now. 20 So this 3,000 is probably going to double. But I 21 won't know until I get it from Lucy. Okay. So only 22 you know what you have here in opposition. But you 23 have a whole lot more people telling you. And these 24 are your customers, not your retailers. These are 25 your customers. If you shut it -- if you add the four WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 49 1 balls, you're out of business. That's what your 2 people are telling you. 3 MS. KIPLIN: Okay. Thank you. Thank 4 you for your comments. 5 MS. NETTLES: Oh. And for -- and I 6 have -- I'm not giving you yours back. So here's -- 7 MS. KIPLIN: Thank you. That would be 8 a redundancy in the record. 9 MS. NETTLES: Yes, ma'am. Let that -- 10 here is your copies of what you don't have -- 11 MS. KIPLIN: Thank you. 12 MS. NETTLES: -- of those statements. 13 MS. KIPLIN: So that's a subpart of 14 what you've been referring to as the 2,500 to 3,000. 15 Correct? 16 MS. NETTLES: Yes. 17 MS. KIPLIN: Okay. Thank you. 18 MS. NETTLES: That's my part, my 19 contribution to it. It's just that the pile is 20 smaller because I Xeroxed it. And they're not 21 originals. 22 MS. KIPLIN: Thank you for your 23 comment. 24 Troy Burns. 25 At this time, let me tell you that I've WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 50 1 got three witness affirmation forms remaining. If 2 there is anybody in the audience that would wish to -- 3 that does want to address The Commission, if you would 4 complete a witness affirmation form and come forward. 5 Troy Burns. Okay. Let me go ahead and 6 indicate that Mr. Burns is representing himself as a 7 regular jackpot player. And he is for the proposed 8 amendments. 9 Bomani Roberson. Let me indicate for 10 the record that Bomani, R-o-b-e-r-s-o-n, is 11 representing self and is for proposed changes. 12 Kevin Payne. Kevin Payne, P-a-y-n-e. 13 Mr. Payne is representing himself. And he is for the 14 proposed changes. He has a comment at the bottom of 15 the witness affirmation form. Read it into the 16 record. I would love to see more money put into the 17 jackpot because that's more that I could win. I would 18 love to see you stay, he says. 19 Is there anybody else? Let me give it 20 a little bit of time. I believe I've got one 21 gentleman who is completing a witness affirmation 22 form, possibly two, and that's what we're waiting on. 23 I've been -- excuse me. I've been 24 handed two additional witness affirmation forms. 25 Christine Beatty, B-e-a-t-t-y, does not wish to WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 51 1 testify. Is for the proposed amendments. 2 Isidro Rodriguez does not wish to 3 testify. Is for the proposed amendments. 4 Also, I've been handed a number of what 5 are characterized as petitions. I think a more 6 accurate characterization would be comments. There is 7 a scrap of paper that's on the front of these 8 documents, these comments that indicate that they are 9 all in support of the proposed rule. 124 comments in 10 favor of proposed rule amendments -- excuse me, 125 11 now with the addition of one more proposed -- one more 12 comment on proposed amendments. 13 I've been handed a witness affirmation 14 form. The name is -- I'm going to have to spell it. 15 L-a-j-j-u Patel, representing Shami, Inc., doing 16 business as Get & Go. Does not wish to testify, but 17 is for the proposed amendments. 18 I believe we have one more. Received a 19 witness affirmation form from Perry Nettles. Does not 20 wish to testify. Is against the proposed amendments 21 regarding the change in going to 54 balls. Thank you 22 for your comment. 23 Is there anybody else who wishes to 24 come forward and offer comment today, either by 25 completing a witnesses affirmation form and indicating WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 TEXAS LOTTERY COMMISSION PUBLIC HEARING, 4-19-00 52 1 for or against or offering oral comment on the record? 2 If not, I will adjourn the hearing. Thank you for 3 those of you that provided comment. 4 5 6 (Proceedings Concluded) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363 53 1 REPORTER'S CERTIFICATION 2 3 STATE OF TEXAS ) 4 COUNTY OF TRAVIS ) 5 6 I, MARY SCOPAS, Certified Shorthand 7 Reporter for the State of Texas, do hereby certify 8 that the above-captioned matter came on for hearing 9 before the TEXAS LOTTERY COMMISSION as hereinafter set 10 out, that I did, in shorthand, report said 11 proceedings, and that the above and foregoing 12 typewritten pages contain a full, true, and correct 13 computer-aided transcription of my shorthand notes 14 taken on said occasion. 15 16 Witness my hand on this the 20th day of 17 April, 2000. 18 19 20 21 MARY SCOPAS, RPR, Texas CSR NO. 5313 22 Expiration Date: 12-31-00 1609 Shoal Creek Boulevard, Suite 202 23 Austin, Texas 78701 (512) 474-4363 24 25 JOB NO. 000420MSH WRIGHT WATSON STEN-TEL (800) 375-4363 (512) 474-4363