1 1 * * * * * * * * * * * * * * * * * * 2 3 4 BEFORE THE 5 6 TEXAS LOTTERY COMMISSION 7 8 AUSTIN, TEXAS 9 10 11 SEPTEMBER 27, 1999 12 13 * * * * * * * * * * * * * * * * * * 14 15 16 BE IT REMEMBERED that the above-entitled matter 17 came on for hearing on the 27TH day of SEPTEMBER 1999, 18 beginning at 10:00 a.m., and ending at 11:03 a.m., at 19 the Texas Lottery Commission, 611 East Sixth Street, 20 Austin, Texas, and the following proceedings were 21 reported by Catherine A. Heine. 22 23 APPEARING: 24 MS. KIMBERLY KIPLIN 25 MS. PAMELA UDALL 2 1 MS. KIPLIN: Good morning. I'm going 2 to call the hearing to order if I can. My name is 3 Kimberly Kiplin. I'm the general counsel for the 4 Texas Lottery Commission. With me is Pam Udall, who 5 is the online products manager for the agency. This 6 is a public hearing to receive public comment 7 regarding proposed amendments to 16 Texas 8 Administrative Code section 401.305 concerning Lotto 9 Texas on-line game rule. This hearing is being 10 conducted pursuant to the Administrative Procedures 11 Act, Texas Government Code, Chapter 2001. 12 Let me just, I guess, give you a little 13 bit of background on terms of procedure of rule making 14 under the Administrative Procedures Act. This is a 15 proposed rule making. The amendments have been 16 published in the Texas Register for public comment. 17 We are in the public comment stage of a rule making 18 under the Administrative Procedures Act. Today is the 19 day to receive into the record oral comment. For 20 those of you that have written comment, we'll receive 21 that into the record. Written comment has been 22 received and will continue to be received. 23 At some point in the future, certainly 24 no less than 30 days from the date the rule was 25 published in the Register, the proposed amendments 3 1 will be ripe for the Texas Lottery Commission's, the 2 three-member commission's, consideration of an action 3 on those proposed amendments. An action can be 4 adoption of the amendments as they were proposed. It 5 could be adoption of amendments in a different form. 6 It could be the withdrawal of the rule making. So the 7 action is pretty much broad. 8 I wanted to let y'all know how the 9 hearing will be conducted today. It is, like I said, 10 a hearing to receive public comment. It is not a 11 forum to have a dialogue or to ask questions of the 12 staff. It is simply to receive public comment into 13 the record. Now, the staff may ask questions to 14 clarify comment to make sure that we fully appreciate 15 and understand the comments that are being provided 16 today. 17 Those of you that need to and want to 18 make written -- make comments, certainly we want 19 comment. There are witness affirmation forms in the 20 back. Those need to be completed and need to be 21 handed to me. I will call people in the order of the 22 witness affirmation forms that I receive. At this 23 point, I've got four. When your name is called, if 24 you will, come forward to the table in front of me. 25 The microphones are on now. If you will identify 4 1 yourself for the record, that would be helpful. If 2 you are representing someone other than yourself, 3 please identify who you are representing. 4 We do have a court reporter who is 5 recording the hearing today. She can only take one 6 voice at a time. So if you will, be courteous 7 regarding that. Then she'll have a clean record for 8 our purposes and for the public's purpose. If you 9 wish to talk, you must come to the microphone. She 10 cannot pick up from an audience member who is talking. 11 And also, it's difficult because the transcript will 12 have somebody who is unidentified making comment. 13 If you want to make comment, but you 14 don't want to testify on the witness affirmation form, 15 you can check the appropriate space either in support 16 of or opposition to the proposed amendments. Those -- 17 the witness affirmation forms that I am receiving will 18 be a part of the rule-making record. They will be 19 attached to the transcript as an exhibit. 20 For those of you that have prepared 21 written statements, in the interest of time, if you 22 would refrain from reading your written statements 23 into the record, that would be helpful. And submit 24 those written statements to the court reporter. Those 25 also will be attached to the transcript as an exhibit. 5 1 And they will be considered and will be made a part of 2 the formal rule-making file. 3 Now, with that, Ms. Udall has got a 4 presentation that she would like to put on the record 5 in terms of the background with regard to the proposed 6 amendments and specifically the proposed amendment, so 7 that we're all working from the same position of 8 information. Now, I'm going to turn it over to 9 Ms. Udall at this time. 10 MS. UDALL: Thank you. Do I need to 11 move the mike over here? 12 UNIDENTIFIED: Yes, please. 13 MS. UDALL: Normally, I would stand up 14 to do this, but in order to help the press out here, 15 I'll go ahead and sit down and make my presentation. 16 What I'm going to do is give you a 17 background as to why the Texas Lottery Commission is 18 looking as a -- why we are even suggesting we make 19 this change today. I want to make sure everybody 20 understands how the current game works and then kind 21 of go over the proposed changes and, lastly, the 22 rationale behind these changes. 23 We launched Lotto Texas in 1992 - that 24 was seven years ago - as our -- you know, our first 25 on-line product to be introduced. And it's been our 6 1 flagship product since that date. It's very popular. 2 We've enjoyed great success with the product. And, 3 like I say, many, many players enjoy the product. How 4 it works is that players pick six numbers out of 50. 5 The Lottery draws six numbers every Wednesday and 6 Saturday evening. We do a drawing where you draw six 7 numbers. And players can win by matching three, four, 8 five, and six numbers. This is the current play 9 matrix that the players have. The odds right now to 10 win the jackpot prize is one in 15.8 million. We have 11 four different prize tiers. And the three -- match 12 three of six prizes in that game is three dollars. So 13 that kind of tells you what we've been doing in the 14 Lottery for the last seven years. 15 Now, what we've experienced over the 16 last few years, especially starting in 1995, was 17 that -- our players loved the game. They came out in 18 masses, played the game, had success. However, in 19 1995, interest rates dropped. It made it a little bit 20 harder for us to keep giving our players the large 21 jackpots that they were accustomed to. In addition to 22 that, too, after playing the game for several years, 23 our players made lots of comments. And one of the -- 24 probably the most common comment that I receive, both 25 by mail and by phone-in and our retailers heard, was 7 1 that players didn't enjoy the three dollar prize. 2 They loved the chance to win the large jackpot, but 3 the three dollar prize in the game just never was a 4 really winning experience for our players. And so we 5 received much public comment about that, as well as 6 the other lower tier prizes. However, in order to 7 offer our players the big jackpot, we basically needed 8 to keep the prize structure as it was because most of 9 the prize pool goes to the jackpot prize. 10 We also noticed, starting about 1995, 11 that we started seeing some players leave the game. 12 And that has happened in the last couple of years, 13 too. We find that about three percent of our players 14 play, you know, every Wednesday and Saturday no matter 15 what the jackpot is. They'll play at four, seven, 16 ten. However, 70 percent of our players only play 17 when the jackpot is maybe 15 million, 20 million, 30 18 million. Every player has a certain jackpot level 19 which excites them. And Lotto players don't always 20 play when the jackpot is at four, seven, and ten. 21 However, what I need and what the 22 Lottery needs and what the players need, and probably 23 the players more than anyone, is a better way to play 24 when the jackpot was four million. Then that would 25 help increase the jackpot that much more for each 8 1 roll. So that four million dollar jackpot level is 2 very critical to us in order to bring players larger 3 prizes. 4 So, anyway, we wanted -- we experienced 5 this the last few years. We started seeing some 6 player apathy going on. And we also saw that what's 7 going on is that we're not getting -- we're not 8 growing as much. You know, we're at four, seven, and 9 ten about 61 percent of the time, especially this last 10 year. In the years before that, it's about 53 to 50 11 percent of the time we were at jackpots lower than ten 12 million. And of course, we know that multiple players 13 come in when the jackpot is greater than ten million. 14 So that's some things we are looking at. 15 And what we want to do is, how can we 16 make the jackpot grow faster? How can we have the 17 jackpot higher? How can we get all the large players 18 playing the games and making it exciting for our 19 players to play? 20 The other thing we saw was that, you 21 know, because we have Power Ball in some of our 22 neighboring states, we are losing some of our players 23 to some of those Power Ball games. So we do see them 24 go across the borders to New Mexico and Louisiana to 25 play Power Ball, who has odds of one in 80 million. 9 1 So we're proposing, in order to make 2 the game exciting for our players, to make sure that 3 all players are in the game at all times and to 4 satisfy those players who make comment about lower 5 tier prizes, we wanted to look at Lotto and see how we 6 can basically satisfy all those players' needs. 7 And so what we're proposing is this -- 8 what's going on right here is that players could 9 select six numbers out of 54. So you have it at six 10 of 50 games -- six numbers out of 54. They're only 11 selecting six numbers. Then we'd add a bonus ball 12 feature. What this means is that when we conduct our 13 drawings on Wednesday and Saturday, we would draw a 14 seventh number in addition to the six numbers. It's 15 really important to note that the player would never 16 select that seventh number. They only select six. By 17 doing the bonus ball number, by drawing that seventh 18 number in our drawing, that allows us to give our 19 players four additional prize tiers. So that means 20 that instead of having four prize tiers that they 21 currently are winning from, the three, four, five, and 22 six, they now would have four additional prize tiers. 23 And I'll go into great -- more detail in a few minutes 24 about that. 25 It also improves the odds of winning 10 1 any prize in the game. Currently in Lotto Texas, the 2 odds -- overall odds of winning is one in 57. With 3 the new Lotto Texas game, it would be one in 47. 4 The 50 percent payout. Right now on 5 Lotto Texas, for every dollar that's paid to the game, 6 50 percent goes back to players in the form of prizes. 7 It's a 50 percent payout game. That would stay the 8 same. And the other thing that would stay the same in 9 this game is that currently, our players are paying 10 one dollar for the games. They would still spend one 11 dollar. It still would cost them one dollar per play. 12 Let me go over how the game is played. 13 Like I said, the player basically doesn't -- this -- 14 the player doesn't do anything different than what 15 they do today. They go into the store. They pick six 16 numbers, just like they do today. The only change is 17 instead of picking six numbers out of 50, they're 18 picking six numbers out of 54. When we do a drawing 19 on Wednesday and Saturday, there would be 54 balls in 20 that drawing chamber. That's kind of a picture of our 21 drawing chamber there. There's 54 balls in that 22 drawing chamber. And then we would do a drawing and 23 we would pick six numbers. And I say this is your 24 ticket. Your ticket is going to stay the same. So 25 you would pick six numbers. And that would be the six 11 1 numbers you picked there. 2 And here is what would happen. We 3 would pick six numbers in from the drawing. And then 4 in addition to those -- see the blue balls? Those are 5 our first six numbers that we drew. Then out of the 6 remaining 48 balls that are in that drawing chamber, 7 because we've only selected six of them, we would pick 8 a seventh number. So in the drawing we would pick six 9 numbers, plus the seventh number. Now, the players 10 never selects that -- selects that seventh number. 11 That's -- the Lottery only does that on Wednesdays and 12 Saturdays. That's why it's truly a bonus number. 13 So let's go through a few ways you 14 could win on this. Now, if the player selected six 15 numbers and we -- they match the first six numbers 16 that came up, just like they do today, they would win 17 the jackpot prize. You don't need the bonus ball to 18 win the jackpot prize. The bonus ball only comes into 19 play on the lower tier prizes. And I think that's 20 really important for everybody to understand, is that 21 you win the jackpot just like you do today. If you 22 match all six numbers like you do today, you'd still 23 win. The bonus ball only comes into play for lower 24 tier prizes. That's why it's truly a bonus ball. 25 So here is another example. Now, if a 12 1 player matched five numbers out of the first six that 2 were selected, plus the bonus ball, they would win 3 around 10,000 dollars. It's a pari-mutuel prize. It 4 would be around 10,000 dollars. That's an additional 5 prize to the game. 6 Another example of how you could win, 7 if you just match five numbers -- like today, players 8 can match five numbers of six and win. That would 9 still stay in existence. If you match five numbers 10 out of the first six drawn, you will win around a 11 thousand dollars. Here again, it's a pari-mutuel 12 prize. 13 Now, another example is if a player 14 matched two numbers like they do -- and they don't do 15 that today. Today you need to match three numbers out 16 of six. So if you match two numbers of the first six 17 that are drawn, plus that bonus ball, this is a new 18 prize tier. You would win five dollars. 19 So let me go through -- go through all 20 of your prize tiers. On the top part of this slide, 21 that's kind of currently how the players win the game. 22 They -- by matching three, four, five, or six numbers, 23 they win. And that's kind of how it still stays with 24 this game. So if you match all six numbers out of the 25 first six that are drawn, you would win the jackpot 13 1 prize. If you match five numbers, you'd win around a 2 thousand dollars. These are pari-mutuel prizes. If 3 you match four of six numbers, the first six that are 4 drawn, you win 25 dollars pari-mutuel. However, if 5 you match three numbers like you do today out of the 6 first six that are drawn, you would win five dollars. 7 That's additional money. Currently, our players right 8 now are winning three dollars. We would -- we would 9 increase that prize tier to a five dollar prize. 10 Now, how the bonus ball comes into 11 play, if the player matches five of the first six 12 numbers drawn plus that bonus ball, they would win on 13 the average of 10,000 dollars. Brand-new money. If 14 they match four numbers of the first six that are 15 drawn plus that bonus ball that was drawn, they would 16 win 250 dollars. There again, that's a pari-mutuel 17 prize. That's an average prize. If they match three 18 numbers plus that bonus ball, they would win, on the 19 average, around 25 dollars. And if they match two 20 numbers of the first six that are drawn plus that 21 bonus ball, they will win a five dollar prize. 22 So the only prizes that are set that 23 they would be guaranteed prizes are the five dollar 24 prizes. All the other prizes are pari-mutuel prizes. 25 That means that that prize money and that -- and that 14 1 prize level would be shared amongst the winners. So 2 that's the four additional prize tiers that we would 3 be adding to the game as a result of the bonus ball. 4 So currently -- to compare the two 5 games, currently players pick six numbers out of 50. 6 We would be asking players to pick numbers out of 54. 7 And they just pick six numbers. They do not pick that 8 bonus number. The top -- the odds of winning the 9 jackpot prize today is one in 15.8 million. That 10 would increase to 25.8 million. The overall odds of 11 winning any prize in the game would be one in 57. 12 With the new game, one in 43. Today the current Lotto 13 Texas game offers players four prize tiers. With the 14 new game, we'd be offering players eight prize tiers. 15 The average lower tier prizes that we have in the 16 current game is, players can win prizes from three 17 dollars up to around 1500 dollars. With the new game, 18 players can win prizes from five dollars up to around 19 10,000 dollars. So there is more prizes -- more prize 20 money. 21 Now, the overall benefits of the 22 proposed new Lotto Texas game is that we're trying to 23 give players more chances to win a prize. We're 24 trying to put more money into lower tier prizes. 25 We're trying to increase the winners per drawing and 15 1 the winners per draw because the odds are increasing 2 or the odds are easier. It increases the average 3 winning jackpot. Instead of having the average -- 4 right now, the average winning jackpot is around 9.1 5 million. With the proposed new game changes, the 6 average winning jackpot would be 15.1 million. We 7 would hope that this game would create excitement and 8 renewed interest in Lotto Texas. And we feel that it 9 would be added value for the players because for one 10 dollar, they're getting four additional ways that they 11 can win some prizes. 12 So that's a real brief summary as to 13 what we're proposing. And I thank you for your time. 14 MS. KIPLIN: With that in mind, I'm 15 ready to begin to invite people to come to the table 16 and offer comment. As I said earlier, I'm taking them 17 in the order of the witness affirmation forms that I 18 have received them. For those of you that may have 19 come in after I made that comment, witness affirmation 20 forms are in the back of the room by the door. Please 21 fill them out. Feel free to come forward and provide 22 them to me. 23 Gerald Busald. Mr. Busald, will you 24 come forward and identify yourself on the record? 25 MR. BUSALD: Yes. My name is Gerald 16 1 Busald. I'm a mathematics professor at San Antonio 2 College. And I am president of the Texas Mathematical 3 Association of Two-Year Colleges. The Lottery 4 Commission is fairly familiar with me based on 5 previous mathematical errors that I have pointed out 6 in some of the advertising releases by the Commission. 7 The main concern I have with the 8 changes is that the Commission is proposing a change 9 that they project will increase sales, as best as I 10 can work out from the press releases, of about 64 11 percent. That's based on the ratio of 43 to 57 as the 12 probability of winning a prize at all. And that's 13 multiplied by the release from the Lottery Commission 14 which is on their Web site. And this is the news 15 alert that's been on the Web site for sometime. 16 We expect the number of winners at each 17 drawing to increase from approximately 275,000 to over 18 600,000. And that, of course, appeared in several of 19 the stories that went across the state. That 20 mathematics is totally wrong. And unfortunately, the 21 average number of winners for all 717 drawings to 22 date, the winners per drawing is 160,143. The average 23 for 1999 is 107,507. That's through drawings of last 24 Saturday. 25 My main comment, I guess, to the 17 1 Commissioners is to be very careful when they make 2 this change that they are more confident -- that they 3 are confident -- more confident that there is going to 4 be an increase in sales than they are in the data that 5 has been used to argue for this change. 6 And so I guess I wanted to go on record 7 as pointing out the error in the stories that have 8 been going statewide about the number of winners per 9 drawing. It is inaccurate. It's on the Web site at 10 www.txlotter.org. News alerts. It probably will not 11 be there very long, I suspect. 12 The other thing to consider is, by 13 lowering the number -- by increasing the number of 14 smaller prize winners, what we actually do is increase 15 the number of people who lose in the long run. The 16 only people who really come out ahead in Lotto or any 17 of the other games is someone who wins a large prize. 18 People who win small prizes are losers in the long 19 run. And so I think it's important not to necessarily 20 try and pump up the low end at the expense of the high 21 end. At least some people get ahead. And fewer 22 people will get ahead in the long run with these 23 changes. 24 MS. UDALL: Thank you. 25 MS. KIPLIN: Thank you. Questions? 18 1 MS. UDALL: Yeah. We have one 2 question. 3 Mr. Busald, thank you for bringing that 4 comment to the board. I do have a question, though, 5 however, that what you have said is correct as far as 6 the -- increasing the one of 57 to one of 43 as a 25 7 percent increase. Now, if you knew that, for 8 instance, we were basing that sales projection, not on 9 that -- that was one part of the sales increase, but 10 on the increased jackpot prize -- 11 MR. BUSALD: Right. I was aware of 12 that. 13 MS. UDALL: So we have -- 14 MR. BUSALD: Right. 15 MS. KIPLIN: Excuse me. Just for 16 housekeeping, we can only get one voice at a time. 17 And I'm sorry. But if you will ask your question and 18 then if you will answer it, I'd really appreciate it. 19 We want to get a clean record. Thanks. 20 MS. UDALL: So, for instance, I need to 21 kind of give you some background on how we did the 22 sales projection numbers so that you would -- so 23 everybody in the room understands how we did that. 24 We were looking at if our sales 25 increased from 9.1 million up to 15 -- if we had the 19 1 average winning jackpot of nine -- today is 9.1, maybe 2 15.1. And that's where the sales increase came from. 3 So we were looking at today, our sales are about 711 4 million. That would increase to about 790 million, if 5 we would -- we had the players coming at the higher 6 jackpot levels. And that's where you see the number 7 of winners. That was based on a projection of 8 sales -- of sales increased based on people playing 9 the higher jackpot levels, not on the 25 percent 10 increase in the overall odds. So that's where we 11 got -- if you looked at that number, that 279 versus 12 600,000, that's based on increasing sales from 711 13 million to 790 million. And that's what that's based 14 on. 15 MS. KIPLIN: So based on the 16 information that Ms. Udall is providing, does that 17 change your comments? Or do your comments remain the 18 same? 19 MR. BUSALD: No. The -- those figures 20 as published per drawing are totally inaccurate. That 21 doesn't change. I did take into account -- I realize 22 that you are projecting a sales increase. Otherwise, 23 we wouldn't be doing that. And the public record or 24 the official document projects an increase to the 25 State of 20 million dollars for this change, which 20 1 means basically an increase in sales of 40 million 2 dollars annually. And if that is the case, I suspect 3 the decision is pretty well made already. However, 4 it's very difficult to project what players are going 5 to do in this situation, as you're well aware. But 6 the comment still stands that what has been put out as 7 far as the number of winners is incorrect. 8 MS. UDALL: We will definitely visit 9 that. 10 MS. KIPLIN: Okay. Well, thank you for 11 your comments. The one thing I would like to say is 12 that no decision has been made. We are simply in the 13 public comment period to receive comment, those that 14 support the changes and those that are opposed to the 15 changes. And then the -- all the comments will be 16 considered at the time that this -- the proposed 17 amendments are ripe for consideration by the 18 three-member Commission for action. And as I said 19 previously, that action is a -- is a whole host of 20 options. But Mr. Busald, thank you very much for 21 taking the time to come from San Antonio and provide 22 the comments. They are very helpful to us. 23 Cheryl Johnson. Ms. Johnson, if you'll 24 come forward. 25 MS. JOHNSON: I'm Cheryl Johnson. I'm 21 1 from Carrollton, Texas. And I have talked at length 2 with various parties at the Lottery office and have 3 been treated very kindly, I feel, in the process. 4 I do feel very strongly that perhaps 5 this is going in the wrong direction. My comment 6 would not include the kind of mathematical statistical 7 data that my previous -- the previous speaker gave. 8 Mine is very subjective. 9 I have played the Lottery. My husband 10 and I have played since the day that they first 11 started the Lottery almost seven years ago. We 12 watched them drop the balls one by one, 1 through 50, 13 with latex gloves or whatever to keep from 14 contaminating it. They were very -- they took very 15 extraordinary, maybe, perhaps, precautions to make 16 sure that the game was played well. Over the years we 17 have, in fact, watched a number of times the Lottery 18 has -- well, quite a few times the Lottery has been 19 one of the top five in the nation repeatedly. So it's 20 done quite well with the way it is now, one of 50. 21 I don't see a tremendous need to change 22 the Lottery. I can understand that they want to 23 increase sales of 25 to 30 percent. But I feel like 24 perhaps maybe this is going the wrong direction to 25 achieve that goal. 22 1 One of the reasons I feel like this is 2 because when they are picking -- I understand that 3 they don't have to have the bonus ball at the top 4 tier, at the eighth tier, and that it's for lower tier 5 prizes. But many people are going to see through it 6 really quickly that when you have starting out 7 increase the number of balls, 54 balls, that in itself 8 makes it much more difficult. But the other thing is, 9 when they come in with a seventh ball for the lower 10 tier prizes, all of the lower tier prizes require to 11 get the -- the larger amounts require that you get 12 that seventh ball. 13 And what happens with that seventh ball 14 is that you're not playing equal. When you pick six 15 balls out of 50, okay, your average is about one in 16 ten of hitting it. But when you take out all those 17 six balls and you're picking one ball out of 48, it's 18 much, much more difficult to hit. Six times more 19 difficult to hit that ball, on the average. So people 20 are going to see through it. If I see through it -- 21 I'm not any smarter than anybody else. Other people 22 see through the game. And they will quickly become 23 disillusioned with the game, I predict. And you know, 24 I think it would bring down the other game, as well. 25 But as a safety net, I feel like the 23 1 least we could do because, it is such an iffy type 2 situation, is to keep the six of 50 game the way it is 3 because it is iffy. 4 Perhaps if we want to delete the Texas 5 Millions game or some other game that -- I know Cash 6 Five is doing quite well. But perhaps another game. 7 If you feel like you're getting too many games, 8 on-line games, to play, perhaps delete one that's not 9 as popular and keep the six of 50 game would make a 10 lot of sense to me. But as I said, I think that 11 possibly the sales are not going to be as high as we 12 want to think they are based on the fact that it's 13 going to be very, very difficult to get the bonus 14 ball. 15 What I'm thinking is, if -- and I feel 16 like very strongly that Texas is a big enough state -- 17 it's as big as four or five other states 18 population-wise, geographically-wise, and every other 19 way. It's a very large state that you could easily 20 divide into four smaller states. And so the populus 21 is there that I feel like if we wanted to have a Power 22 Ball game and keep the six of 50 game the way that it 23 is now, and rather than have, as you said yourself, 24 other -- people are leaving Texas to go to Louisiana 25 and neighboring states to play the Power Ball. That's 24 1 not going to change. If your system is put in place, 2 people are still going to leave the state for the 3 Power Ball. 4 And so I'm saying if we go ahead and 5 have the power bonus ball, whatever you want to call 6 it, at all eight levels rather than seven, rather than 7 stopping at the top, and keep the Lotto Texas the way 8 it is with six of 50 numbers that we're used to 9 playing, that would give -- that would touch on all 10 territories. That would give people the option. If 11 they want to play Power Ball, they can play it. And 12 God only knows how high it could get. It could get to 13 150, 350 million with this many people in the state. 14 There is over 15 million people in the state of Texas. 15 It could get high. And people that do not want this 16 kind of activity could go back and play the six of 50. 17 But I feel like if you're going to do 18 it, why stop at just seven tiers? Because the guy 19 that gets the -- say he picks number 48 or whatever 20 the seventh bonus ball number is. He's going to feel 21 like he should be getting a lot more money. Plus, the 22 guy that gets the lower tier, you know, hits four plus 23 the bonus ball, the odds are very great, as I said, of 24 hitting that bonus ball. It's not in line with the 25 rest of the balls. 25 1 Like if you have six balls into 50 2 balls, then the average is a little over eight or 3 whatever, one chance of eight. But then if you come 4 back again and you play your seventh bonus ball and 5 you have 48 balls in there and you have picked one 6 ball out of 48, the odds are tremendous there that you 7 won't hit it. 8 So I'm saying if we're going to do -- 9 if we're going to have a Power Ball game in Texas, 10 let's -- for Pete's sake, let's have a Power Ball game 11 in Texas. Let's go all eight tiers and do it right 12 rather than have these people continue to leave to 13 Louisiana or Arizona or wherever else they're having a 14 Power Ball game. 15 And, plus, I have to think that you're 16 going to want to -- if Texas gets in on the Power Ball 17 thing itself -- and I don't mean to be too talky here. 18 I'm saying if we do it ourselves rather than join 19 somebody else's Power Ball game, we will be keeping 20 that money in the State of Texas, which I, as a former 21 schoolteacher, would love to see happen. 22 And that's the other thing. I would 23 like to see teachers in the State of Texas receive 24 more money than they are. We're right on the bottom 25 tier in pay for Texas. So if any -- in God's name, if 26 1 any way that this could happen, if it's a Power Ball 2 game or whatever that would make it happen for the 3 State, I'm all for a windfall for this state. That's 4 about all I have to say. 5 MS. KIPLIN: So just so I understand 6 your comment, you're -- in essence, you're saying, 7 leave the Lotto Texas game exactly the way it is, six 8 of 50. And if we want to do something with the bonus 9 ball, look to have Power Ball -- 10 MS. JOHNSON: Have it all the way. 11 MS. KIPLIN: Is your -- is your 12 comment, join with other states in the existing Power 13 Ball game or to have a Power Ball game structure, but 14 limit it to play only in Texas and have Texas conduct 15 the Power Ball game? 16 MS. JOHNSON: I would like to try first 17 to have Texas -- have it within Texas because we're 18 certainly going to have plenty of action. If it gets 19 to 150, 250 million, which it does sometimes, then 20 you're going to have plenty of action coming in from 21 other states. They're going to want to cross the 22 border from Oklahoma, Louisiana, Arkansas, Colorado, 23 New Mexico, even Arizona and Nevada probably, will 24 come to Texas. And I feel like if we can get the 25 money, rather than just pay to join another Power Ball 27 1 group or whatever, then we would be keeping the money 2 in Texas. 3 And I would like to see this used as a 4 windfall for the Texas educational system and to 5 promote Texas pay raises for schoolteachers, is where 6 I'm coming from, having been a former schoolteacher 7 myself. And I don't think you'll have very many Texas 8 teachers that would say, hey, don't try it and see 9 what happens. 10 So I mean, that's just my feeling as 11 across the state -- and I think it would be exciting. 12 Having played the game of Lotto for seven years, my 13 husband and I, we say we'd rather use that than a 14 psychiatrist. Cheaper than that. But the thing is, I 15 would love to see it. 16 And I think -- I think it would be a 17 wonderful experience for Texas. I really do. And I 18 was proud that Pam came up with this idea or whoever 19 did -- or we discussed it. Let's put it that way. 20 But I think it's a wonderful idea. I think it's long 21 overdue. But I do think it would be a drastic mistake 22 to stop with just the seven tiers and not go as far as 23 we can carry it because long and the short, if we were 24 to have -- duplicate sort of what we have now, six of 25 50 numbers or six of 49, whatever you wanted to do, 28 1 close to that amount, I am against making it more 2 difficult. I think six of 49, six of 50 is plenty 3 because in and of itself, if you put an eighth tier up 4 there, like I said, the odds -- you're picking one 5 number, you know. If you just had one number of even 6 ten, that would -- that would cut a lot of people out. 7 It's very difficult to hit on six of six -- you know, 8 six of six numbers out of 50 -- out of a field of 50. 9 Right now, it's extremely difficult to do that. You 10 rarely have over two winners now. 11 But if you were to add the Power Ball 12 feature to that, it would make it increasingly 13 difficult. You wouldn't have to have very much -- 14 that's the only change you would have to have, would 15 be add that. And I would not make it out of a field 16 of 50 numbers. I would make it 30. I would make it 17 20. I would make it about a field of ten for a super 18 jackpot. And I think -- I think you would see a lot 19 more action in the Lottery. This is my opinion. You 20 wouldn't have to change the game drastically. You 21 wouldn't have to make it 54 numbers. You wouldn't 22 have to make the bonus ball a 48 left. It doesn't 23 have to be that difficult. And more people would come 24 in on it and play on the lower tier tiers, if it were 25 a lot easier to get that bonus ball than out of 48 29 1 numbers. That's very difficult to get. That's my 2 feeling. 3 I would like to see it all the way 4 up -- carried through where you have just like it is 5 now, six of 50 and then have a bonus ball -- a 6 separate machine coming in with just one number picked 7 out of ten. It would be in line with the rest of the 8 numbers where you're picking six numbers out of 50. 9 One out of eight, possibly. 10 So did you have any other questions for 11 me? 12 MS. KIPLIN: No, I didn't. 13 MS. JOHNSON: Okay. 14 MS. KIPLIN: Thank you very much for 15 your comments. 16 MS. JOHNSON: I feel very strongly 17 about this. By the way, I came from Dallas because I 18 feel very strongly. And I've talked to numerous 19 people, and they feel like the same way. It's very 20 difficult to get one number out of almost 48 or 50. 21 MS. KIPLIN: Well, we appreciate your 22 comments, as well as anybody else who wants to provide 23 comments, either orally or in writing. That is the 24 function of the rule making, to elicit comment from 25 the public. So we appreciate you taking the time to 30 1 come down from Dallas today. 2 MS. JOHNSON: I do have one other 3 comment I would like -- I'm sorry. I didn't mean to 4 interrupt you. 5 MS. KIPLIN: That's fine. 6 MS. JOHNSON: As far as -- I came up 7 with an idea in talking with several people, 8 especially with my husband, that could be used. There 9 is always the complaint of, well, we have trouble 10 getting people to buy a ticket when it's only four, 11 ten, 12 million. Okay. 12 One idea that I would like to put 13 forward to you, if the Lottery Commission could hear 14 me now, is the possibility of perhaps like a 15 scratch-off ticket where you could buy a scratch-off 16 ticket that would be sort of like a grocery store's 17 turkey bucks or something where they give away -- 18 where you buy the ticket for the -- or the scratch-off 19 ticket, whatever, with like 20 drawings on it. And 20 you would get a reduced price on the amount of that 21 ticket, if you buy en masse like that. 22 For example, the Lottery Commission has 23 not gone up on the price of the Lotto ticket. In 24 seven years, it's stayed one dollar. What I would 25 propose for the Lottery Commission, too, is that they 31 1 investigate the possibility of lowering the price of 2 the ticket if they buy in a scratch-off pattern or 3 format of like 20 drawings at a time, if they pay for 4 all those 20 drawings ahead. 5 On weeks when the Lotto was less than, 6 say, ten million or 15 million, whatever figure they 7 want to come up with, whatever the breaking point, as 8 you said, was, that most people won't play until it's 9 15 million or whatever, if you would consider 10 something like that, lowering the price of the ticket, 11 perhaps raising the price of the ticket further down 12 the line. As you said, that most people will buy a 13 ticket when it's up to 40, 50 million. Perhaps they 14 would pay a dollar and quarter, say, for a ticket when 15 it -- when the jackpot was 50 million. And they are 16 reluctant to pay a dollar or whatever when it's four 17 million. 18 So perhaps the time is right, along 19 with the Power Ball, to think about adjusting the pay 20 structure for a ticket where they are not all one 21 dollar. And that's my feeling on that, is that I can 22 see in my head where if they -- if they only paid -- 23 some states, they only pay 50 cents for a Lotto 24 ticket. If, for example, they only paid 75 cents for 25 a Lotto ticket when it was four million or ten million 32 1 or 12 million, whatever, under 15 million. That's my 2 feeling, that if they were to buy -- also, another 3 thing, if they were to buy in drawings in a -- like a 4 scratch-off ticket format where there was 20 drawings 5 there, it would alleviate a lot of lines they have for 6 people buying tickets. Where if all they had to do 7 was -- the retailer would just initial or scratch off 8 or whatever each drawing as they come through the 9 line, there wouldn't have to be an exchange of money. 10 I myself have waited in a line of 30 or 11 40 people when, you know, if they had had just a 12 scratch-off, they wouldn't have to exchange dollar for 13 dollar change made from a 30 -- 20 dollar bill or 14 whatever for a Lotto ticket. So that would speed it 15 up and would definitely encourage more people, I 16 think, to play if they didn't have to wait in a long 17 line. 18 So -- and another thing I'd like to 19 say, too, real quickly is that I am against the time 20 of day that you picked for the hearing. I know you 21 did it at your convenience. I feel like a lot more 22 people -- excuse me -- a lot more people would have 23 probably shown had it been, perhaps, on a weekend or 24 after 5:00 o'clock in the evening. This definitely is 25 a detrimental time. It's a very bad time. At 10:00 33 1 o'clock on a Monday morning, most people have to be at 2 work. And very few people from Dallas, of course, are 3 willing to come down. But I understand you're having 4 it in the Dallas area. But still, I would like to see 5 it at a time where it would be more convenient for the 6 public to express their feelings on the matter. 7 That's all I have. 8 MS. KIPLIN: Thank you for your 9 comments. Of course, we are accepting oral and 10 written comment. And we are, as you mentioned, going 11 into other cities. So, hopefully, people who didn't 12 want to travel to Austin today will come to the areas 13 that are more convenient for them. But thank you very 14 much for your comments. 15 MS. JOHNSON: Thank you. 16 MS. KIPLIN: Mr. Moore. 17 MR. MOORE: My name is Frank Moore. 18 And I have been working on something for the Lottery 19 for about two years. And during that time, I have 20 made a lot of comments. I've written a lot of 21 letters. And I've accumulated a lot of data. And 22 I've got a written comment which I'm going to 23 introduce into the -- into the record. And I have 24 some copies if the press wants any of them. 25 MS. KIPLIN: You provided me one 34 1 earlier. I'd appreciate it if you would provide the 2 court reporter one at the end of your testimony. That 3 would be very helpful. 4 MR. MOORE: All right. I can -- I'm 5 going to just thumb through here and make a few 6 comments. 7 First of all, I understand your 8 problem. You have a problem. The Lottery as it 9 exists today is a failure. It has been failing for 10 about two or -- well, about five years, as you said. 11 It is going down. 12 And on this article I have, I have 13 some -- I have referenced some documents. And I have 14 those at the back of the page. For example, on a four 15 million dollar Lottery in 1995, we sold about 16 7,000,385 tickets. In June 23 of this year, we sold 17 three -- we sold less than four million tickets on the 18 Lottery. Back in our second jackpot back in '95 was 19 about ten million dollars. It was 11 million dollars. 20 And we sold nine million tickets. Today on our second 21 jackpot, it's seven million dollars. Back in '95 22 selling on a third jackpot of 18 million, we sold 11 23 million tickets. 24 Now, Pam there had said something about 25 the jackpots were going to be about 15 million. Well, 35 1 today, even after one, two, three, four -- after five 2 jackpots, we're only selling 6,000,631 tickets. 3 People have quit playing the Lottery because they are 4 tired of it. They are tired of it because they don't 5 get a chance to win. 6 If you look at the -- if you look at 7 the data at the back, you will find out from surveys 8 that the Lottery Commission has made that about 46 9 percent of the people have quit paying the -- playing 10 the Lotto because of the high odds. 11 Now, as it is today, it's one in 15 12 million. You're going to make it one in 25. If 46 13 percent have failed or quit playing because the high 14 odds, you're just -- you've got a boat that's sinking. 15 And you're loading it with rocks. It's going to go -- 16 it's going to go down faster than what it did. 17 And I won't go into some other things 18 on the paper. But I have a -- I've been working on 19 trying to sell the State of Texas a game, as counsel 20 knows. We've corresponded back and forth several 21 times. And I understand that you get your games from 22 your vendors. Well, GTECH probably did the original 23 one. GTECH probably did this one. GTECH has a 24 stranglehold. I don't know whether that's by contract 25 or by preference, but there is other solutions out 36 1 there. 2 I don't think that the Lottery at the 3 present condition will survive. I think it will die 4 faster under what you're fixing to do. 5 Have you ever watched somebody buy a 6 Lottery ticket? You walk in and they pay their money 7 out. And I see old ladies come in. So the last two 8 or three years, I've made a habit of watching people 9 buy tickets. They come in and they buy their tickets. 10 They take their scratch tickets. Maybe the lady in 11 the Lincoln goes outside and scratches. Or it may be 12 the cowboy on the pickup. They like the scratch 13 ticket. They buy five scratch tickets. If they don't 14 win, they've got that horribly disappointed look on 15 their face. If they do win, yeah, how wonderful. 16 It's something positive. 17 And every time -- if you remember what 18 George Patton -- what George Scott said on Patton. 19 Americans love a winner. And they don't like a loser. 20 And every time somebody loses, it's negative. And 21 every time they win, it's positive. I'm a winner. I 22 won. People are not winning enough. And the game as 23 it's designed, as you have designed and used today, 24 are not making enough winners. 25 And eventually, somebody is going to 37 1 solve your problem. The Legislature meets in about 14 2 months. And if you don't find a solution for it, they 3 probably will. And as you very well know, there are a 4 lot of people in the Legislature who don't like the 5 Lottery. And this is going to give them a lot of 6 information. 7 By calling this public meeting today, 8 you have told the public, we have a problem. The 9 public knows you have a problem. If confidence was 10 low before, it's even lower tier now. And if you make 11 this change, it's just going to go even further down. 12 I don't know how you're going to solve your problem. 13 But what you're doing, I don't think will work. 14 That's all I have. 15 MS. KIPLIN: Thank you for your 16 comments. 17 MR. MOORE: And I will give the court 18 reporter a copy of this. 19 MS. KIPLIN: Mr. Moore, would you mind 20 providing us a couple more for our working purposes? 21 MR. MOORE: Sure. There's one for you. 22 MS. KIPLIN: Thank you, sir. 23 Ms. Nettles. Dawn Nettles. Good 24 morning. 25 MS. NETTLES: Good morning, Ms. Kiplin 38 1 and Pam. My name is Dawn Nettles. And I am publisher 2 of the Lotto Report out of the Dallas area. 3 When I made arrangements to come here, 4 I thought that the commissioners were going to be 5 present today. So I kind of had something else geared 6 in the way of speaking. 7 You said when we started to speak to 8 please let you know if we represent other people. 9 Legally, no, I do not represent other people. But as 10 you-all well know, I have been on a journey to collect 11 petitions, e-mails, letters, and the such. And I am 12 going to present those to you today. Plus, I have 13 packages for each commissioner with what we have. 14 I am here first and foremost as a Lotto 15 player myself. I play the Lotto. I love the Lotto. 16 And I've played it since it began. I am here secondly 17 because I am a business owner who makes my living with 18 your Lotto players. 19 You gave us a game in 1992 that 20 consisted of four payouts and 50 numbers. At that 21 time, most states offered 49 numbers, not 50. We 22 played it. We've backed you. We gave you tons of 23 money. It was a tremendous success. But it's 24 gambling. And it is something that was eventually -- 25 your sales had to fall to a level because people would 39 1 lose. And they would either quit or they would cut 2 their expenses to continue to play. That is just a 3 natural process. 4 For those of us who have continued to 5 play, for the nonbelievers, people say to you, well, 6 you know, you can't win the Lotto. It's like your 7 chances of getting hit by lightning are better than 8 winning the Lotto. 9 Your chances right now, to give you an 10 example of what's being said, is, to date, there have 11 been 717 drawings. On an average of four million 12 tickets per drawing that have probably been sold - and 13 I believe that's a conservative number - you have sold 14 at least two million -- 2,000,860,000 tickets. Out of 15 those two billion, 800 tickets, you have had to date 16 373 winning tickets. Those are six of six winning 17 tickets. I would venture to say that out of those 2.8 18 billion tickets sold, that not one single solitary 19 person purchased a Lotto ticket in hopes of winning 20 three dollars, five dollars, 25 dollars, 100, 1,000, 21 1500, or 10,000. We have all bought Lotto tickets in 22 hopes of winning. Now, those are on odds of one in 15 23 million. 24 Your Lotto was doing real, real well. 25 You came forth then with the Cash Five twice a week 40 1 for Tuesdays and Fridays. The Cash Five was a 2 tremendous success. I fought it because I didn't want 3 to have to track it. But it was a neat game, and I 4 really liked it. 5 When you started your Cash Five on 6 October the 13th of '95, your Lotto jackpots were 7 ranging from four million to ten million to 17 million 8 to 23 million. That's how they grew at that time. 9 And I have documentation here of those -- of those 10 numbers. 11 Then the week after the Cash Five 12 began, your Lotto jackpots dropped from four to ten to 13 16 to 21. Then the next succession, they dropped 14 further from four million to nine million to 14 15 million to 19 million and finally to 25 million. 16 The point to that is, that should show 17 you that the money that you are already collecting in 18 your sales was all that we had to give you. We 19 weren't to give you anymore. 20 Then in -- let's see. I believe it was 21 November of '96 is when your sales have come down. 22 Interest rates fail. And your Lotto jackpots were 23 hurting. 24 So then came the idea, gee, we're going 25 to have Cash Five four times a week. Your sales 41 1 didn't increase. You were having 300,000 dollar 2 jackpots on the Cash Five, two to 300,000. All that 3 happened was, the people spent the same amount of 4 money, but the jackpots were divided now by four for 5 the four drawings. You didn't really increase. 6 So then we come again to 1998, May the 7 28th of '98. And our sales have begun to fall even 8 more. So we come out with Texas Million. The Texas 9 Million game -- the day of the Texas Million, the 10 procession of the jackpot growth for the Lotto was 11 four million. It had fallen all the way to four 12 million, seven million, 11 million, 16 million, 25 13 million, 32, and then 45 million. The week after or 14 the next procession after the Texas Million game, they 15 again fell. 16 And again, that told you that people of 17 Texas only have so much money to spend. You can give 18 us a thousand games if you want, but that's not going 19 to increase our pocketbooks. We will have to divide 20 them amongst whatever it is that we wish to play. 21 You're not going to get more money from us. 22 When you go to Las Vegas, I carry 23 whatever. I'm broke now, so I don't carry any. But 24 we carry 500 dollars, a thousand dollars, and you say, 25 when I get there, when I lose this, that's it. You 42 1 may spend it on ten different games or you may go dump 2 it all on the crap table or you may go dump it in the 3 slot machine. But whatever you play, that's all you 4 have. And that's all you're going to get. In the 5 Texas Lottery, if you-all could recognize that, we 6 would all be a whole lot better off. 7 Now, your sales are down again. And 8 you have to find a solution to it. So you've got to 9 increase sales. So you tell us right now, hey, we 10 don't want to lower tier our beginning jackpot to 11 three million dollars because the people of Texas 12 won't appreciate that. So what we want to do is, 13 we've got to increase our sales and get that back up 14 so we don't -- so we're not hurt by the interest rates 15 so we can make a go of it. So we're going to offer 16 our players eight ways to win. 17 Which we don't want the eight ways to 18 win. Okay? We don't want you to change our -- our 19 Lotto. You're trying to add four balls. And I don't 20 care if you're trying to pick three numbers or you're 21 trying to pick four numbers or you're trying to pick 22 five or you're trying to pick six. You are now having 23 to choose out of 54 balls. And that's much more 24 difficult. 25 I have been on a mission to collect 43 1 signatures for you. And I have here packages. I have 2 1,015 e-mails, all negative -- letters to e-mails, all 3 of which the people have said no. In addition, I have 4 1,473 signed petitions. 5 The Lottery -- as I understood, you had 6 300, but Lucy told me she had 850 pages. So I don't 7 really know how many you have. I asked you-all for 8 how many numbers it would require for you-all to 9 squash this so as to not wipe away our game. And no 10 one would answer me. So I again ask you, how many 11 numbers, how many people do you have to have to put a 12 halt to this? 13 And then I want to address how come it 14 is that New York and California both added balls to 15 their Lotto and were forced to reduce the number of 16 balls and Florida only picks for six in 49. Why 17 has -- why are we not considering the failure that the 18 other states have encountered? Don't change the 19 Lotto. Leave it alone. 20 On the Web site, y'all know -- I know 21 you're monitoring my Web site. And I cover everything 22 that you have addressed here, such as your little 23 petition, your slide show here, you covered the -- 24 that we are now -- in the proposed new Lotto game, you 25 covered the payouts. You failed to say that you 44 1 reduced the four of six, that now, instead of getting 2 between 90 and 120, we're only going to get 25 3 dollars. And you failed to say that for five of six, 4 where we're accustomed to getting 1500, 2,000, 5 sometimes 1300 -- here a couple of weeks ago, it was 6 3,000 dollars for picking five out of six numbers. 7 You have shortened that to a thousand. 8 You know that you're going to increase 9 your sales because you're not going to have any 10 winners. And that's how you can be assured that you 11 won't have to lower tier the beginning jackpot to 12 three million dollars, is because you know there is 13 going to be no sales -- no winners. 14 Unlike the gentleman who commented 15 about your numbers -- now, I don't agree with your 16 numbers, either. They don't make sense. 17 I asked you-all how many combinations 18 there were in making one out of 54. I have a fax here 19 from y'all where you say you don't have that 20 information, you don't know, but you can tell me the 21 odds. Well, I don't care what the odds are. I want 22 to know how many combinations there are. Now, I 23 technically have that information on my Web site. 24 On behalf of the people, I do have all 25 of the original petitions. I have e-mails and 45 1 letters. I have other letters that I didn't make 2 copies of that came by fax or by mail to me. And out 3 of -- there is roughly 2500 people behind me right now 4 that are saying to you, please do not change our 5 Lotto. 6 Cut the Cash Five back to twice a week. 7 Get rid of Texas Million. Why you keep on playing the 8 Texas Million, I don't know. It's a loser. If you'd 9 just admit it, the people will forgive you and go on 10 with it. And that's all I have to say. Thank you 11 very much. 12 MS. UDALL: Thank you. 13 MS. KIPLIN: Thank you for your 14 comments. If you would be kind enough to provide the 15 petitions that you are referencing and whatever 16 materials you have to the court reporter, then we'll 17 attach those as an exhibit to the transcript so that 18 they can be made a part of the rule making file. 19 MS. NETTLES: Okay. What I have here 20 are four envelopes. I have one for Ms. Cloud. I have 21 one for each of the three commissioners. Okay. So 22 how about if I just officially give you Ms. Cloud's 23 envelope? Okay. And I have 800-and-some-odd e-mails 24 that I did not print out because I gave the people an 25 option of just sending me a blank e-mail and in the 46 1 subject matter putting, I'm opposed to this. And I 2 started doing blanks. And then I thought, this is 3 ridiculous. I'm not going to do that many pages. 4 So you're going to have to take my word 5 for it that I have them. But here are your letters. 6 And I have the originals. Here is the statement of 7 the originals that I will produce the originals. I 8 did a copy and paste on my Web site to keep me from 9 having to do all those copies. 10 MS. KIPLIN: That's fine. We'll take 11 the copies as best evidence at this point. Thank you 12 very much. 13 At this point, I have no other witness 14 affirmation sheets for somebody who wishes to provide 15 comment. Is there anybody who wishes to come forward 16 and provide comment on the record? Anybody? 17 If not, we'll adjourn the hearing. 18 Thank you very much for taking the time to come today 19 and provide comment on the record. Your comment will 20 be considered and will be part of the formal rule 21 making file. Thank you. 22 23 (ADJOURNED) 24 25 47 1 REPORTER'S CERTIFICATE 2 3 STATE OF TEXAS ) 4 ) 5 COUNTY OF TRAVIS ) 6 I, CATHERINE A. HEINE, Certified 7 Court Reporter for the State of Texas, do hereby 8 certify that the above-captioned matter came on for 9 hearing before the TEXAS LOTTERY COMMISSION as 10 hereinafter set out, that I did, in shorthand, report 11 said 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 WITNESS MY HAND this the 3RD day of 16 OCTOBER, 1998. 17 18 ___________________________________ CATHERINE A. HEINE, CSR No. 2809 19 Certified Court Reporter For the State of Texas 20 Expiration Date: 12-31-99 21 Wright, Watson & Associates 1609 Shoal Creek Boulevard, Suite 202 22 Austin, Texas 78701 (512) 474-4363 23 JOB NO. 990927CAH 24 25