- All or Nothing -
Am I Reading This Right?
Is Texas Lottery Director Gary Grief Bragging
That His Staff Gave Birth To All or Nothing?
Plus, More About That Liability Problem ...
brought to you by
Originally Posted: June 8, 2013
Related Stories - All or Nothing
Texas Lottery's Press Release Regarding Suspending Sales, Click here
Houston Chronicle Reports Contradicting Statements by Gary Grief, Click here
Editorial and Opinions by
On June 3, 2013, the Texas Lottery unexpectedly suspended sales
for All or Nothing. Late on June 3, the TLC issued a press release
that I posted and commented on.
On June 5, the Houston Chronicle ran a story that I also
posted and I added an editorial giving you additional information.
I was hoping I could answer all your question with this one posting!
Now I want to share a little bit more with you -
believe you will find my various comments of interest.
Also, I'll explain exactly why the Texas Lottery says
there is a "liability" issue with the game. It is my opinion
that they CLEARLY had a liability problem from the very
beginning but it appears NO ONE - but me - recognized it.
I can say this because they've continued playing a game where
there were definite signs of potential colossal losses to the
state and it was completely ignored (overlooked) until now.
SAD but TRUE ... Now read on so you can
understand what I'm saying ...
Is Gary Grief Saying His Staff Gave Birth to All or Nothing?
Gary Grief Says ....
Now I don't know about you, but this sure sounds
Whoa - Wait a Minute ... Look
A Google Search Clearly Shows
And good ole Lottery Post
Well - as you can see, I regret to inform you that the
In Ireland, it was played once per day and
Why didn't staff tell the Commissioners
Why didn't the Commissioners question a
You should read staffs presentation (at bottom of this page)
About the highly publicized "liability" that the
I did not waste my time commenting when the Texas Lottery
I have no doubts that had I told them about the "deficit" -
I felt strongly this was an extremely HIGH risk liability for the
It appears the Texas Lottery foolishly
You should read Gary Grief testimony
Just call this excerpt Confusing ...
Excerpt - Robert Triloni Testimony
MR. TRILONI: .... All told, the daily games are up just over
Confusing huh??? Let's see - which is best --
I'll say one thing about the Texas Lottery, the way
- IN CONCLUSION -
Now do me a favor, read the transcripts below.
Do understand, what's happened is really a BIG deal
Transcripts From Texas Lottery Commission Meetings
Gary Grief's Report During the
AGENDA ITEM NO. IX
CHAIRMAN WILLIAMSON: Our next item, then, is report by the Executive Director and/or possible discussion and/or action on the agency's operational status, agency procedures, awards, and FTE status. Gary, this is your item. But before we do that, our new hopefully soon-to-be-confirmed commissioner, Veronica Edwards, has joined us in the audience today. She's right there. I want everybody to see who she is. And thank you for coming in today.
MS. EDWARDS: Thank you.
CHAIRMAN WILLIAMSON: All right. Sorry about that. Gary, go ahead.
MR. GRIEF: Certainly. Commissioners, as you know, I attend a number of conferences and meetings around the country each year, all related to the lottery industry and focused on developing ideas and concepts on how increased revenue can be achieved, not just for Texas but for all 44 lottery jurisdictions that have lotteries. I want to recap for you some special events and some discussions that have occurred at the last two conferences that I attended.
The first conference I want to touch on is the Smart-Tech conference which was hosted by Public Gaming Research Institute. This conference was held in New York the week of April the 8th. During this conference, I served on a panel representing the Mega Millions game. The subject of this particular panel was to discuss the near and long-term futures of both the Mega Millions and the Powerball games. And as the lead director for the Mega Millions consortium, I was able to share my vision with the attendees for some ideas for potentially changes to that particular game. With California having joined the Powerball game in April, just last April, and with Florida set to come on board with Mega Millions in just a couple of weeks, both of these games, Powerball and Mega Millions, will now include every single lottery jurisdiction in the United States that has a lottery. This opens up some very interesting possibilities for us to explore some truly national marketing initiatives.
But the highlight of the conference at the meeting in New York was the very last panel that participated in that conference. Several states in the lottery industry -- and you've heard me talk about this before -- including Illinois, Indiana, Pennsylvania, New Jersey -- are in various stages of privatization. And there are several other states who are starting to have discussions about that as well. Texas has been the true pioneer in the public/private partnership model for the lottery industry, with us having contracted out a wide variety of services to GTECH, our lottery operator since the Texas Lottery started back in 1992.
So for this particular session at this conference, I worked with our conference director to try to develop a subject matter that could be discussed that was narrowly focused on the issue of outsourcing in the lottery industry. And I narrowed that focus to the outsourcing of the sales force. GTECH has provided the sales force for us here in Texas since Day One, and this arrangement by any measure has been very successful.
So serving as the moderator for this panel, I hosted a group that consisted of our very own Michael Anger, our Lottery Operations Director; Robert Tirloni, who you just heard a moment ago, is our Products and Drawings Manager; as well as Joe Lapinski, our Account Development Manager for GTECH Texas; and Tom Stanek, our Senior Director for Sales And marketing for GTECH Texas.
Now, Commissioners, I'm obviously very biased, but I thought that this panel gave the best and most beneficial presentation of the entire conference. It really brought some balance and some real world experience to all of this talk about privatization that's been popping up all over the country. Since it was the very last session of that conference, it was difficult for me to gauge the reaction of the audience immediately following the presentation.
Now I want to fast-forward to just last week where I attended the LaFleur's conference in Washington, D.C. At the very beginning of this conference, I was approached by many of my colleagues from around the country and actually around the world. Several of them wanted to come up and tell me that they thought that that particular panel with those gentlemen that I named was the best panel they saw at the previous conference. But some of them even said it was the best panel and most productive one they've ever seen at any lottery conference. And that served as a great kick-off to last week's conference, hearing that kind of praise.
So to start off last week's meetings, I served on a couple of different panels. One was focused on the Mega Millions game. And I was able to share some details about some changes that will ultimately come to your attention as a rule proposal, changes to the Mega Millions game that will keep that game viable, relevant and profitable in the face of the $2.00 success with the Powerball game.
I was also able to take credit for Texas being a leader and continuing to push for innovation and change to our overall game portfolio. And I want to I keep that momentum going as I become the president of the North American Association of State and Provincial Lotteries in October. That will be one of my main agendas.
Another highlight for Texas on this panel was a discussion of our recent transition to dual jackpot billboards for our multi-state games. I don't know if you've seen any of our newly transitioned billboards. We have approximately 130 outdoor billboards that are focused on our multi-state games, Powerball and Mega Millions. And when we first started selling both games, we had about half of those dedicated to Mega Millions and half of them dedicated to Powerball.
That was a big marketing problem for us, because there were times when the Mega Millions jackpot was at 12 million and Powerball was at 300, and you would see the wrong billboard in certain locations. So we moved quickly, and we are now the first state that has gone completely statewide with the dual billboards for both jackpot amounts, making sure that we capture and that we market the highest jackpot that's available in the market at the current time. Right now, as we said earlier, those billboards look very attractive, with 139 and 222 up on them.
All or Nothing, quite frankly, is the best draw game innovation in the last several years in the lottery industry. The game itself has attributes that have never before been utilized in a day draw game. Many months ago, I challenged Michael Anger and his team to come up with a new draw game and not feel shackled by the traditional parameters that were placed on daily draw games; and that is, limiting yourself to two drawings a day or limiting yourself to a 50 percent payout.
And Michael went back, and he worked very closely with Robert Tirloni and the rest of our products staff, as well as our GTECH marketing team, and that's how All or Nothing was born. The sales and revenue for that game have exceeded our wildest expectations. We have already matched the full year sales projection just -- how many months into the year are we?
MS. PYKA: We're only 35 weeks.
Both of those opening panels that I served on caused my colleagues to have many questions of the Texas team that was there over the next several days. All of those questions focused on: What's your secret? What are you doing right in Texas?
The second day of the conference, Pollard Banknote -- Pollard is one of the three instant ticket print vendors that prints tickets for the Texas Lottery. They were given their opportunity, as a vendor, to make a presentation, and they chose to focus their presentation on the launch of the Texas Lottery Star Trek game in Dallas, which we showed you-all the video of last week. That caused a great buzz at the conference, in particular the focus on the younger demographic, the under 30 crowd that attended that event and the opportunity to market lottery products to that particular age group.
The next thing that occurred, our very own Dale Bowersock -- I know, Madam Chair, you know Dale. Commissioner Krause, I'm not sure you're familiar with Dale. Dale is our instant products coordinator here at the lottery. And I will tell you, he -- is he in the audience? He's not in the audience.
CHAIRMAN WILLIAMSON: No, I haven't seen him.
MR. GRIEF: He is the best in the industry at what he does, and that's designing and working with our printers and with GTECH Texas to come up with all these fantastic scratch-off games that you see and that you see the revenue results every month when we have our meetings.
Dale gave his first presentation ever at an industry conference, and that's a daunting task if you've never done it before. There's hundreds of people there, there's people from around the globe, the leaders from lotteries and vendors alike. Dale's focus was on: What have the Texas Lottery scratch-off sales done over the last three years? What kind of growth have we achieved?
Of course, that was a great story to tell, the sheer numbers and the percentage gains that we've seen for scratch-off sales. It really made Dale a rock star for the rest of the conference. He was inundated with people from other states wanting to talk to him about our instant ticket strategy. And when Dale, during his presentation, he interspersed some of our TV commercials within his presentation. And when he played our Broadway-themed all-that-cash commercial from a couple of years ago, the conference attendees actually applauded. Now, this is an audience that sees every lottery commercial in the world. And I have never seen that kind of reaction from a group of conference attendees at seeing a lottery commercial. But it was that kind of excitement. And again Dale, in his very first appearance at making a presentation, he hit it out of the park. He did a great job in representing us in that presentation.
And, finally, the icing on the cake for us in Texas. As I said before, privatization, it's a big deal in the industry. Many states engaged in it actively and others in discussion. GTECH and Scientific Games, the two biggest lottery vendors in the world, have recently won a partnership to operate the Indiana lottery, and they will soon be taking over all the day-to-day management of Indiana. I had the pleasure of meeting their CEO of their Indiana lottery, as well as their Vice President of Marketing, at a luncheon during this conference. And what they asked was if their senior management team could come down this month or in June -- they're on a very tight timeline -- and spend a few days with the Texas Lottery and the GTECH Texas staff, because they
said they understand that we do it right and we're the best and they know where to go when they want to get advice -- Now, I'm sharing all this information with you today because this is very similar to what I shared with the staff in a staff meeting last week. And it's in an effort to keep our lottery team positive and focused on doing the great job that they do each and every day and try not to get caught up or concerned with any statewide policy debates or discussions that may be going on regarding the Texas lottery. As Rep. Dennis Bonnen, who is also chairman of the Sunset Commission, said on the floor of the House during the debate on our sunset bill recently, "The Texas Lottery Commission is an A-plus agency." He said that on the mic in the debate. So with that, Commissioners, I will tell you, like I told the staff last week, I am very proud to be associated with the Texas Lottery Commission. And with that, that concludes my report. And I'm happy to answer any questions that you might have.
CHAIRMAN WILLIAMSON: Thank you, Gary. Commissioner, do you have any comments or questions?
COMMISSIONER KRAUSE: Well, I do, but ladies first.
CHAIRMAN WILLIAMSON: Well, I had asked Gary to share all of this here with -- you know, the staff, I know, has heard this. But for the rest of you and on the record, I wanted just to be out there, just how good this agency is. You know, Gary is only successful because of the staff that he has and the support we get from our lottery operator. And so, obviously, it's a team effort. But I just thought this was a real important message to be out there in the public, so I asked him to share that.
COMMISSIONER KRAUSE: You know, when a team wins the championship -- football, basketball, baseball -- in the off season, all their starters are looked at and people come try to hire them away, all the free agents. And so, anyway, we've got some great esprit de corps and ought to keep them together here. You know, you've got some superstars on your staff, Gary.
MR. GRIEF: Absolutely. Thank you.
CHAIRMAN WILLIAMSON: Thank you. Thank you for sharing that report with us.
COMMISSION MEETING - THURSDAY, FEBRUARY 2, 2012
AGENDA ITEM NO. VIII
CHAIRMAN WILLIAMSON: Okay. The next item is consideration of and possible discussion and/or action including proposal on new game -- a new rule 16 TAC §401.320 relating to All or Nothing On-Line Game Rule. Pete and Robert, this your item, please.
MR. TIRLONI: Good morning again, Commissioners. For the record, my name is Robert Tirloni. I'm the products manager for the Commission. We're here today to talk about a new on-line game concept and a rule proposal. We're going to change it up a little bit today. I'm going to go first and walk through a brief PowerPoint that describes the game, then Pete will follow up and talk to you all about the rule proposal.
So I thought it would be good to start off today by kind of summarizing our on-line game portfolio and what it looks like. What you see before you right now is an actual piece of point of sale that we use in stores; and our retailers really like this point of sale piece because, at a glance, it shows you all of our on-line games and the days that they're drawn. So, you know, somebody walking into a store on Thursday can immediately see what games are being drawn on Thursday. So like I said, this is a very well received piece. And if we start -- if our supplies start to get a little low, we hear from the retailers pretty quickly, and we make sure we get these back out.
And you'll see from looking at this that we have, up towards the top, we have our multi-state game. So we have $2 Powerball, which we've been talking about quite a bit lately, and we have Mega Millions. Those are on different draw days. In Texas we are fortunate enough to be able to support our own in-state, multi-million dollar jackpot game. A lot of states nowadays, they don't have their own in-state game. They just have the multi-state games. But we are a large enough state to be able to, not only have the two multi-state games, but also have our own in-state jackpot game.
We also have Texas Two Step on Mondays and Thursdays. That's also a jackpot game but a much smaller scale. So that game has a jackpot that starts at $250,000, and then it increases as the jackpot rolls. So it's really nice because we have jackpot game offerings every day of the week, Monday through Saturday.
Then we have our daily games. Pick 3, which is our three digit; Daily 4, which is our four digit; and Cash 5, which is our five digit game. Those are drawn every Monday through Saturday, and Pick 3 and Daily 4 are drawn twice a day. So they're drawn at 12:27 and 10:12 at night.
So when you look at this, you see we have a pretty full product portfolio on the on-line game side. And if you go to other states, you probably won't find too much or, you know, too many different other concepts or games in market that we don't already have; but we're always looking to see what we can do better. Can we enhance any of our games or can we introduce anything new? And so we started talking to GTECH in the fall of 2010 about introducing a new game. And we wanted something that was going to fit within the portfolio and compliment what we had already but also be different and unique. And so when GTECH starting looking at game designs, they focused on the $2 price point to provide differentiation from what we already had. Now, of course, at that time we didn't have $2 Powerball, but that was a focus. And that's a focus industry-wide is to get on-line games above the $1 price point.
I think we talked a little bit about that when we first started talking about $2 Powerball. The goal eventually on the on-line side is to mirror the success that we've experienced on the instant side by introducing different games at different price points. The game designs that you'll end up seeing that we actually focus-group tested, they all had a higher price payout than our typical on-line games. Most online games or most of our on-line games pay out at 50 percent. The games that were designed had payouts right around 55 to 56 percent, and that allows the game designer to create more valuable prize tiers in the game.
Another goal of the designs was to create concepts with good overall odds of winning. Obviously, the reason for that is to be able to have players experience more frequent wins when they're playing the game and multiple drawings per day. We've had good success with Pick 3 and Daily 4 having two drawings per day. We believe that the reason our instant games are so successful is because they provide instant gratification. Pick 3 and Daily 4 are probably the closest you get to that on the on-line game side because they are drawn twice a day, six days a week.
So we did market research on all of the concepts. There were four concepts that were tested, and we had two different phases of the research. The first phase was focus-group research, and that was conducted in August of 2011.
The second phase of the research was quantitative, and that was conducted a month later via the internet. And we had 1,200 players participating in that research.
The good news is that both the qualitative and the quantitive research revealed the game All or Nothing was the favorite concept of all four. And that's good news when you find that out through the quantitive research because the qualitative or focus-group research, you're dealing with a much smaller audience. You're talking to, you know, maybe 20, 30, 40 people and getting some initial feedback about the concepts. When you hear good things about a game in the focus groups and then that gets validated or verified, so to speak, in the bigger research group, that's good news.
So the All or Nothing game, one of the reasons it was popular in the focus groups was it was simple and easy to understand and to play. And again, the good news is the quantitive research backed that up. 69 percent of the participants said that All or Nothing was easy to understand. The All or Nothing concept was appealing to everybody who participated; but it was also a favorite amongst our Pick 3, Daily 4, and Cash 5 players. And that's important because those are the daily game players. So those are the people who play on a regular daily basis, and so we want to make sure if we're going to introduce another daily game, that those players like the concept.
And the last notable thing from the research has to do with our lapsed players. Our lapsed players rated this as a preferred game concept. 50 percent of them said that they would purchase All or Nothing if it were available for sale in Texas, and any time we can introduce a product that's going to bring people who have stopped playing back into the game, that's a positive too.
So All or Nothing, how does the game work? How do you play? We already talked about the price point. It's $2 per play, and players choose 12 out of 24 numbers. And then we draw 12 out of 24 numbers. Very unique feature of this game is how you win the top prize of $250,000. You can win by matching all 12 numbers, or you can win by matching zero numbers. So that -- you know, that is a very unique feature of this game. I'm going to show you all the prize tiers on the next slide. And the drawings would be held four times a day at 10:00, 12:27, 6:00, and 10:12 p.m. Now, the 12:27 p.m. and the 10:12 p.m., those are our existing day and nighttime drawings.
So really we're introducing two new draw times per day for this game, and that would be 10:00 and 6:00. The 6:00, I will tell you, was well received by players also in the research. The 6:00 p.m. draw time was very well received.
The logo you see on the screen, I wanted to show that to you. We kind of like it. That is a logo that was designed for the mocked-up How to Play brochures. Every game that was tested had a How to Play brochure that the research participants could look at, almost as if they were going into a retail store and picking up the brochure. And that was the logo design that was on the All or Nothing brochure.
So if you all eventually choose to adopt this rule in the future, we'll probably tweak that a little bit to kind of get it in sync with the way our other logos look, but I just kind of wanted you to see the color scheme and the look of the logo that was used in the research.
So here are all of the prize tiers. So you'll notice, as I mentioned, you can win the top prize of $250,000 by either matching zero numbers or matching all 12, and this -- we refer to this as an hourglass game. You can kind of see the top portion of the matrix and the bottom portion mirror each other. So you see you win $500 if you match 11 numbers, but you also win $500 if you match one number. You win $50 if you match two numbers or ten numbers. You win $10 if you match three numbers or nine numbers, and then you win $2 if you match four numbers or eight numbers. And I do have to point out, if you play and you match five, six, or seven numbers, you don't win a prize. So that will take -- you know, that will take some education on our part with our retailers and our players.
I do also want to point out we talked about the odds as, you know, that was the goal of these
I have a brief schedule of events for you to kind of put all of -- all of our -- this whole rule proposal in prospective. So we're talking about the game and the rule today. If you choose to publish the rule in the Texas Register, we will have a public comment hearing here on February 29th; and the rule would be ready for your consideration to adopt probably in late March, possibly early April. And if you choose to adopt the rule right around that time, late March, early April, we project that we can have this game launched by Sunday, August 5th. And that's really good because that would give us a solid three weeks of sales from this new game right at the end of the fiscal year, but we would also then be starting our new fiscal year with a new game that's already been out in market. And hopefully, we would be building up some momentum with that game and be off to a real successful sales start for the next fiscal year.
CHAIRMAN WILLIAMSON: Okay. Commissioners, you have any questions?
COMMISSIONER KRAUSE: I've got a couple -- couple of questions. How do you find lapsed players?
MR. TIRLONI: The research company does that. When they are recruiting players to come in for the focus groups, they have to fill out a questionnaire that asks them about their playing history; and a lapsed player, for this research, was defined as somebody who had played a game in the past six months but had not played for in the last month. So they had been a player, but something caused them to stop playing. And all of that's determined through the questionnaires or the responses they give to questions. They're all screened in order to get into the groups.
COMMISSIONER KRAUSE: So by launching this in August -- and we're going to have had three launches of new products this fiscal year. Because we completed one, we've got one in a couple weeks, and then this one in August.
MR. TIRLONI: Yeah. Actually, there's more than that. There's -- well, there's a lot more than that; but our big initiatives, besides the $10 spotlight game I talked to you about, we have another $20 one coming out -- another $20 spotlight game coming out in, I believe it's May or April. Yes, we're very busy.
CHAIRMAN WILLIAMSON: Cynthia, you have any?
COMMISSIONER DELGADO: This isn't the final logo or?
MR. TIRLONI: It's not the final logo, no. We'll probably, if you all end up adopting this rule -- the square layout does not work as well for us on our website, and we're, you know, developing a mobile website right now. And so most of our game logos for our on-line games are rectangular, and so we'll probably keep a lot of these same design elements but tweak it a little bit.
25 CHAIRMAN WILLIAMSON: All right. Great. All right, Pete. You want to take care of the legal side, please.
MR. WASSDORF: Good morning, Commissioners. For the record, my name is Pete Wassdorf, Assistant General Counsel in the Legal Services Division, and I'm continuing on with Agenda Item 8.
With any new on-line game, the Commission publishes game-specific rules which detail how the game is played, the terms and conditions of play, the price point, the times and days of the draws for the game, the prize tier, the odds of winning, each winning match, and the dollar amount of the prizes. Before you is Agenda Item No. 8, that would -- a proposed rule that would effectuate the All or Nothing game described by Robert; and the Staff recommends that the Commission initiate the rulemaking process for consideration of adoption of §401.320 after a 30 day public comment period and to set a public hearing on the proposed rule at 9:00 a.m. on February 29th, 2012. And that's it for me. I'm happy to answer any questions.
CHAIRMAN WILLIAMSON: Thank you. Commissioners, do you have any questions
COMMISSIONER DELGADO: No, ma'am.
CHAIRMAN WILLIAMSON: Do I hear a motion?
COMMISSIONER KRAUSE: I make a motion that we initiate the rulemaking process by publishing the proposed rule 16 TAC §401.320 in order to receive public comment.
CHAIRMAN WILLIAMSON: Second?
COMMISSIONER DELGADO: Second.
0 CHAIRMAN WILLIAMSON: All in favor?
COMMISSIONER KRAUSE: Aye.
CHAIRMAN WILLIAMSON: Aye.
COMMISSIONER DELGADO: Aye.
CHAIRMAN WILLIAMSON: Motion passes 3-0.
And at this time we'll take a break until 10:15. It is 9:55 -- 56.
MS. KIPLIN: Commissioners, I have a memo that, if you'll initial, will reflect your vote on this matter.
Related Stories - All or Nothing
Texas Lottery's Press Release Regarding Suspending Sales, Click here
Houston Chronicle Reports Contradicting Statements by Gary Grief, Click here
(All About the Texas Lottery)