August 27, 1999
Re: Comments on the Proposed Amendment to 16 tac Section 401.305
I would like the Commission to recognize that the people of Texas only have so much money to spend on extra curricular activities such as playing the games of chance. When the Texas Lottery began, there was great success. The Lotto was successful, the Cash5 twice weekly was successful, and the daily Pick3 was successful. Even the scratch off tickets were successful. We had just the right amount of everything. And the state was receiving enormous amounts of volunteer taxes!
However, problems began to surface when the Commission felt compelled to make yet more money. As you know, the budgets in the beginning were for an increase in revenue for each year which was not realistic given the nature of this business. Gambling. People dream of winning, they overspend at first, then they come to their senses and spend what they can afford for a chance at the dream. Sales stabilized at a healthy sum but it appears it was not enough to suit the Commission.
Irregardless of the success, changes were made. The Cash5 was successful so the first change was to increase this game to 4 times a week so sales would increase ...... An attempt to make more money ... yet, all that was accomplished was the same amount of money in sales spread out over 4 days instead of two and less money spent for Lotto tickets. First sign of trouble - lower Lotto jackpots.
Then sales in Scratch Off tickets declined. Everybody knows this type of game is short lived. Ask every Bingo Hall director in Texas. No one with the Lottery should have ever expected scratch offs to soar forever. People went crazy buying them at first, but we all knew sales would have to decline. Players had to set budgets for themselves. But panic struck the Commission - So came the idea to cut the percentages so the state could make their quota in spite of lagging sales. (Ooops - this statement is WRONG. Panic did NOT strike the Lottery Commission - it struck the 75th Texas Legislature and they directed the Commission to lower the prize payouts then they reversed their decision in the 76th session.) What happened - players quit buying and the state lost more money than ever before. Just recently, percentages went up but so did the number of tickets printed. Printing costs soared - sales not up yet so lets panic again...
Lets have 54 balls instead of 50. Lets see, we take 50% right off the top for administrative expenses, (Ooops- this is wrong. I should NOT have said "50% right off the top for 'administrative expenses.'" I should have said, "50% comes right off the top - 7% for administrative expenses, 5% is paid to the retailers and 38% is returned to the state. This is what they do with their 50% which still comes right off the top of all sales!) that leaves 50% of all sales for prizes. Lets keep the players from winning the Lotto so often and we can earn more in interest. (I have since been told that the Lottery earns no interest on this money.) Lets make it harder for our players. Thats how well get more business ............ Wrong! As Zig Ziegler would say, Yall are suffering from stinkin thinkin!
Now lets look another brilliant idea - a new game will increase our sales. Here comes Texas Million. Yeah ... the players only have to pick 4 numbers out of 100 numbers to win One Million dollars! So tell me, what happened to the complaints about unhappy customers that couldnt even pick just 3 or 4 numbers out of a total of 39 numbers or just 3 or 4 numbers out of 50 numbers? This game was an obvious insult to the integrity of its players. As a result of this game, Cash 5 and Lotto sales declined again to allow for the purchase of Texas Million tickets and people became angry and saw the writing on the wall and you lost more players.
It is my opinion, if you increase the balls to 54, the Texas Lottery will be a thing of the past. Why cant yall see - players are going to play - but they only have so much money to spend. Residents become of age to play but at the same time, players die. You should not expect soaring sales like American Airlines - you should expect your revenue to be consistent and understand that it will not increase by millions because your customers only have so much money to spend and thats all your going to get no matter what you offer. You are selling fun, not a necessity in life. There is a big difference. And you already know how much Texans are willing to give and it was incredible.
Come on yall. Fix it. The Lottery didnt need fixing when yall fixed it - but it does now. So why dont you return things to the way they were when they didnt need fixing?
Return to basics. Offer Lotto on Saturdays and Wednesdays, Cash 5 on Tuesdays and Thursdays, Pick 3 six days a week. Cancel Texas Million. Its a bad game. Let the Texas Million money come back to the Cash 5 and Texas Lotto pots. If you feel the absolute need to have another game, then make it an alternate game. Cut one game out for 6 months or a year and offer another one in its place. When you do this, you will see sales stabilize, morale will return and youll know how much money you can expect to see and it should deviate only by a little bit. While you are a big business, youre not in the position to grow every year because of the nature of your business. Accept that and well all be much better off.
Thank you for listening. Believe it or not, Im for you. Not against you.
P. S. Please provide a copy of this to the Commissioners at the August 28 meeting.
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