1 1 2 3 4 5 6 * * * * * * * * * * * * * * * * * * 7 8 TEXAS LOTTERY COMMISSION 9 LOTTO TEXAS RULEMAKING COMMENT HEARING 10 MARCH 7, 2003 11 12 * * * * * * * * * * * * * * * * * * 13 14 15 16 17 18 BE IT REMEMBERED that the TEXAS LOTTERY 19 COMMISSION LOTTO TEXAS RULEMAKING COMMENT HEARING was 20 held on the 7th day of March, 2003, from 9:07 a.m. to 21 9:53 a.m., before David Bateman, RPR, CSR in and for 22 the State of Texas, reported by machine shorthand, at 23 the Offices of the Texas Lottery Commission, 611 East 24 6th Street, Auditorium, Austin, Texas 78701, whereupon 25 the following proceedings were had: 2 1 2 A P P E A R A N C E S 3 4 5 6 FOR THE TEXAS LOTTERY COMMISSION: 7 8 9 MS. KIMBERLY L. KIPLIN, 10 General Counsel 11 12 13 MR. ROBERT TIRLONI, 14 On-line Products Manager 15 16 17 18 19 20 21 22 23 24 25 3 1 MS. KIPLIN: I'm going to go ahead and 2 call to order the Lotto Texas Rulemaking Comment 3 Hearing. Today is Friday, March 7th, 2003. The time 4 by my watch is seven minutes after nine in the 5 morning. 6 My name is Kimberly Kiplin. I'm the 7 general counsel for the Texas Lottery Commission. 8 With me today I have Mr. Robert Tirloni, who's the 9 on-line products manager in the Marketing Division of 10 the Texas Lottery Commission. 11 The purpose of the hearing today is to 12 receive comment on the proposed new Rule 16, Texas 13 Administrative Code Section 401.305 relating to the 14 Lotto Texas on-line game, the new proposed rule, and 15 to receive comment on the proposed repeal of the 16 existing Lotto Texas on-line game rule. 17 Comment can be received today in oral 18 form or in writing. And it can also be received in 19 writing during the comment period. The comment period 20 expires on March 16th, 2003. 21 There are copies of the proposed 22 rulemaking as you enter the room, as well as witness 23 affirmation forms. For those persons who wish to 24 testify today, please complete the witness affirmation 25 form and give it to me. I have received two already. 4 1 The rulemaking process, including the 2 rulemaking comment hearing, is conducted under the 3 Texas Administrative Procedures Act. As part of the 4 rulemaking process, an agency proposes a rulemaking 5 and the purpose is to receive public comment. 6 The comment that is received is 7 summarized, and the summary is part of the Preamble of 8 the rulemaking as adopted if that is, in fact, the 9 action that occurs as an outcome of the rulemaking. 10 We are making a record of the comment 11 that we receive today. And so in order to make a 12 clear record, when I call your name, please come to 13 the table. Identify yourself for the record before 14 you present your comment. If you are making comment 15 in a representative capacity, please identify who you 16 represent. I will call your name in the order of the 17 receipt of the witness affirmation forms. 18 We do have a court reporter today who is 19 recording this hearing for us. And so to the extent 20 that it is possible, please stop talking if a question 21 is asked and I will do the same or Mr. Tirloni will do 22 the same so that we don't have two voices trying to be 23 recorded at the same time for the court reporter. 24 Uh-huhs and huh-uhs don't go well with the transcript. 25 So if you can make it clear, yes or no, if there are 5 1 questions that are -- that are asked of you. 2 The purpose of the rulemaking comment 3 hearing as I mentioned is to receive the comment. 4 It's really not for -- to respond to questions. If 5 you have questions, this is really not the form for 6 that. The staff is not here to answer questions or 7 engage in a debate. 8 It really is to receive the comment for 9 the purposes of the rulemaking process. It's intended 10 to allow citizens to comment on the matter in such a 11 way as to assist the agency in understanding the 12 issues or the elements of the rulemaking. 13 Due to the inclement weather that Austin 14 and I'm thinking most of Texas experienced February 15 26th -- and that was the day of the original 16 rulemaking comment hearing -- it may have made it 17 difficult for persons who wanted to attend that day to 18 attend. And so that's why the Commission is convening 19 a second rulemaking comment hearing today, as I 20 mentioned, on March 7th. 21 For persons who do not wish to attend a 22 comment hearing, the written comment will be received 23 through March 16th, 2003. Comment after that day will 24 not be considered and will not be part of the 25 rulemaking record. 6 1 Mr. Tirloni, do you have any comments 2 that you'd like to make on the record? 3 MR. TIRLONI: No, ma'am. Not at this 4 time. 5 MS. KIPLIN: With that, I will go ahead 6 and call on persons who wish to make comment in the 7 order in which I received at this point. And I 8 mentioned I only have two witness affirmation forms. 9 Mr. Boaze, please come forward. Thank 10 you for being here. 11 MR. BOAZE: I had planned on being here 12 the 26th as well. 13 MS. KIPLIN: I imagine that you had. If 14 you would, just go ahead and identify yourself for the 15 record. And could you spell your last name for us? 16 MR. BOAZE: My name is James W. Boaze, 17 B-O-A-Z-E. 18 MS. KIPLIN: And then Mr. Boaze, I 19 indicate -- I see that you've indicated on your 20 witness affirmation form that you're against the Lotto 21 changes. 22 MR. BOAZE: Yes, ma'am. 23 MS. KIPLIN: We're happy to receive 24 whatever comment you wish to make today. 25 MR. BOAZE: Okay. Now I've already got 7 1 my statement and stuff typed out here, so that should 2 make a little bit of my uneasiness a little bit 3 better. 4 MS. KIPLIN: Well, just feel right at 5 ease and take your time. 6 MR. BOAZE: Please add my name to the 7 list of people and actual Lotto players that are 8 opposed and very much against the suggested change to 9 the Lotto format. 10 You wonder why the number of players 11 have dropped, but yet you want to make it even harder 12 to play? I understand that you have several experts 13 advising you on the changes. But if you took a real, 14 live survey of the actual players, you would see why 15 the numbers don't increase until the pots get higher. 16 I am guessing these are the same experts 17 that told you a few years ago adding the extra numbers 18 would serve the same effect. I guess they made a 19 mistake on their judgment in this situation. I can 20 assure you that if these proposed changes are actually 21 put into effect, you will have lost even more of the 22 dedicated players. 23 And I know that my family won't play as 24 much even when the pots get bigger because of the 25 changes. I might get a Quick Pick every now and then 8 1 when the pots get over the 20- to 30-million range, a 2 little bit different than getting five dollars of the 3 Quick Picks every time it's over 10 million. 4 We very much believe in the philosophy 5 that you can't win if you don't play, but it almost 6 sounds like you're even trying to take that option 7 away from the serious players. I might as well sit 8 outside in the yard during thunderstorms playing with 9 tin poles to see what numbers come to mind. 10 I represent a family of four players and 11 also a group from work of about 10 or so. Just a 12 simple suggestion from real players that over the past 13 several years have donated several thousand dollars. 14 That much can be proven. We've been playing since the 15 start in '92. 16 Instead of changing the current game, 17 why not ask for the consumer support to contact the 18 appropriate representatives to push the issue to add 19 the Powerball game here to Texas? Another option 20 would be just to cut the Lotto back to one drawing a 21 week, allowing more people to go and spend just the 22 five bucks during that weekly thing. 23 We do things as a family and we were 24 spending approximately over 300 dollars a month to 25 play all the various Lotto games: scratch cards, 9 1 Lotto, Cash 5, Pick 3. You name it; we played it. 2 At one point when we had the Aquafest 3 and the Pick 3 first came out, the authorities there 4 at that point were trying to tell us how to play the 5 game. My sister had to correct them on how to play 6 the game, so that gives you a hint of how serious we 7 play. 8 Needless to say, if the winning -- I got 9 off track. Not to mention when the jackpots went up, 10 we would buy additional tickets outside of our regular 11 allotted format and stuff. Needless to say, with the 12 winning percentage being so low, we had to cut back 13 due to lack of return profits. 14 Maybe if you can find more adventurous 15 ways of actually televising the drawing or the 16 updates, more people would be willing to part with the 17 weekly money that isn't dragging them to the poor 18 house. 19 My group from work is just as dedicated 20 as my family is, and we play faithfully on both 21 Wednesday and Saturday when the pots are over 10 22 million or above the limits we have set. We have some 23 that hit whenever it's at 10. Others join in at 20 24 and 30 million. We can't afford to put in 10 dollars 25 each on a weekly basis to maybe win back five dollars 10 1 as a group. You do the math. 2 And that's my statement. 3 MS. KIPLIN: Well, thank you very much 4 for your comment. 5 Mr. Tirloni, do you have any questions? 6 MR. TIRLONI: No, I don't have any 7 questions. Thank you for being here. 8 MS. KIPLIN: Thank you for being here. 9 Thank you for persevering. I understand you tried to 10 make it for February 26th. 11 MR. BOAZE: We -- my family is very much 12 one of those you don't have the right to complain if 13 you don't vote. This is my version of voting. And 14 like I say, I've got a group out at work of about 10 15 or so. 16 I asked my sister to comment this 17 morning, what she wanted to add. She's like, "What's 18 the point? They're not going to pay attention, 19 anyway." 20 And that very much goes against our 21 family philosophy because that's why we vote. If you 22 don't know there's problems out there, you can't do 23 anything to fix it. Thank you. 24 MS. KIPLIN: Thank you very much. Have 25 a good day. 11 1 MR. BOAZE: Yes, ma'am. 2 MS. KIPLIN: Ms. Nettles? 3 MS. NETTLES: Good morning, Kim. For 4 the record. My name is Dawn Nettles and I'm with the 5 Lotto Report and do the Web site www.lottoreport.com 6 and I am from Dallas. 7 MS. KIPLIN: Are you -- you didn't 8 indicate on your witness affirmation form that you're 9 representing anybody or anything. Are you 10 representing the Lotto Texas Report? 11 MS. NETTLES: You ask me that question 12 every time I come in. I don't represent anybody but 13 myself. 14 MS. KIPLIN: Okay. So you're here on an 15 individual capacity? 16 MS. NETTLES: I'm thinking about that 17 answer. 18 MS. KIPLIN: That's fine. 19 MS. NETTLES: I honestly don't know how 20 to answer it because I'm very active in the Lotto and 21 I'm very much opposed to this and I'm very active in 22 pursuing and getting the word out to the people. So 23 whatever it is that you wish to call that, you may. 24 Each people -- like this gentleman over 25 here standing on his own with his own comments, but I 12 1 do assist people in getting comments to the 2 Commission. But I don't know these people. I'm not 3 responsible for them and/or their words. They're 4 responsible for their own. 5 MS. KIPLIN: Well, I'm not trying to 6 characterize in what capacity. I'm just asking you so 7 I have it for the record. It would not be my place to 8 try to characterize or... 9 MS. NETTLES: Well, let the record show 10 that I publish the Lotto Report and I'm from Dallas 11 and I'm very active in watching over the Texas 12 Lottery. 13 First of all, the first thing I want to 14 say to you this morning is I want to make it real 15 clear that I am not here because I believe it's going 16 to do any good. I do not believe that speaking here 17 at a comment hearing and to you, Kim Kiplin, does any 18 good at all, period. 19 I believe that you are -- or I know that 20 you are the counsel for the Texas Lottery Commission. 21 You're employed by them and you're their counsel. The 22 Texas Lottery Commission wishes to adopt this rule. I 23 understand and recognize that it's your job to assist 24 them to achieve what it is that they want to achieve. 25 I do not believe -- I don't want you 13 1 thinking that I've driven all the way from Dallas to 2 talk to you because I believe it will do any good 3 because quite frankly, I don't. I don't believe it 4 will do any good to speak to any of the commissioners, 5 either. Though I will comment to the commissioners 6 because it's a formality. 7 And that's why I'm here now, as a 8 formality because I want it on the record and it is 9 the way to do things. But I have absolutely no faith 10 that it's going to do any good to talk about any 11 issues or any points on this because the Commission 12 wants this and you have your job to do, which is to 13 combat the comments. 14 By that, an example to give you of what 15 I'm referring to specifically is: People comment and 16 they'll say "I don't like this rule change because 17 it's making it too hard to win." You summarize 18 comment -- and I'm well-versed on your summary -- and 19 you will come back and say "Comment or said: They 20 don't like this change because it's too hard to win. 21 Counsel disagrees with that because the overall odds 22 of winning have been decreased." 23 Now three years ago in this room -- 24 close to this room. It's been remodeled. After you 25 added the four balls and there had been some winners 14 1 like in September or October of 2000 and there was 2 discussion in this room about gee, there had been a 3 four million winner or five or whatever and everybody 4 was a little concerned about that, which I felt that 5 was very, very sad to hear the Texas Lottery 6 Commission complaining that there were winners. 7 But at any rate, Toni Smith got up here 8 and she said, "Well, Commissioners, we've just proven 9 it's a winnable game." 10 Well, everybody in the room that day 11 knew that she was referring to the jackpot. And 12 that's precisely what she was referring to. When the 13 players come to you and they say "We don't like this 14 because it's not a winnable game," they mean the 15 jackpot. 16 So I understand that I'm up against that 17 with you in anything that I say or any comments that 18 you receive. The commissioners, I don't have very 19 much faith in the commissioners because number one, 20 the rule's even been proposed, which the governor 21 appointed them and they had a twofold job. 22 And it's their duty and responsibility 23 to look after the State's best interest and the 24 people's best interest where the Lottery is concerned. 25 And because they allowed such a rule to even get 15 1 proposed, then I realized that their interest only 2 lied with the State and the income that could be 3 derived as a result of such a game being played and 4 offered in Texas. 5 So therefore, I have no faith in them 6 either. They're a formality to me much like being 7 here today is for you. 8 I do -- though some members of the press 9 joke with me about this. And maybe I am naive. And 10 currently as I sit here, I do have a little faith in 11 our state legislators. And the only reason I have 12 faith in them is because they're voted into office. 13 And when they hear from the people in their areas, 14 they'll listen. 15 So I have a little hope and a little 16 faith that perhaps they may do some talking to 17 somebody of importance to perhaps put a halt to this 18 plan the Commission has. 19 I also have a little bit of faith in the 20 retailers. Retailers care about their customers. 21 Their competition is fierce. And they can't afford to 22 make their customers angry. And I don't believe that 23 the retailers, if they knew what the people had to say 24 and the real bottom line of what all of this rule 25 change really encounters, I don't believe that they 16 1 would want to sell it or at least would try to voice 2 their opinion to the Commission to stop from doing 3 something like what you-all are attempting to do. 4 So I -- as far as I'm concerned, I'm 5 here as a formality. Though I do plan in the next -- 6 in the next coming days between now and the 16th, I do 7 intend to go further with the legislators and the 8 retailers, which I'll get to in a minute. 9 Now let's talk about intent for a 10 second. I can go to the grocery store and buy an 11 apple. And I buy that apple with the intent to eat 12 it. 13 I go to the service station and fill up 14 my car with gas, pay $1.79 a gallon. But I'm buying 15 that gasoline because I intend to drive my car. I 16 can't drive it if I don't have gas. 17 I go to the store and buy a shirt. I 18 buy it with the intent to wear it. If there's a hole 19 in the shirt, I take it back. They'll either refund 20 my money or give me another one because they sell 21 quality products and they have integrity and they want 22 me to come back as a customer. 23 I pay my house payment every month 24 because I intend to live there for the month. Now I 25 might die, but I still plan to live there. So I make 17 1 that payment. 2 I pay my phone bill because I intend to 3 use my telephone, okay? 4 Games of Texas, a player walking into 5 the store and he buys a Pick 3 ticket. The player's 6 intent when he buys that ticket is to win 40 dollars, 7 80, 250 or 500 respectively. That's his intent. 8 That's why he's playing that game is to win that much 9 money. 10 A player goes to the store and buys a 11 Cash 5 ticket. His intent in buying that ticket is to 12 win the jackpot. His intent is not to win consolation 13 prizes. He buys that ticket, he spends his 14 hard-earned dollars on that ticket because he's 15 planning to win the jackpot. 16 Texas designed the Pick 3 game for those 17 who wanted to win 500 or less as Steve Lavine put it 18 to me quite bluntly many years ago. They designed the 19 Cash 5 ticket so people -- Cash 5 game so that people 20 could win a hundred thousand. I believe y'all were 21 advertising the average jackpot was 75 thousand or 22 something. 23 I don't recall, but I know at one point 24 there were several pots that were worth 300 thousand 25 until all the changes were made. I thought the 18 1 average was roughly 100 to 150 thousand. So it was a 2 game for people who wanted to play who wanted to win 3 that much money. That was the intent in the design of 4 the game was for players to win that much money. 5 Then you decided there was a market for 6 a million-dollar prize, so you came out with Texas 7 Million. Players had to pick four numbers between one 8 and a hundred, literally impossible. You had very few 9 winners. You kept the game going a long time, but 10 people bought those tickets intending to win one 11 million dollars. 12 Then they had the Lotto, which was 13 three, four million on up to however it climbed up to 14 be. So it was a multi-million dollar win. There's 15 not a person in the state of Texas who goes to the 16 store to buy a Lotto ticket that's intention is not to 17 win the jackpot. Nobody goes to buy a Lotto ticket 18 with the intent of hitting three of six numbers, four 19 or five of six numbers. 20 If they don't hit the big one, then it's 21 nice to have the small one. But that's not their 22 intention when they buy the ticket. They buy these 23 tickets in good faith, in honor and belief in the 24 integrity of the Texas Lottery. 25 Now the Texas Lottery, on the other 19 1 hand, when they started out, they had good intentions. 2 They paid fairly. They paid right. They didn't hurt 3 anybody. But the Texas Lottery, because sales went 4 down a little bit and levelled off, started changing 5 the games back in '99. 6 That's when y'all started going downhill 7 big time. And you have with this proposed rule that's 8 on the table right now intentionally -- the sole 9 intent of this rule is to make it impossible or very 10 difficult for anybody to win the jackpot. You're 11 doing that and giving that to the consumer who's out 12 there buying the Lotto ticket intentionally to win the 13 jackpot. 14 But this commission has decided the only 15 way they can make more money is to give the consumer a 16 game they cannot win until you reach 40 to 50 to 60 17 million dollars in sales in a three-day period. 18 I feel this is very wrong. In fact, I 19 believe that when you intentionally put a product out 20 there that you know is no good for people to spend 21 their money on like the diet product that the Attorney 22 General is currently going after, I believe that's as 23 close to a scam as you get. And I believe it's really 24 wrong for the Commission to do this. 25 You will make more money if you adopt 20 1 this rule. I know that you will. Most of the players 2 do not understand it, but I know how you will and I 3 understand fully what's going on here. Your sales 4 initially will drop down to about two million because 5 of the anger in the state. 6 I realize that the Commission doesn't 7 care. I realize it's the least of your concerns 8 because you know and I know that when the jackpot 9 finally reaches the 30, 40, 50, 80 million that you'll 10 make enough to offset that where it averages out to 11 where you'll make more money. 12 I understand the intent and I'm opposed 13 to it. My strong opposition to your intentions of 14 giving the people an unfair game with a population of 15 21 million and odds of 47.7 million to one is 16 terrible. It's -- it's wrong. 17 Because I'm so opposed to that aspect of 18 the game, the other points in question are minute to 19 me. Though for the record, I am going to address 20 those -- those issues, too. 21 First of all, you are -- this rule 22 specifically states that the player still has to 23 choose cash value option or annual pay at the time 24 that they purchase their tickets. And this Commission 25 has always told me that it's because of the IRS that 21 1 you have that rule. And that's clearly not true. 2 I've spoken with the Internal Revenue. 3 They have spelled it out clearly for me. And there is 4 no law. The only reason the Commission doesn't want 5 to offer that is because they're going to take 6 advantage of somebody who accidentally marks their 7 ticket with annual pay and they can't change their 8 mind, so you get to purchase the annuities. 9 And I know for a fact on some of the 10 annuities where your Web site clearly states that the 11 players get all the interest earned on their 12 investment, I know for a fact that is not always the 13 case. The players are not always receiving everything 14 that's been invested on their behalf. 15 On cash value option, if a person wins 16 the Lottery -- especially now, if this rule gets 17 adopted and some lucky person really wins a hundred 18 million dollars, by golly they ought to be able to 19 find out what's best for them. But they won't know 20 that until after they've won. 21 So I am absolutely opposed. And I would 22 say that probably 99 percent of the rest of the 23 players in the state of Texas, that is their biggest 24 concern is the cash value versus annual pay option. 25 This rule that you have put before -- 22 1 going back to the commissioners. The commissioners 2 approved this to be proposed and the commissioners 3 failed to recognize that the rule as written does not 4 guarantee the players their percentage of sales. We 5 put in. The State should get their share. The 6 players should get our share, period. 7 There shouldn't be any sneaky way of 8 keeping more of the player's share of money. This 9 rule as it's written, there are two ways that the 10 State is keeping more than their share of sales. 11 First of all, the percentage paid on the 12 prizes does not equal 100 percent, as you know. 13 You're withholding a percentage in reserve just in 14 case you need it to pay the guaranteed prizes while 15 you're advertising the game to be paramutual. We both 16 know that the figures are probably overallocated as it 17 has been in the past. 18 In the past 10 years since this Lottery 19 began, the amount set aside to pay the guaranteed 20 prizes have been more than sufficient. And then you 21 keep additional monies from the players' share of 22 sales that goes into the reserve. Today that reserve 23 amount from the three of six prizes and the reserve 24 money put into reserve totals 122.9 million dollars. 25 Now I realize that you-all have gone 23 1 against what was written in the rule and paid out 2 extra monies to the six of six winners to try to cover 3 yourselves, but that's not the concern. The concern 4 is that the rule said that the player was to receive a 5 set amount of sales. 6 And if you-all overpaid people, that's 7 your problem. You did it against the rule. It was 8 not in the rule. It was not in the rule to pay the 9 amount you advertised. 10 Okay. Forget that. I am opposed to the 11 fact that the rule does not guarantee the players 12 their share of money. It clearly does not. It has 13 conflicting language in it. It says that they're 14 going to get 52 percent back, yet they won't. There's 15 no way. 16 The other thing I object to is this 17 commission has made a point for 10 years since its -- 18 since the inception of making it very clear that every 19 drawing is an independent event, yet you round down 20 prizes and carry over funds. 21 This man might play one game one day 22 like he just said. And if he were to hit something, 23 he may not have gotten all of his money that was due 24 him from that one drawing. And he might miss the next 25 drawing or might not win the next one. So he doesn't 24 1 get his fair share. 2 All prizes, if you want to be fair to 3 the people of Texas on all these games, they need to 4 be straight paramutual. And there is no other way 5 around it to be fair. There should be no rounding 6 down prizes. 7 I've calculated prizes that equal $28.90 8 and the player get 28 dollars. Well, if those pennies 9 on the dollar add up to the reserve budget of 122 10 million dollars, imagine what those 90 cents do. 11 Okay. The -- I don't know what I didn't 12 cover. We need a rule that guarantees the players, 13 that protects the players for their fair share of 14 sales. This Commission is supposed to have integrity. 15 And I have heard you say "We want comment." I've 16 heard the commissioners say "We want comment." 17 But Legal does its job and Legal makes 18 certain that the Commission only does what the law 19 says it has to do. By that, I mean the law says you 20 have to post to the Texas Register and the comment is 21 to be received from the day it's posted in the Texas 22 Register, from February 14, 30 days after to March 23 16th. 24 Now you and I both know that this 25 Commission met last November and this was put out that 25 1 this -- some kind of a change for Lotto Texas was 2 coming. All the newspapers carried it statewide. It 3 was carried in December. It was carried in January. 4 On February 1st is when all the newspapers reported to 5 the people that this change was being proposed. 6 And the people wrote you-all. I know 7 that you throw out all the comment. I know that you 8 won't consider the comment because it was received 9 before February 14th. This is wrong. These people 10 write to you. They're dying to be heard. 11 I've done everything in my power to stop 12 the people from talking about Cash 5, Pick 3, Texas 13 Two Step, Texas Million, scratch-offs, and to address 14 only the issue at hand, which is the proposed rule. 15 But when these people get to thinking about the 16 Lottery, they're thinking: I'm writing. I want to be 17 heard. I want to say this to them. 18 And they just let you have it. I mean 19 with everything, all of their concerns. They're good 20 to you. They're good to you. They come in here and 21 they give you ideas or they give you suggestions. Now 22 I realize that some of the suggestions people give you 23 are not possible. I've read them. I've seen them. 24 Of course they're not. The people don't 25 really understand the game, okay? But these people 26 1 are dying to be heard and they're dying to voice it. 2 How do you think the people are going to feel that 3 were here that read the paper on February 1st were so 4 inspired to write you a letter to know that you're not 5 even going to consider what they had to say? 6 These people comment. When they make 7 their comments, they ask you questions. And I've 8 heard you say multiple times: No, that came in in a 9 comment. So we don't answer any question in a 10 comment. 11 The people want to be heard. And y'all 12 don't listen and you throw out their comments. And I 13 think that's a dirty trick, a real dirty trick. You 14 don't want comment. You do anything in your power to 15 keep from getting comment. 16 You don't have anything on your Web site 17 that's highly visible, yet people that don't 18 understand the legal process of this deal, they don't 19 know to go to Legal, click on Legal. And then they 20 don't know that it's 16 TAC 401.305. They don't want 21 to sit there and read for 30 minutes to try to figure 22 out what all that stuff says. 23 You don't have it spelled out in 24 layman's terms. You don't want the players to know. 25 There is no intent for this commission that I find to 27 1 have integrity when it comes to these games. The 2 intent of the Texas Lottery Commission is to make 3 money at any cost, by any means, no matter if it is 4 robbing the people and giving the people an unfair 5 game, which is exactly what this is. 6 In 2000 over the adding of four balls, I 7 had problems and I told the Commission. We had 8 petitions out in the stores. G-tech reps were picking 9 them up. Well, the same thing has happened again. 10 This time it happened in Houston. 11 G-tech rep came up, found the petitions 12 at a Citgo station at the corner of Ella and North 13 Forest Boulevard, 77090 Houston, Texas, found a 14 petition, pitched a fit to the store people, picked 15 them up, threw them in the trash can and then went on 16 to the other stores in that area and did the same. 17 Those petitions were lost. I don't need 18 those petitions because I got well over three thousand 19 comments or letters written that I intend to give to 20 this commission from the people. Not today. 21 These are in order, and I've gone to a 22 lot of trouble to get these suckers in order. And 23 this is all that I've got filled out at this point. 24 When I left, I still had well over 800 to print and 25 put in order. 28 1 I intend -- before I -- the law says 2 that you must receive comment by US Mail or by fax. 3 And I intend to fax these to you so that you receive 4 them legally because there is over -- I figure it will 5 take five days at 500 sheets in your fax machine. So 6 I figure I have to start faxing them the 10th or the 7 11th. 8 MS. KIPLIN: Ms. Nettles, you can submit 9 those written comment today and they will be part of 10 the record. 11 MS. NETTLES: I don't have copies and 12 there's two many of them and I'm not going to reprint 13 them. I'm going to fax these to each of the 14 legislators for each of the cities. There's 150 15 legislators and 50 senators. And then I intend to fax 16 to the retailers as well as I'm putting a notice up on 17 my Web site Saturday night for the 19-million dollar 18 drawing to enable the people to comment to the 19 retailers direct. 20 MS. KIPLIN: I guess my point is I 21 didn't want you to think that you could not submit 22 something in writing today -- hang on a second -- 23 because that's the purpose of the comment hearing. 24 If you have written comment, it can be 25 received today and it will be part of the record and 29 1 it will be considered. 2 MS. NETTLES: Okay. If the Commission 3 would like, I do have them. I did bring them and I 4 brought them for the purpose of the media. If the 5 Commission would like to have these comments now, if 6 you swear not to get them out of order, I'd be happy 7 to let you make copies of them. 8 Otherwise, I'll fax them to you. But 9 you can feel free to have these and that will leave me 10 the balance to fax. 11 MS. KIPLIN: Well, if we receive it, 12 we'll receive it into the record. We're not making 13 copies for convenience purposes. 14 MS. NETTLES: That's fine. Then I'll 15 fax it to you because I'm not going to make two copies 16 of those. 17 Okay. So anyhow, I'm finished. I've 18 blasted you well enough for the day. Those are my 19 feelings. It's unfair. It's wrong. Your intent is 20 wrong. 21 Governor Perry vetoed a bill on 22 progressive bingo back in 2001 because it quote, 23 "expanded gambling." I realize Governor Perry can't 24 veto this proposed rule because it's not his. It's 25 not a law. 30 1 Y'all have your own police department. 2 You can do anything you want. You don't have anybody 3 watching over you at all. There's no consumer 4 protection, so y'all can literally get away with 5 anything that you want. 6 But if you continue at the rate that 7 you're going, I believe that the people -- especially 8 by way of these comments -- will do everything to get 9 the Lottery out, okay? Because you're really 10 overstepping your boundaries. 11 And I don't care what other states do. 12 I live in Texas and I don't want my neighbors robbed. 13 I don't want sales enticed by dangling 100-million 14 dollar jackpots in their face to get them to overspend 15 just so y'all can make more money. 16 We need a game that's fair and we need a 17 game that's winnable. And what you're offering is 18 neither, okay? 19 MS. KIPLIN: Thank you for your comment. 20 I do want to say, just to make sure the record is 21 clear, you used different phrases along the lines of 22 "you know" and "we both know" and "your intent" and 23 the "Commission's intent." 24 And the purpose of the hearing today was 25 to receive comment, but I certainly don't want my 31 1 silence to be considered for the record to be any 2 tacit agreement with the characterizations that you 3 made with regard to your comment. 4 Mr. Tirloni, do you have any questions? 5 MR. TIRLONI: I just have one question. 6 Ms. Nettles, the petition that you referred to, is 7 that a petition that you provided to that retail 8 location in Houston? I'm unclear as to -- 9 MS. NETTLES: No. I spoke with Gary 10 about it the other day. I tried to call Larry King at 11 G-tech, but he's out of the city until next week. 12 We have volunteers out there putting 13 petitions that are in the stores. And this happened 14 to me in 2000 and it was me that it happened to. And 15 it happened to others. And the only way we know that 16 it was G-tech in that particular case is because it 17 was on film and we were able to identify exactly who 18 did what and how they did it, okay? 19 The petition in question here is a 20 gentleman out of Houston that's running a bunch of 21 stores and he had 30 petitions out. And the G-tech 22 rep came and found them. And he literally voiced his 23 concern and told the store "huh-uh" and he threw them 24 in the trash can, signed petitions. This man had over 25 30 petitions out and they're all gone. 32 1 MS. KIPLIN: Do you know his name? 2 MS. NETTLES: Whose name? 3 MS. KIPLIN: The man you're -- the man 4 you're referring to that work -- that's in the retail 5 location, you gave the address. 6 MS. NETTLES: No. 7 MS. KIPLIN: And I understand that you 8 did talk with -- you indicated Gary. And for the 9 record, that's Mr. Grief, the deputy executive 10 director. And I think he represented to you that if 11 you could get him more specific information, he would 12 look into it. I don't know that you've followed up 13 with him. 14 MS. NETTLES: No. 15 MS. KIPLIN: I would recommend and 16 encourage you to do so. 17 MS. NETTLES: That's why I just put it 18 on the record here. I have the other addresses of the 19 stores coming. They -- whenever I contacted the 20 person in Houston, they sent me only the one store and 21 he sent me an e-mail last night. 22 And here's the e-mail. And the e-mail 23 says that he's going to go and get the other 24 addresses. For some reason, he thinks he has to 25 furnish me with the addresses of all the stores, which 33 1 he doesn't have to do. But I can't talk to him by 2 telephone, okay? It's strictly by e-mail. So he 3 gave me -- 4 MS. KIPLIN: Why is that? 5 MS. NETTLES: Why don't I talk to him by 6 phone? 7 MS. KIPLIN: Yeah. 8 MS. NETTLES: I just don't. I haven't. 9 Actually, I did try to call him. After I talked to 10 Gary Grief the other day -- 11 MS. KIPLIN: Sure. 12 MS. NETTLES: -- I did call him. But he 13 was out and he did not return my call. He did send me 14 an e-mail. And then he -- because he apologized. In 15 fact, he apologized in another message. He apologized 16 for not getting back to me, stating that he had been 17 working very long hours and was not able -- in fact, 18 he sent me an e-mail at two in the morning to be very 19 specific. 20 MS. KIPLIN: Well, I understand you're 21 putting it on the record here. But my understanding 22 is that Mr. Grief indicated for you to get with him, 23 in direct contact with him. And so I'm encouraging 24 you to -- 25 MS. NETTLES: I'll do that. 34 1 MS. KIPLIN: -- do that. 2 MS. NETTLES: I'll do that before I 3 leave. 4 MS. KIPLIN: Do you have any other 5 questions? 6 MR. TIRLONI: No. 7 MS. KIPLIN: Do you have any further 8 comment, Ms. Nettles? 9 MS. NETTLES: No. Will you allow me to 10 see the comments of the Commission? 11 MS. KIPLIN: I'm not here to answer 12 questions. I'm here to receive comment. 13 MS. NETTLES: No, thank you. 14 MS. KIPLIN: Thank you very much. I 15 have no other witness affirmation forms. And the time 16 is -- looks to be about 13 until 10. 17 I think what we'll do is go ahead and 18 recess for about five minutes and see if anybody else 19 will want to provide comment. 20 We'll go off the record at this time. 21 (Recess from 9:47 a.m. to 9:52 a.m.) 22 MS. KIPLIN: I recessed the hearing for 23 about five minutes just to see if there were other 24 people that were trying to get into the auditorium who 25 had parking issues. 35 1 I'm going to go ahead and adjourn the 2 rulemaking comment hearing at this time and it's 3 roughly seven minutes until 10. 4 Thank you for those comments that we 5 received. The hearing is adjourned. 6 (Hearing adjourned at 9:53 a.m.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 36 1 REPORTER'S CERTIFICATION 2 3 STATE OF TEXAS ) 4 COUNTY OF TRAVIS ) 5 6 I, David Bateman, RPR, Certified Shorthand 7 Reporter for the State of Texas, do hereby certify 8 that the above-mentioned Lotto Texas Rulemaking 9 Comment Hearing came on for hearing as hereinbefore 10 set 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 ____ day of 17 ______________, 2003. 18 19 20 _________________________________ David Bateman, RPR, CSR #7578 21 Expiration Date: 12-31-03 1609 Shoal Creek Blvd, Suite 202 22 Austin, Texas 78701 (512) 474-4363 23 24 25 JOB NO. 030307DPB