Having a lottery machine: Now that's the ticket

Dec 27, 2005, 6:49 am (41 comments)

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Critics raise questions as retailers play by the rules and win scores of jackpots

New Jersey's 10 most frequent winners of lottery jackpots have one thing in common: Luck.

But five of those top 10 winners have something else going for them: A store that sells lottery tickets.

"We play, we win," explained Mahendra Vora, standing behind the counter of Everything Nice, a stationery store on Bergenline Avenue in West New York that he owns with his wife, Sudha.

Together, the lucky couple has claimed 175 jackpots between 2000 and 2004, worth a combined $360,000. He said he "played all the time," but declined to say how many tickets he buys.

"We're just lucky sometimes," he said.

It's hard to imagine anyone much luckier, especially when it comes to the state's twice-daily Pick-4 drawings.

The Voras have claimed 119 Pick-4 "jackpots" — tickets that pay about $2,500 and therefore must be reported to the state and Uncle Sam for tax purposes.

The odds of winning a single Pick-4 jackpot?

10,000 to 1.

It is not illegal for retailers like Vora to play or win the lottery. And New Jersey, like every state with a lottery, programs its terminals to make it impossible for a winning ticket to be sold or printed after a drawing.

The state also reviews winning claims by dealers "to ensure the integrity of the lottery has not been compromised," according to a Treasury Department spokesman.

Regardless, critics say any lottery that permits dealers to play or win has a serious integrity problem and is exposing itself to the potential for tax evasion or other illegal activities.

"It's a bad policy," said Carl Zeitz, a former member of the state's Casino Control Commission, which regulates gambling in Atlantic City. "You want to assure the public that the game is honest, and the people who are involved in the game shouldn't be playing the game."

By contrast, dealers, security guards and other licensed casino employees are not allowed to gamble in their own casinos, or other casinos owned by their employer, said Daniel Heneghan, a commission spokesman.

"You can't have a person after a shift as a dealer for a card game turning around and playing," Heneghan said.

The Star-Ledger earlier this month printed a three-part series showing the state's growing dependence on the lottery to plug its budget gaps. The investigation analyzed five years of lottery sales and found a distinct pattern of lottery sales rising in areas where income levels fell.

As part of that project, the newspaper obtained a database of lottery winners from the state. An analysis of the most frequent jackpot winners found five retailers among the top 10.

Interviews the past two weeks found many possible explanations: luck; retailers who buy winning tickets at a discount from people who don't want their earnings reported; dealers buying tickets that were incorrectly entered; and even retailers on the fringes of addiction who buy so many tickets they can't help but score several jackpots.

Pramod Patel, who owns two convenience stores in Morristown and was 10th on the list of winners, said he often buys more than $50 of tickets a day just from "mistakes" — tickets his customers reject because store clerks type in the wrong numbers.

To illustrate, he reached into his pocket on a recent afternoon and pulled out a mixed wad of green bills and pink lottery tickets he said he had purchased that day.

Patel said he would rather buy the mistakes than void them, in part to save time but also for superstitious reasons: "It's usually the mistakes that turn out to be winners," he said.

Patel reported 80 jackpots, mostly Pick-4, between 2000 and 2004, good for $138,786.

When a player wins a jackpot of $600 or more, he or she must fill out paperwork and send it to Trenton to claim the prize. The primary purpose is to report the income for tax purposes — though taxes are only withheld if the prize is more than $5,000.

New Jersey also screens winners to see if they have defaulted on student loans or owe child support.

Several people said winners often skirt regulations by submitting winning tickets through a proxy.

Retailers "buy winning tickets from customers all the time," said Charles Shakor, a former lottery seller who owns a supermarket in Old Bridge. "There is no doubt."

A retailer, he said, might pay $3,000 for a $4,000 winner — a discount the actual winner is happy to accept because they get the cash immediately and without any taxes or other documentation.

The retailer may or may not ultimately pay taxes on the winning ticket, he said, but it's much more difficult for the government to trace once the proceeds are mixed with other cash transactions at a convenience store.

"I have definitely heard stories about people who regularly claim prizes on behalf of other people," said Todd Northrop, a Somerset County resident who runs "Lottery Post," a Web site with 20,000 registered members. "It is not only common to avoid things like child support, but also to manipulate taxes."

While illegal immigrants are entitled to collect lottery winnings, many don't know the rules and sell tickets to a proxy, said Rich Cunningham, who runs a workplace safety program in New Brunswick.

"At one point there was a buzz going around that if you claimed a lottery jackpot, that would attract attention to you and people were getting sent home because of it," Cunningham said. "You get these kinds of urban legends all the time among immigrants."

Patel, however, said he knows the rules and would never cash a customer's ticket under his name.

"I don't do that," he said.

Officials from the Treasury Department and the New Jersey Lottery, which generated $2.3 billion in lottery sales last year, denied repeated requests to comment on the possible reasons why dealers were winning so often.

Critics, meanwhile, say it's an issue that demands attention.

"If retailers are winning this often, in my mind it would at least set off red flags," said Alicia Hansen, a lottery expert at the nonpartisan Tax Foundation in Washington, D.C. "Perhaps the state is getting so much money from these stores it wouldn't care too much."

Zeitz said the issue speaks to a fundamental conflict of interest.

"The lottery commission is self-regulating," he said. "It regulates the game, but it also sells the game, so it has every incentive to keep pushing sales."

Newark Star-Ledger

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wizeguy's avatarwizeguy

WTG Todd, another plug for Lottery Post! Thumbs Up

 

Jake649's avatarJake649

There is another possible reason for retailer wins that was not mentioned in the story. Retailers who "steal" tickets from customers. A customer redeems a ticket and the retailer either claims the ticket did not win anything or won only a small prize. The retailer then keeps the ticket to claim as their own.

There have been court cases in Ontario where this practice has been proven to have happened.

 

DoubleDown

 

 

"Patel, however, said he knows the rules and would never cash a customer's ticket under his name.

"I don't do that," he said. "

 

No, but they will scan scratch off tickets to see if they are winners prior to selling them if they can get away with it.

Rip Snorter

 

 

"Patel, however, said he knows the rules and would never cash a customer's ticket under his name.

"I don't do that," he said. "

 

No, but they will scan scratch off tickets to see if they are winners prior to selling them if they can get away with it.

Can they actually do that?  Scan an unscratched ticket and know it's a winner?

J

RJOh's avatarRJOh

I've seen people buy a bunch of scratch-off tickets and ask the clerk to scan them for winners without ever scratching them.  I never knew if the clerks were being honest when they scan/scam them and said "you didn't have any winners", but it was faster than scratching and checking them visually.

DoubleDown

Jack--I know that scanning the bar code on the back tells the tale, and they still need to have the three digit code from the front, but the key words are" if they can get away with it".

DD

 

DoubleDown

I've seen people buy a bunch of scratch-off tickets and ask the clerk to scan them for winners without ever scratching them.  I never knew if the clerks were being honest when they scan/scam them and said "you didn't have any winners", but it was faster than scratching and checking them visually.

 

I Agree!  That's what I'm talking about.

Because of this practice I am very careful where I purchase scratch offs.

If they scan too many without punching in the 3 digit code, they can get in trouble, but they can always claim "computer error"....

four4me

 

 

"Patel, however, said he knows the rules and would never cash a customer's ticket under his name.

"I don't do that," he said. "

 

No, but they will scan scratch off tickets to see if they are winners prior to selling them if they can get away with it.

Can they actually do that?  Scan an unscratched ticket and know it's a winner?

J

Rip I don't think so the numeric code they enter to see if it's a winner or what amount to pay out is under the latex at least that's the way the tickets in Maryland are. There is also a bar code they scan it's on the back of the scratch off. When they scan any scratch off ticket that information is sent directly to a central PC at lottery HQ. I think they would get suspicious if a retailer continuously scanned tickets from a pack of tickets. Then again I could be wrong a retailer might be scanning a whole pack of tickets if the bar code on the back is the actual confirming bar code then the retailer might be keeping most of the winners and selling the losing scratchers. .  

truecritic's avatartruecritic

If they can scan a bunch of tickets before they are scratched, they why would they sell them?  Just pull out the winners and claim them all and sell all the losers.  (Or save a few small winners for friends, maybe).

Doesn't make sense if that is true.

As to "proxy" tickets...                                                                                      Is that the going rate for selling a winning ticket?  20% discount?

RJOh's avatarRJOh

If they can scan a bunch of tickets before they are scratched, they why would they sell them?  Just pull out the winners and claim them all and sell all the losers.  (Or save a few small winners for friends, maybe).

Doesn't make sense if that is true.

As to "proxy" tickets...                                                                                      Is that the going rate for selling a winning ticket?  20% discount?

I don't think anyone would be stupid enough to purchase tickets if they weren't on the original roll of tickets.  Even if a retailer knew there was a winner on the roll, he would have to undo the roll to scan it and tear out the winning tickets and that would be obvious to any player.

A retailer wouldn't make much  if he cashed in tickets for a 20% discount since he would probably be in that tax bracket unless it was a way to laundry dirty money.  I would think he would only offer 50% of its value.

I wonder if New Jersey is the only state where half of the top lottery winners sell lottery tickets?

truecritic's avatartruecritic

RJ 

>I don't think anyone would be stupid enough to purchase tickets if they weren't on the original roll of tickets. 

There are plenty of stores in MI that sell individual instant tickets all the time, because they keep them in their register drawer.

Also, we have plenty of party stores that hang strips - in fact I would say it is unusual to be buying from a roll.  Can't remember the last time I saw a roll.

The article said $4,000 - figured that was a $5,000 full face value?

Oops, read it wrong - guess my question should have been 25%. Quote per the article "A retailer, he said, might pay $3,000 for a $4,000 winner"

DoubleDown

They come in rolls here in GA, but the rolls can be re-rolled if necessary....

Yes, it would leave gaps in the roll, but most people will never know unless they ask for a certain amount of the same game and notice that the serial numbers on the bottom of the ticket are out ouf order.

RJOh's avatarRJOh

truecritic,
 
I used to drive up to Michigan to get BigGame tickets before MegaMillions came to Ohio and I still will drive to Indiana to get PB tickets when its jackpot is over $200M and I never noticed scratch-off tickets hanging around like that.  I seldom buy scratch-off tickets but I certainly would not buy any if they weren't peeled off a new/tight roll.

Having seen some players buying tickets and having the clerk check them for winners without scratching them and then discarding them, I would be suspicious of buying any tickets just laying around.  I could probably do just as well checking the trash for discarded tickets.

Selling scratch-off tickets from a strips taken off a roll or a single tickets taken off a roll laying in a draw sounds a small store scam to me.  I can picture a major store chain doing business that way. 

fxsterling

il has a self scan i wish ga would get them

Bradly_60's avatarBradly_60

I was in WI back in Sept and the store that I was at had their own scanner for customers to scan their own tickets to check to see if they were winners.  I doubt those machines work for instant tickets though.  Otherwise that would be a huge security issue.  I also have never seen tickets not connected to a roll unless the cashier accidently pulled to many off.  Michigan has self scanners for club keno but that its.  They should have it for other games also.

About the articile I don't find anything wrong with allowing retailers to buy their own tickets.  There isn't a way to get ahead of everyone else.  Unlike in casinos were they know the games well and how do you explain a casino employee winning huge amounts of money when that situation comes up.  That's why officials with lotteries aren't allowed to play.  You just don't want to have to explain that to people.  Retailers though....who cares?

Brad

Drivedabizness

Some states have scanners that can check both onlilne and instant tickets (WI has GTECH - their latest models can check both)and there are layers of security to check for retailers who go "fishing" for winning tickets.

 

Don't you WANT retailers buying tickets?  It's one of the ways players know the games are legit.

TheGameGrl's avatarTheGameGrl

Yes its actually a practice I've been witness to here in PA- (re: scanning tickets prior to purchase). Recently asked a clerk why in a group of the ten tickets I bought most of them were very out of numeric order and just laying in the counter bin. Her response- "well for some of the clerks its harder to pull off the roll so we just tear them off in advance". Mind you on average I hit at least one winner in a series of ten- This time I bought ten, and they were each losers. Later on that night I went back and sure enough some of the clerks were tearing off the tickets and scanning them prior to placing them in the counter display. The ONLY time HQ lottery takes note of *odd* activity is if they entered the three digit code that is with the ticket. Otherwise it doesnt get entered *automatically* in the Lottery system. Its the code that unlocks it and enters it into the database for validation and pay out.

As to these retailers who Steal from Peter to pay Paul, its a system that many a business uses in there accouting department . Are they practicing good Business ethics to do so, nope! Is it done often, yes. I think at the very least these lottery retailers should be allowed to play provided its not at there own terminal. Let them wait in line like the rest of the lottery players. This way they stay *clean* and still get to claim legitimately. This concept of *buying* back tickets is malarky. They just retain them (without putting money in the lottery till to cover this), and then IF the ticket hits they go back claim the winner and split out the small difference they owe the Lottery till. Its called rolling over money. They have thirty days to turn in there monthly revenue (or at least in my area they do.)

Chewie

Critics raise questions as retailers play by the rules and win scores of jackpots

Shocking headlines.  Some one critisizing some one elses actions.  Who would have thought it possible! Some one being on the wrong end of the stick, and for what reason? Emotions, assumptions and personal predudice. Hang 'em high! For what? Doesn't matter, we don't agree with their actions, therefore they're bad people!  When in doubt, take someting small, amplify it, then everyone gang up on them.  The mob is always right.

justxploring's avatarjustxploring

 I don't think anyone would be stupid enough to purchase tickets if they weren't on the original roll of tickets. 

I have a relatively high IQ and do dumb things all the time! Yet I'm the first to think "boy that person is dumb" when I read about a scam. My friends say "wait until it happens to you, Nancy," since I'm so critical when people mail money or are victims of schemes. However, I see the same people all the time at the stores I shop in and probably would buy a lone ticket if the cashier said she pulled it off the roll by mistake or that a previous customer asked for 5 and she tore off 6. Until now I honestly never knew there was a way to scan them, but I rarely buy scratch tickets. 

Anyway, I want to say thanks to everyone. This is really good information as usual.  The topic interests me since last week I bought a Lotto ticket that someone left at 7-11. It was sitting on the machine. I was only trying to be nice since the guys were very busy.  The clerk said they were quickpicks (I checked) and that another customer had walked out without paying, so I didn't think there was any risk. Who knows? Maybe he didn't like the numbers?  Lotto is different from an instant ticket since the numbers haven't been picked yet, so there's no way that could have been a scam, plus I'm a regular at that store since I can walk to it from home. That being said, now that I've read this thread, maybe I should only buy tickets I watch popping out of the lottery machine.

I wanted to ask people here what they would do if they purchased several tickets and was short one. About a month ago I bought a Grouper at a local Sunoco station. It's a group of 6 QPs for $5. You get a 3-pick, 4-pick, Fantasy5, MegaMoney and Lotto. The 6th ticket is free and can be any one of the latter 3 games. She handed me 5 tickets. So I put them on the counter and the one missing was the free ticket. I only knew that because it is marked "free" according to the lottery website. I was polite and asked for my missing ticket. She insisted I got 5 tickets. I explained that a Grouper is a 6 ticket game and wouldn't leave. There was no manager to call. Then my expression started to change and I insisted she look around the machine & on the floor. She wasn't very cooperative and then I added "and don't forget your pockets." I'm usually not nasty, but I was starting to lose my patience.  So I let her help the other customers and searched all around the lottery machine. She eventually found the ticket. But what if I had given up and left?  One time I handed a clerk some cards and got the wrong numbers. Apparently one of my cards was bent and didn't go through so the clerk decided to manually enter the numbers. I realize he was trying to do his job, but he never asked. Guess what? He goofed! These were numbers I've played for 10 years too. I kept the "bad" ticket anyway (superstitious) and bought another one, but I marked a new card. I never ask anyone to manually enter numbers for me.  I guess he thought he was doing me a favor and didn't mention it until I said "where'd these numbers come from?"  All I could think of was what if after a thousand draws that set of numbers had come up and I hadn't proofread my tickets.  Yikes.

Rip Snorter

I've never played scratchers much, but this thread is enough to quell any urges I might have had in that direction in the future.

Jack

RJOh's avatarRJOh

justxploring,

Ohio had a promotional thing last year that issued a free QP when $5-$10 worth of tickets were brought together.  I bought two $5 bunch and when the 2 free QPs pop out, the clerk tried to act like she didn't know who the QPs belonged to.  Apparently she thought it was a promotion to give the clerks a chance to play for free and since some of her customers didn't know about the promotion she had been keeping the extra tickets for herself.  I didn't turn her in to the owner, but she wasn't working there when I returned a few weeks later. 

I think parts of lottery security systems are dependent on the players knowing the rules and using a little common sense when buying tickets.  Never buy a scratch-off ticket that might have been sold and discarded before you came into the store.

DoubleDown

Yes its actually a practice I've been witness to here in PA- (re: scanning tickets prior to purchase). Recently asked a clerk why in a group of the ten tickets I bought most of them were very out of numeric order and just laying in the counter bin. Her response- "well for some of the clerks its harder to pull off the roll so we just tear them off in advance". Mind you on average I hit at least one winner in a series of ten- This time I bought ten, and they were each losers. Later on that night I went back and sure enough some of the clerks were tearing off the tickets and scanning them prior to placing them in the counter display. The ONLY time HQ lottery takes note of *odd* activity is if they entered the three digit code that is with the ticket. Otherwise it doesnt get entered *automatically* in the Lottery system. Its the code that unlocks it and enters it into the database for validation and pay out.

As to these retailers who Steal from Peter to pay Paul, its a system that many a business uses in there accouting department . Are they practicing good Business ethics to do so, nope! Is it done often, yes. I think at the very least these lottery retailers should be allowed to play provided its not at there own terminal. Let them wait in line like the rest of the lottery players. This way they stay *clean* and still get to claim legitimately. This concept of *buying* back tickets is malarky. They just retain them (without putting money in the lottery till to cover this), and then IF the ticket hits they go back claim the winner and split out the small difference they owe the Lottery till. Its called rolling over money. They have thirty days to turn in there monthly revenue (or at least in my area they do.)

"for some of the clerks it's harder to pull off the roll so we just tear them off in advance" uh-huh, it's REAL hard to tear that perforated ticket , isn't it. 

Dupe Alert

Gamegirl: don't walk.... RUN !! from that particular store.

fast eddie's avatarfast eddie

Patel reported 80 jackpots, mostly Pick-4, between 2000 and 2004, good for $138,786.

That's a nice pick four record. what ya think, lots of straights or is it multiple box wins?

justxploring's avatarjustxploring

justxploring,

Ohio had a promotional thing last year that issued a free QP when $5-$10 worth of tickets were brought together.  I bought two $5 bunch and when the 2 free QPs pop out, the clerk tried to act like she didn't know who the QPs belonged to.  Apparently she thought it was a promotion to give the clerks a chance to play for free and since some of her customers didn't know about the promotion she had been keeping the extra tickets for herself.  I didn't turn her in to the owner, but she wasn't working there when I returned a few weeks later. 

I think parts of lottery security systems are dependent on the players knowing the rules and using a little common sense when buying tickets.  Never buy a scratch-off ticket that might have been sold and discarded before you came into the store.

Good advice RJOh. As I wrote, I rarely buy them and mainly purchase Lotto and MegaMoney tickets. I've had a hard time this year with jobs, but I used to play more games.  I'm still amazed that instant tickets can be scanned without being scratched!  I chuckled when you wrote that the clerk in Ohio acted as if the free tickets belonged to her.  In my situation, I think it was an innocent mistake but I'll never know. In any case, I wondered what action could have been taken if the ticket wasn't found. I suppose if it won I'd have the other 5 tickets in the group for evidence, but I never would have known if 5/6 hit which is often over $5,000. I realize it was "only" one ticket, but I bought it and I wasn't leaving until I got what I paid for.

 All these posts remind me of the movie "Matchstick Men" with Nicholas Cage. Excellent scene with a lottery scam.

qutgnt

These clerks would gladly pay 3000 for a 5000 ticket. Figure in taxes you get back 3500 or so, but they have so many losing tickets probably dumped in their trash cans they can just collect those and write those off against the winners, therefore getting the full amount back at end of year most likely.

mylollipop's avatarmylollipop

Yep!  That is why it pays to check your ticket yourself!!!  If you do not know the rules of the game; don't play.Naughty

TheGameGrl's avatarTheGameGrl

Yep!  That is why it pays to check your ticket yourself!!!  If you do not know the rules of the game; don't play.Naughty

Good advice to check tickets prior to leaving the machine play area.

 I adored the "know the rules" of the game or don't play. When did the lotteries create that rule?

sirbrad's avatarsirbrad

Another reason why I don't play scratchers. Plus I do not like all the dust left afterwards.

justxploring's avatarjustxploring

Yep!  That is why it pays to check your ticket yourself!!!  If you do not know the rules of the game; don't play.Naughty

I agree it is very important to learn the rules to protect your winnings. However your statement about not playing if you don't know the rules would probably eliminate 75% of the players. Then most jackpots would be much smaller.  From what I can tell, most people haven't a clue when they buy a ticket at the local store. I hear people all the time ask "What's the jackpot this week? or "How much does it cost?" The whole idea of a State Lottery is that anyone can buy a ticket for any game as long as you're over 18.

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