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Tenn. Lottery audit: players spent $2 million on worthless tickets

Tennessee LotteryTennessee Lottery: Tenn. Lottery audit: players spent $2 million on worthless tickets
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Lottery responded too slowly; problem fixed 10 minutes after finding it

The Tennessee Lottery made a series of missteps and oversights after a software glitch began generating faulty winning numbers last year, and players bought about $2 million worth of unwinnable tickets before the error was found, according to a state audit.

The sweeping audit from state Comptroller John G. Morgan reviewed the entire episode between July 28 and Aug. 20, when a programming glitch caused no duplicate digits to appear in winning Cash 3 and Cash 4 numbers.

"A combination of unexpected and unlikely events unfolded" that eventually "resulted in the integrity and competence of all parties being called into question in the ensuing publicity," according to the audit.

The report found no fraud associated with the episode. It also praised the lottery for its swift response once the glitch was identified, saying that executives and staff "engaged in good-faith efforts to disclose the programming error and to exhibit complete transparency."

Lottery President Rebecca Hargrove said the lottery had implemented all of the comptroller's recommendations, "and then some."

"I am confident that the system that we have in place is completely random and fair," she said.

But some players are still suspicious. Al Palmer, a Henry County retiree, used to play Cash 3 and Cash 4, but stopped last year when the lottery gave up using ping-pong balls to draw winning numbers and instead began using computer software — software that ultimately proved to be faulty.

"There's nothing that would make me play the Tennessee lottery again," he said. If he did play again, he said he'd sooner cross into Kentucky and play its lottery.

$2M in tickets unwinnable

In all, players bought about $2 million in tickets that could not win because they contained duplicate digits, the comptroller said.

After the programming error was found and fixed, the lottery temporarily increased Cash 3's top cash payout from $500 to $599 and Cash 4 from $5,000 to $6,000. The lottery also paid $762,507 in refunds and $549,259 in increased prizes.

The episodes began as soon as the lottery switched on July 28 from the mechanical ball system to a computerized system for generating random winning numbers in the Cash 3 and Cash 4 games.

The problem stemmed from a mistyped letter in the computer application for the live draw. Because coding included a "u" for "unique" — instead of "r," for "repeating" — the machine was incapable of drawing repeating digits as winning combinations, such as 9-6-9 or 2-2-0-6.

The company that tested the equipment, Gaming Laboratories International, checked a test-draw mechanism before the software went live, but did not test the flawed live draw program; the company claims its contract did not require it.

As a result, the problem was not found. "I think the paperwork's pretty clear," said GLI's general counsel, Kevin Mullally. "They have a certification letter that doesn't ever mention the part of the software that has the error."

Smartplay, a New Jersey-based company that developed the automated draw system, had opportunities to identify the programming error the first day the computers went into use, "and they did not do so," according to the audit.

In days leading up to the system going live, Smartplay officials were present to install software and observe the first day of live draws, missing a chance to catch the non-repeated numbers. It is "uncontested" that Smartplay could have identified the problem, the audit said.

A man who answered the phone at Smartplay Tuesday said, "we don't make comments to the press," before hanging up. The man refused to give his name.

Glitch fixed in 10 minutes

Lottery officials, who received the numbers by text message, also did not notice the lack of repeat digits, according to the audit. The lottery received its first e-mail about the potential problem on Aug. 1, a second two days later, and six more in following days. Lottery executives knew about the e-mails, but continued to believe the drawings were anomalies, the audit said.

After 12 days, Chief Financial Officer Andy Davis reviewed data showing 70 draws without duplicate numbers for both Cash 3 and Cash 4. Had test draws been included, it would have shown that not a single one of 232 draws contained a duplicate number.

Another lottery officer agreed to contact the vendor, but thought he was supposed to contact GLI, rather than Smartplay, which the audit called a "critical misperception."

After consulting with GLI, the lottery conducted draws using a test system separate from the live system. Results with duplicate digits appeared, and "the decision was made to stay the course and to continue to monitor the draws."

But e-mails continued to pour in, and "deeply concerned" lottery officials decided on Aug. 19 to contact Smartplay. A lottery official talked to Tom Markert, Smartplay's executive vice president, on Aug. 20. He ran one test, which immediately revealed the problem; Markert estimated that the entire process took less than 10 minutes, according to the audit.

Tennessean

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19 comments. Last comment 9 years ago by Todd.
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KyMystikal's avatar - 1457224010054
Florence, Alabama
United States
Member #8658
November 13, 2004
1993 Posts
Offline
Posted: March 19, 2008, 12:20 pm - IP Logged

Lottery responded too slowly; problem fixed 10 minutes after finding it

The Tennessee Lottery made a series of missteps and oversights after a software glitch began generating faulty winning numbers last year, and players bought about $2 million worth of unwinnable tickets before the error was found, according to a state audit.

The sweeping audit from state Comptroller John G. Morgan reviewed the entire episode between July 28 and Aug. 20, when a programming glitch caused no duplicate digits to appear in winning Cash 3 and Cash 4 numbers.

"A combination of unexpected and unlikely events unfolded" that eventually "resulted in the integrity and competence of all parties being called into question in the ensuing publicity," according to the audit.

The report found no fraud associated with the episode. It also praised the lottery for its swift response once the glitch was identified, saying that executives and staff "engaged in good-faith efforts to disclose the programming error and to exhibit complete transparency."

Lottery President Rebecca Hargrove said the lottery had implemented all of the comptroller's recommendations, "and then some."

"I am confident that the system that we have in place is completely random and fair," she said.

But some players are still suspicious. Al Palmer, a Henry County retiree, used to play Cash 3 and Cash 4, but stopped last year when the lottery gave up using ping-pong balls to draw winning numbers and instead began using computer software — software that ultimately proved to be faulty.

"There's nothing that would make me play the Tennessee lottery again," he said. If he did play again, he said he'd sooner cross into Kentucky and play its lottery.

$2M in tickets unwinnable

In all, players bought about $2 million in tickets that could not win because they contained duplicate digits, the comptroller said.

After the programming error was found and fixed, the lottery temporarily increased Cash 3's top cash payout from $500 to $599 and Cash 4 from $5,000 to $6,000. The lottery also paid $762,507 in refunds and $549,259 in increased prizes.

The episodes began as soon as the lottery switched on July 28 from the mechanical ball system to a computerized system for generating random winning numbers in the Cash 3 and Cash 4 games.

The problem stemmed from a mistyped letter in the computer application for the live draw. Because coding included a "u" for "unique" — instead of "r," for "repeating" — the machine was incapable of drawing repeating digits as winning combinations, such as 9-6-9 or 2-2-0-6.

The company that tested the equipment, Gaming Laboratories International, checked a test-draw mechanism before the software went live, but did not test the flawed live draw program; the company claims its contract did not require it.

As a result, the problem was not found. "I think the paperwork's pretty clear," said GLI's general counsel, Kevin Mullally. "They have a certification letter that doesn't ever mention the part of the software that has the error."

Smartplay, a New Jersey-based company that developed the automated draw system, had opportunities to identify the programming error the first day the computers went into use, "and they did not do so," according to the audit.

In days leading up to the system going live, Smartplay officials were present to install software and observe the first day of live draws, missing a chance to catch the non-repeated numbers. It is "uncontested" that Smartplay could have identified the problem, the audit said.

A man who answered the phone at Smartplay Tuesday said, "we don't make comments to the press," before hanging up. The man refused to give his name.

Glitch fixed in 10 minutes

Lottery officials, who received the numbers by text message, also did not notice the lack of repeat digits, according to the audit. The lottery received its first e-mail about the potential problem on Aug. 1, a second two days later, and six more in following days. Lottery executives knew about the e-mails, but continued to believe the drawings were anomalies, the audit said.

After 12 days, Chief Financial Officer Andy Davis reviewed data showing 70 draws without duplicate numbers for both Cash 3 and Cash 4. Had test draws been included, it would have shown that not a single one of 232 draws contained a duplicate number.

Another lottery officer agreed to contact the vendor, but thought he was supposed to contact GLI, rather than Smartplay, which the audit called a "critical misperception."

After consulting with GLI, the lottery conducted draws using a test system separate from the live system. Results with duplicate digits appeared, and "the decision was made to stay the course and to continue to monitor the draws."

But e-mails continued to pour in, and "deeply concerned" lottery officials decided on Aug. 19 to contact Smartplay. A lottery official talked to Tom Markert, Smartplay's executive vice president, on Aug. 20. He ran one test, which immediately revealed the problem; Markert estimated that the entire process took less than 10 minutes, according to the audit.

I would like to know what they do to verify that each draw is ok when they claim the drawing has been audited and certified??

I love doubles and remember, it's just a game!!!!!!

    OldSchoolPa's avatar - Lottery-057.jpg
    Gurnee, Illinois
    United States
    Member #49731
    February 12, 2007
    917 Posts
    Offline
    Posted: March 19, 2008, 1:53 pm - IP Logged

    Tennessee, Tennessee, Tennessee...hee, hee, hee!  I can't believe you all are letting your state get away with continuing to allow the draws to be computerized.  You should call for the resignation of your lottery president and demand they install someone who cares about the integrity of the game...which would increase player confidence...thereby increasing satisfaction as well as profits.  Apparently your current head lottery official doesn't get it.

     Now I know that is highly unlikely to happen, so this is what some of you middle class die hard lottery players should do, especially if you have some sort of prepaid legal assistance.  Yes that's right, I would sue the lottery.  It seems as though lawsuits are the best way to get big people's attention.  Now I don't advocate frivolous lawsuits...defeats the purpose. Give it a try if you haven't already done so.

    Get MONEY!!! Winning a JACKPOT lottery is all the HOPE and CHANGE I desire!!!  NOW give me MONEY!US Flag

    The guy who won the presidency in 2008 really won the lottery...he is now millions richer, travels in first class style, and even has a staff that would be the envy of the richest Powerball winner (she has a staff of 2). Every night he goes to sleep, he probably plays the close of Dave Chappelle's Show: I'm rich beyatch!

      MADDOG10's avatar - smoke
      Beautiful Florida
      United States
      Member #5709
      July 18, 2004
      20106 Posts
      Offline
      Posted: March 19, 2008, 2:06 pm - IP Logged

      "After 12 days, Chief Financial Officer Andy Davis reviewed data showing 70 draws without duplicate numbers for both Cash 3 and Cash 4. Had test draws been included, it would have shown that not a single one of 232 draws contained a duplicate number."

       

      Didn't Mrs Hargrove say that during the "test" runs everything was normal?

      Now this says If they had included the test draws it would have shown NOT  any draw contained a DUPLICATE NUMBER.

      Somethings smells here and it aint the water...........!

                                                   

                                                     "  When Injustice Becomes Law, Resistance Becomes Duty "

        Avatar
        Cleveland, TN
        United States
        Member #4146
        March 25, 2004
        304 Posts
        Offline
        Posted: March 19, 2008, 6:57 pm - IP Logged

        "After 12 days, Chief Financial Officer Andy Davis reviewed data showing 70 draws without duplicate numbers for both Cash 3 and Cash 4. Had test draws been included, it would have shown that not a single one of 232 draws contained a duplicate number."

         

        Didn't Mrs Hargrove say that during the "test" runs everything was normal?

        Now this says If they had included the test draws it would have shown NOT  any draw contained a DUPLICATE NUMBER.

        Somethings smells here and it aint the water...........!

        Georgia, here I come!!!!!!!!!!!

          ThatScaryChick's avatar - x1MqPuM
          Idaho
          United States
          Member #56506
          November 21, 2007
          6537 Posts
          Offline
          Posted: March 20, 2008, 12:39 am - IP Logged

          Tennessee, Tennessee, Tennessee...hee, hee, hee!  I can't believe you all are letting your state get away with continuing to allow the draws to be computerized.  You should call for the resignation of your lottery president and demand they install someone who cares about the integrity of the game...which would increase player confidence...thereby increasing satisfaction as well as profits.  Apparently your current head lottery official doesn't get it.

           Now I know that is highly unlikely to happen, so this is what some of you middle class die hard lottery players should do, especially if you have some sort of prepaid legal assistance.  Yes that's right, I would sue the lottery.  It seems as though lawsuits are the best way to get big people's attention.  Now I don't advocate frivolous lawsuits...defeats the purpose. Give it a try if you haven't already done so.

          A lot of people will not give up playing. At this moment, I am one of them. I like to play lottery games even though most of the games here in Idaho are computerized. Many of us have contacted our states lotteries and it is quite clear that many states have no intention of changing back to balls. It is cheaper for them. If I end up quiting all the computerized games, I will only be able to play Powerball and I don't want that to be the only game I am able to play. I also can't afford to drive to another state to get tickets and online playing is bascially not an option either.

          "No one remembers the person who almost climbed the mountain, only the person who eventually gets to the top."

            LOTTOMIKE's avatar - cash money.jpg
            Tennessee
            United States
            Member #7853
            October 15, 2004
            11338 Posts
            Offline
            Posted: March 20, 2008, 2:21 am - IP Logged

            i won a lot of money and had a ton of fun with it while it lasted.i mainly played pick 3 and pick 4 and was pretty good with it especially multiple hits where i'd win a few thousand.lets just say i finished way ahead of the house in regards to the once fine lottery here in tennessee and i think thats why they changed to balls because of a lack of balls when it comes to dealing with players like me and a few others who were killing them in the numbers games.i got quite a few family members into it who were skeptical but didn't have the talent i had and couldn't figure out why i was hitting and they weren't.they didn't want to spend time studying it like me so no pain no gain i guess.i'm still pretty bitter because i loved getting that easy money but everything happens for a reason and you can't change things so why be angry.turning to RNG was a chicken crap way of them dealing with the winners who were killing them in pick 3 and pick 4 and from word of mouth and talking to people who played i've seen proof of some huge hits up in the tens of thousands.well they solved all this with the computerized draws that were so sneaky most players i talked to had no clue including an old man with playslips who literally got mad and said he was calling the lottery and walked out of the store when i told him.he knew what computerized draws were and was shocked when i told him we indeed were switched.i think the players deserved better especially with the underhanded way it was done and the little mishaps and scandals that have befallen the lottery here since the switch.

              Avatar
              NY
              United States
              Member #23835
              October 16, 2005
              3474 Posts
              Offline
              Posted: March 20, 2008, 2:33 am - IP Logged

              "After 12 days, Chief Financial Officer Andy Davis reviewed data showing 70 draws without duplicate numbers for both Cash 3 and Cash 4. Had test draws been included, it would have shown that not a single one of 232 draws contained a duplicate number."

               

              Didn't Mrs Hargrove say that during the "test" runs everything was normal?

              Now this says If they had included the test draws it would have shown NOT  any draw contained a DUPLICATE NUMBER.

              Somethings smells here and it aint the water...........!

              The part you quoted is referring to the pre-test draws that are done before the real drawing. They're done on the exact same system that is used for the live drawing. Apparently they also have another system with the same program, where the program is configured properly. That system isn't used for real drawings, but they apparently used it to test the program. The program works properly, but it has to be configured for the game they're using it for.

                LOTTOMIKE's avatar - cash money.jpg
                Tennessee
                United States
                Member #7853
                October 15, 2004
                11338 Posts
                Offline
                Posted: March 20, 2008, 4:22 am - IP Logged
                CASH 43/4/2008Evening2371$87,800.00
                CASH 43/3/2008Mid-Day1372$13,900.00
                CASH 43/3/2008Evening1723$53,400.00

                 

                LOOK AT THAT....i said this was going to happen and it did.i've actually thought about boxing a pick 3 number everyday and play the same evening number as the midday winning number.

                best way to bet these jokers now is exploit the flaws....keep it to yourselfCool

                  OldSchoolPa's avatar - Lottery-057.jpg
                  Gurnee, Illinois
                  United States
                  Member #49731
                  February 12, 2007
                  917 Posts
                  Offline
                  Posted: March 20, 2008, 8:24 am - IP Logged

                  A lot of people will not give up playing. At this moment, I am one of them. I like to play lottery games even though most of the games here in Idaho are computerized. Many of us have contacted our states lotteries and it is quite clear that many states have no intention of changing back to balls. It is cheaper for them. If I end up quiting all the computerized games, I will only be able to play Powerball and I don't want that to be the only game I am able to play. I also can't afford to drive to another state to get tickets and online playing is bascially not an option either.

                  Sounds a lot like what smokers say even though scientific evidence as well as the warning on each pack of cigarettes clearly tell smokers that their habit is killing them.  At least those who continue to play computerized games can't say they weren't warned...oops, the same was true for smokers but tobacco makers have lost some lawsuits...some big lawsuits. 

                  Actually I am with you...I too throw a little cash on one of the nearby states lotto game that happens to have switched to computer draws.  I actually don't think it is all that bad in that it allows the jackpots to rollover more thereby getting the pot up higher than it would get in the past when they used ball draws (I'm talking about both MI and IN).  So I will throw a buck in every now and then to see if I can break the rollover streak.

                  Get MONEY!!! Winning a JACKPOT lottery is all the HOPE and CHANGE I desire!!!  NOW give me MONEY!US Flag

                  The guy who won the presidency in 2008 really won the lottery...he is now millions richer, travels in first class style, and even has a staff that would be the envy of the richest Powerball winner (she has a staff of 2). Every night he goes to sleep, he probably plays the close of Dave Chappelle's Show: I'm rich beyatch!

                    konane's avatar - wallace
                    Atlanta, GA
                    United States
                    Member #1265
                    March 13, 2003
                    3333 Posts
                    Offline
                    Posted: March 20, 2008, 9:47 am - IP Logged

                    2 million dollars windfall profit for the Tennessee Lottery  ........... mission accomplished.  Period.

                    Good luck to everyone!

                      Todd's avatar - Cylon 2.gif
                      Chief Bottle Washer
                      New Jersey
                      United States
                      Member #1
                      May 31, 2000
                      23259 Posts
                      Offline
                      Posted: March 20, 2008, 2:18 pm - IP Logged
                      CASH 43/4/2008Evening2371$87,800.00
                      CASH 43/3/2008Mid-Day1372$13,900.00
                      CASH 43/3/2008Evening1723$53,400.00

                       

                      LOOK AT THAT....i said this was going to happen and it did.i've actually thought about boxing a pick 3 number everyday and play the same evening number as the midday winning number.

                      best way to bet these jokers now is exploit the flaws....keep it to yourselfCool

                      WOW!

                       

                      Check the State Lottery Report Card
                      What grade did your lottery earn?

                       

                      Sign the Petition for True Lottery Drawings
                      Help eliminate computerized drawings!

                        KyMystikal's avatar - 1457224010054
                        Florence, Alabama
                        United States
                        Member #8658
                        November 13, 2004
                        1993 Posts
                        Offline
                        Posted: March 21, 2008, 12:32 am - IP Logged
                        CASH 43/4/2008Evening2371$87,800.00
                        CASH 43/3/2008Mid-Day1372$13,900.00
                        CASH 43/3/2008Evening1723$53,400.00

                         

                        LOOK AT THAT....i said this was going to happen and it did.i've actually thought about boxing a pick 3 number everyday and play the same evening number as the midday winning number.

                        best way to bet these jokers now is exploit the flaws....keep it to yourselfCool

                        I didn't even notice that when it happened. I guess when i stopped playing so much I never really paid attention to the numbers. I didn't find out about this until I was at the store and the clerk told me that it was on the news about how the number came out 3 draws in a row. i used to be one of those who played every draw but since they changed to the computer i play every once in a while and all I play is $1.00 per draw. $.50 str 111 and $.50 str 666. If they ever come out I will stop playing them.

                        I love doubles and remember, it's just a game!!!!!!

                          JAP69's avatar - alas
                          South Carolina
                          United States
                          Member #6
                          November 4, 2001
                          8790 Posts
                          Offline
                          Posted: March 22, 2008, 5:51 pm - IP Logged
                          CASH 43/4/2008Evening2371$87,800.00
                          CASH 43/3/2008Mid-Day1372$13,900.00
                          CASH 43/3/2008Evening1723$53,400.00

                           

                          LOOK AT THAT....i said this was going to happen and it did.i've actually thought about boxing a pick 3 number everyday and play the same evening number as the midday winning number.

                          best way to bet these jokers now is exploit the flaws....keep it to yourselfCool

                          Somebody must be on to the rng quirk.

                          Look at the prize payout increase

                            JAP69's avatar - alas
                            South Carolina
                            United States
                            Member #6
                            November 4, 2001
                            8790 Posts
                            Offline
                            Posted: March 22, 2008, 5:54 pm - IP Logged

                            2 million dollars windfall profit for the Tennessee Lottery  ........... mission accomplished.  Period.

                            Yep,

                            That paid for the transition to rng.