Scientific Games, the international gambling-games giant, is defending what appears to be a year-long cascade of glitches and failed oversight that led to an insider hacking scandal and the shutdown of the Connecticut Lottery's popular "5 Card Cash" game.
Mollie Cole, director of communications for the Las Vegas-based Scientific Games, says that equipment for the game performed to the Connecticut Lottery Corporation's (CLC) standards.
"The hardware and software provided to CLC for the 5 Card Cash game and retailer terminals functioned at all times in accordance with the Lottery's specifications," Cole said in an email response to questions Monday from Hearst Connecticut Media.
But an assessment of the hacking scandal, which resulted in the arrests of about a dozen Lottery vendors from throughout the state and the suspension of the instant poker-like game last November, indicates at least three occasions in which Scientific Games and Lottery officials could have better secured the game.
Frank Farricker, acting Lottery president, in an assessment of the cheating and fraud, said that Scientific Games International, Inc. was first warned of a weakness in the game in January, 2015, when a clerk reported that the retail terminals displayed winning tickets before they were printed.
At the time, Scientific Games and Lottery executives agreed that it did not represent a major risk.
But in June, Scientific Games, without telling Lottery officials, implemented an equipment software changes in attempt to speed up the terminal functions, Farricker said. The software revision - called "firmware" by Scientific Games - actually slowed down terminals and allowed crooked Lottery agents to review upcoming instant tickets, void losers and keep winning tickets for themselves.
"The firmware change made in June, 2015 is unrelated to the 5 Card Cash game issue," said Cole, rejecting Farricker's claim that the work was unannounced. "Scientific Games routinely notifies CLC lottery of all firmware implementations, including this change."
Still, Scientific Games did not get around to fixing the slow software until October, around the time that prize expenses were discovered to be unusually high. Once a Lottery security officer was able to duplicate the cheating scheme on a training terminal on November 4, 2015, the vulnerability finally became apparent. It was further confirmed two days later when a Consumer Protection inspector noticed large stacks of winning "5 Card Cash" tickets at two vendor terminals.
"The CLC informed Scientific Games of the retailer misconduct issue and requested a software change on Friday, November 6, 2015," Cole said. "On Tuesday, November 10, 2015, the CLC tested the software change delivered by Scientific Games to resolve the issue."
But two days later, Anne Noble, then-president of the Lottery Corporation and now an adviser to the board as it seeks a new president, suspended the "5 Card Cash" game.
"The Lottery machine was created in 2008, when it was built by Scientific Games, which has been our vendor for years," Farricker said in an interview. "5 Card Cash was a confluence of completely unrelated issues that came together in an opportunity for someone with fraud on their minds."
Cole declined to answer questions from Hearst Media on:
- The methods used in January, 2015 to determine that the customer-history screen did not increase risks.
- The estimated amount of money allegedly defrauded.
- When it realized the June, 2015 equipment installation slowed terminals down further and why it waited until October to fix it.
"Scientific Games has successfully implemented instant-win games similar to 5 Card Cash in multiple states with no reported issues," Cole said. According to the company's June quarterly report total gambling revenue was $42 million, compared to $450 million in the same period in 2015. Its assets totaled $7.5 billion, while debts totaled $8.1 billion.
According to campaign finance filings on the site OpenSecrets.org, Scientific Games International, based in Georgia, has contributed $755,665 to the Democratic Governors Association since 2004, including $75,000 in 2015. Since 2003 it has given $749,000 to the Republican Governors Association, including $75,000 in 2015.
Jonathan Harris, commissioner of the Department of Consumer Protection, declined to comment on the issue because it is still under investigation in his agency, which regulates the Lottery, licenses its 140 employees and oversees more than 2,800 vendors.
Farricker said that the weakness in the game might have been discovered early in its 18 months of operation, because shortly after 5 Card Cash started, a predicted 68-percent payout turned out to be in the low-70s.
"It's distinctly possible that some people were doing it right from the beginning," Farricker said. "When it got into the spring and summer of 2015, it looked like word really got out, but I don't think any of the investigations have shown that store A said to store B 'look, we have this awesome thing going on.'"
The state, Farricker said, still made a million dollars a month in profits on the game. "Connecticut made less money than what they should have. It was surprisingly popular."