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N.C. Lottery chief refutes state study

North Carolina LotteryNorth Carolina Lottery: N.C. Lottery chief refutes state study
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By Alice Garland, executive director of the N.C. Education Lottery

One benefit of a state lottery is that as North Carolinians win the lottery, their prize money is subject to the collection of any debts owed to state and local governments.

The lottery makes every effort to ensure all debts are collected from every prize, $600 or more. No exceptions. So far, more than $11 million that would have gone uncollected has been collected from lottery prizes. That's a benefit to all whom the money was owed to.

Since winning lottery tickets are a bearer instrument — as they are in all states — there's been some speculation recently that a large number of North Carolinians are selling their winning tickets to avoid having debts collected from their prize money. One recent report contended that a "rough estimate" could add up to $1 million a year going uncollected.

(See Study: N.C. Lottery scammers have cheated state out of $7 million, Lottery Post, Dec. 7, 2016.)

The analysis was done by the state's Fiscal Research Division, the non-partisan fiscal and policy analysis arm of the legislature. It used lottery records but had no input or review from the lottery, and greatly overstated the extent of any problem that could exist. It contained a major error and used flawed assumptions.

The error involved double and triple counting of lottery winners and prizes. The analysis looked at multiple wins over three different time periods — one year, two years, and three years — and totaled wins from all three periods. Based upon the lottery's review of the analysis, the same wins were in each sample and thus counted two or three times. An accurate analysis would count each win only once, adding only the additional wins that occurred during the longer time periods.

Then, bad assumptions compounded the extent of the error.

One assumption was that all those multiple wins involved fraud committed to avoid debts. Over time, people who play the lottery regularly can win prizes regularly. The wins are random. They take luck. But they will happen. Players who do win frequently often put some of their prize money into purchasing more tickets. Without knowing the frequency of play, it would be difficult to determine if the wins were luck or fraud.

Then, an assumption was made that all such multiple wins involved a debt that had gone uncollected. Looking at the claims involved in the analysis you see this assumption is just wrong. Debts were collected from some of those claims. Some winners came back with more prizes, and had more debts collected from those new wins.

The lottery is open to ways to improve its operations, including the law governing debt collections. No one should be allowed to skirt the law. But just because something could happen, doesn't mean it is happening a lot. It's important on matters of public policy that the people are presented with accurate information and facts.

It is unfortunate that this "rough estimate," based on a miscalculation and flawed assumptions, tarred so many North Carolina lottery players as being dishonest. The lottery's experience is most winners come right in to collect their prizes and feel fortunate their good luck pays any debts they owe.

Charlotte Observer, Lottery Post Staff

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7 comments. Last comment 23 days ago by jmidgette.
Page 1 of 1
music*'s avatar - nw bookeep.jpg
Happy California
United States
Member #157856
August 2, 2014
1549 Posts
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Posted: December 26, 2016, 11:48 am - IP Logged

 Alice Garland has written a very good letter in defense of her State's lottery. North Carolina lottery players should be reassured of their lottery. 

 I believe that Marie Holmes is no longer in North Carolina. God bless her and her kids.

 Chi ha danari, trova cugini. (He who has money finds many cousins.) Italian proverb

    Slick Nick's avatar - Lottery-035.jpg
    Rochester
    United States
    Member #103282
    January 1, 2011
    606 Posts
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    Posted: December 26, 2016, 12:12 pm - IP Logged

    I believe if someone owes a debt, he/she should be bound to pay if it's a true debt owed. Take for instance "small claims" debts. Here in New York many small claims filed go uncollected like past rent due. I have been through this, will I get it, I doubt it. But yet there are people who win big chunks of money and forget they burned the landlord. So I think this law may have some substance.

    People who cheat and scam need and should be prosecuted. Many of us try to lead, live a legit life!

    Money is a terrible master, but a great servant...Smile

      Groppo's avatar - cat anm.gif

      United States
      Member #162631
      January 7, 2015
      537 Posts
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      Posted: December 26, 2016, 3:29 pm - IP Logged

      I believe if someone owes a debt, he/she should be bound to pay if it's a true debt owed. Take for instance "small claims" debts. Here in New York many small claims filed go uncollected like past rent due. I have been through this, will I get it, I doubt it. But yet there are people who win big chunks of money and forget they burned the landlord. So I think this law may have some substance.

      People who cheat and scam need and should be prosecuted. Many of us try to lead, live a legit life!

      .

      Yes, I agree, Mr. Slick Nick.

      To ALL Persons, Male and Female:

      I (who am just a regular citizen),  expect EVERY lottery player to pay what they owe to the
      local and Federal Governments. Also, to whatever else they've been determined liable.

      If I'm ever clued in to any acts of theft or robbery,   I WILL REPORT THEM.
      I'll not stand for watching/witnessing people (or any entities) get ripped off - no way, EVER.

      Mr. Groppo

       

       

      )

      • Don't chase the numbers you play.
      • Play only numbers you've already played, plus however many random picks.
      • But, ALWAYS the regular numbers you play.  This will make you a winner, not a chaser.
                (so far, though, I've yet to win any significant lotto prize)
        Avatar
        NY
        United States
        Member #23835
        October 16, 2005
        3502 Posts
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        Posted: December 26, 2016, 4:15 pm - IP Logged

        "Alice Garland has written a very good letter in defense of her State's lottery."

        No she hasn't. All she did was present an argument, which sounds plausible, claiming that the amount of money the study estimated isn't being collected may be higher than the amount that's really lost as a result of winning tickets being claimed by people who didn't actually buy them.

        Of course the lottery doesn't need to be defended, at least not in relation to  people selling winning tickets in an effort to avoid paying debts. The lottery just sells tickets and pays winners, and for wins that aren't fairly substantial it's not practical to determine whether or not the claimant is the original owner. Still, when people win several times the only realistic possibility is that very few of them actually beat the extremely high odds and that most of them got their winning tickets from other people. The original study was apparently related  to the legislature's interest in trying to reduce the loss, whatever it may be, by making it illegal to resell winning lottery tickets. It may not make fiscal sense to spend much on enforcement, but I can't think of a sensible argument not to make it illegal to resell winning tickets.

          music*'s avatar - nw bookeep.jpg
          Happy California
          United States
          Member #157856
          August 2, 2014
          1549 Posts
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          Posted: December 26, 2016, 4:35 pm - IP Logged

           I just wonder why we Americans have not learned how to sell lottery tickets the way that Australian, Europeans, and the U.K. do it.

           There is room for improvement. 

          Patriot

           Chi ha danari, trova cugini. (He who has money finds many cousins.) Italian proverb

            Groppo's avatar - cat anm.gif

            United States
            Member #162631
            January 7, 2015
            537 Posts
            Offline
            Posted: December 26, 2016, 4:41 pm - IP Logged

             I just wonder why we Americans have not learned how to sell lottery tickets the way that Australian, Europeans, and the U.K. do it.

             There is room for improvement. 

            Patriot

            .

            Mr. Music*,

            Indeed, I wonder how they do it.  Would you care to share?

            Thank you,

            Mr. Groppo

            • Don't chase the numbers you play.
            • Play only numbers you've already played, plus however many random picks.
            • But, ALWAYS the regular numbers you play.  This will make you a winner, not a chaser.
                      (so far, though, I've yet to win any significant lotto prize)
              jmidgette's avatar - batman38

              United States
              Member #82485
              November 14, 2009
              186 Posts
              Offline
              Posted: December 26, 2016, 10:55 pm - IP Logged

              .

              Yes, I agree, Mr. Slick Nick.

              To ALL Persons, Male and Female:

              I (who am just a regular citizen),  expect EVERY lottery player to pay what they owe to the
              local and Federal Governments. Also, to whatever else they've been determined liable.

              If I'm ever clued in to any acts of theft or robbery,   I WILL REPORT THEM.
              I'll not stand for watching/witnessing people (or any entities) get ripped off - no way, EVER.

              Mr. Groppo

               

               

              )

              I Agree!

              AKA DIVA I