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Michigan Lottery has few options to stop players who spend millions

Mar 9, 2020, 9:23 am

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Michigan LotteryMichigan Lottery: Michigan Lottery has few options to stop players who spend millionsRating:

In June 2017, Viktor Gjonaj walked into a sleepy retail strip on Dequindre Road in Sterling Heights.

He wasn't heading for the massage parlor, or the small Indian and Pakistani grocery store or restaurant or the hair salon. Instead, he went into the Michigan Lottery claim center at the northern edge of Sherwood Plaza.

There, he showed his driver's license and Social Security card, completed a claim form, and left $2.5 million richer with a check cut to him as the prize for the 500 winning Daily 4 tickets he had for the June 18 evening drawing — 7-8-0-0 was the winning number — purchased at Picolo's Liquor & Deli in nearby Shelby Township.

It was the first interaction the Michigan Lottery says it had that stood out with the 42-year-old commercial real estate industry veteran, and it wouldn't be the last. Less than five months later with the Nov. 14 evening drawing (winning number: 2-0-7-6) he would repeat that process with another 800 tickets from Picolo's, leaving $4 million richer.

Ultimately, he ended up claiming no less than $28 million in winnings on the twice-daily game in less than a year, and the state enterprise fund, which earlier this year announced its first-ever $1 billion contribution to the School Aid Fund, some of which would have been funded by Gjonaj's rampant play, instituted unprecedented measures in 2018 to try to slow his gambling by limiting terminals to $5,000 in play per day.

But it didn't stop the founder of Troy-based Imperium Group LLC, a real estate company he started in October 2017, a year after state lottery officials first flagged a high amount of play at Picolo's that has largely been attributed to Gjonaj.

Instead of slowing down as intended, he seems to have attempted to ramp up his play. Gjonaj allegedly recruited at least one person, Gregory Vitto, to work for him full time — ultimately with a job description that only ended up being to play the lottery. To get around the $5,000 limit, Vitto went about establishing what he described in court testimony as a small network of Macomb County party stores at which he would play Daily 3 and Daily 4 to the tune of $80,000 a day for months. Vitto also suggested there were others who played on Gjonaj's behalf.

In his wake, Gjonaj, who hasn't been seen since the summer, allegedly left at least $15 million from investors unrepaid, with speculation that there could be much more owed to those not inclined to seek their money back through legal channels.

'This player'

Michigan Lottery officials speak clinically about Gjonaj and almost never identify him by name.

"This particular player" or "the player" or "this player" is the only language they use to refer to him publicly because state law allows players to remain anonymous, implicated in a $15 million-plus Ponzi scheme or not.

The only official confirmation that the $3.8 billion fund even knows who Gjonaj is comes in the form of an email Benjamin Vogel, who worked in the Michigan Lottery security division, wrote to James Grady, a detective with the Michigan State Police, two years ago. It was obtained by Crain's through a Freedom of Information Act request.

"Concerning our previous conversation, the retailer is Picolo's Party Store at 13459 23 Mile Rd. in Shelby Township," Vogel wrote to Grady on Feb. 7, 2018. "From 1/1/17 through 2/5/18, Picolo's generated $19,277,352 in Daily 4 sales."

"Viktor Gjonaj is said to work in commercial real estate out of Metro Detroit," the email says.

Michael Shaw, Special Enforcement Section commander, said in mid-January that the Michigan State Police does not have an open investigation into Gjonaj. Michigan Attorney General Dana Nessel's office is reviewing one of the Oakland County court cases.

Aric Nesbitt, who is now a Republican state senator but at the time was the state's lottery commissioner, remembers Gjonaj and the bureau's response.

"As I recall, I believe we took actions at the lottery to try to slow him down and then everything that we read in the news showed him to be some legitimate developer. It seemed like most people at the time thought he was a successful businessman," Nesbitt said in an interview.

"It sounds like his Ponzi scheme was front and center. It sounds like he was chasing his tail. The guy was winning big, I had my people do an investigation, provide recommendations, and I feel like we followed through in trying to provide both responsible gaming and also making sure that everything was followed in our processes."

State: Few options

The state says that all Daily 3 and Daily 4 ticket purchases are anonymous, so it had few, if any, options for preventing a single player from playing too much.

"The anonymous nature of a ticket purchase makes it nearly impossible to determine who is purchasing tickets, and to what extent, until the player presents themselves in a claim center with a winning ticket," the lottery said in emailed responses to questions from Crain's. Requests for information and interviews were directed to a lottery spokesman.

However, after winning $4 million in November 2017 coupled with the $2.5 million win in June five months earlier, lottery officials say that the state had "a better picture of this player's level of play."

At that point, an internal evaluation of how to reduce Gjonaj's Daily 3 and Daily 4 spending was conducted. However, the lottery says it does not have a record of how long the evaluation took or who was involved in it.

"The amount a person may spend on gambling or other activities is subjective to that person," the lottery said in response to emailed questions. "The claim was reported to management in November based solely on the large number of tickets being redeemed."

"Other than the large number of tickets being redeemed at one time, there did not appear to be anything unusual."

It's not known how Gjonaj was able to win so frequently in a game that can have 1 in 10,000 odds of winning a maximum $5,000 prize. The way Gjonaj played, however, improved his odds to 1 in 416 and 1 in 833, according to the lottery.

Experts: Do more

The end result of the lottery's internal evaluation was a cap on terminals play statewide, and a few responsible gaming pamphlets.

The limit and the literature did not work.

"If anybody calls the lottery and tells the lottery they have a gambling problem, and they need help, the lottery will send them to what is available in the state, and I gotta tell you, it isn't a lot," said Michael Burke, president of the Michigan Association on Problem Gambling (see related story). His organization has Michigan Lottery staff on its board.

"Yeah, for a problem like this, we're sending out a pamphlet. I deal also with gamblers who might go through $10,000 in a few months' period, and they get the same thing. There, their play starts to vary, they end up with higher amounts of playing and the lottery will send them the same pamphlet. That's what they have available."

It wasn't nearly enough, said Les Bernal, national director of Washington, D.C.-based Stop Predatory Gambling, a 501(c)(3) advocacy group.

"He's obviously showing that he wagered an enormous sum of money to get this. And what did they do? The answer is nothing," said Bernal.

"It's appalling on both counts. If he was rigging the machine and they didn't cut it off, it's appalling. If they didn't take action to cut off a guy who clearly had suffered from mental health problems, that is equally outrageous and disgusting. The lottery needs to be held accountable. I think in either scenario, the Michigan lottery has some serious questions to answer."

Crain's Detroit Business

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26 comments. Last comment 2 months ago by darthfury78.
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Raven62's avatar - binary
25
New Jersey
United States
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June 28, 2005
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Posted: March 9, 2020, 10:08 am - IP Logged

Thay want You to Play the Games, but they Don't Want You to Win!

A mind once stretched by a new idea never returns to its original dimensions!

Catch-22: A dilemma or difficult circumstance from which there is no escape because of mutually conflicting or dependent conditions.

Corruptissima re publica plurimae leges: When the republic is at its most corrupt the laws are most numerous.

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    Raleigh, NC
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    May 28, 2015
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    Posted: March 9, 2020, 11:17 am - IP Logged

    I have always been told that most, if not all lottery states, have what is called an insurance " cap " or a certain maximum number of tickets that can be bought on any one number in pick 3 and pick 4. For example, the number 463 in pick 3 or 6228 in pick 4 cannot be bought more than 150 times in a given draw. I was always told that lotteries have this special law included in their rules of the game set by the state legislature or whoever enacted the lotteries in their states so that a person couldn't do exactly this - which is to go buy a 1,000 draws of the same pick 4 number and then they might hit, which would severely hurt their profit for that day in that game. Because the result of this, is that the person would end up winning $ 5,000,000 million dollars on a pick 4 draw by himself. Just an example.

      Avatar

      United States
      Member #204616
      February 18, 2020
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      Posted: March 9, 2020, 11:32 am - IP Logged

      Wow, he had 500 winning P4 ST8 tix. Good for him. To win that much and often, he must have some mad skills and loot to play that much.

      This article indicates that MI Lotto can't stand perfectly legal highroller winners and they are trying to stop it. BS

        Avatar
        Simpsonville
        United States
        Member #163184
        January 22, 2015
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        Posted: March 9, 2020, 12:04 pm - IP Logged

        Thay want You to Play the Games, but they Don't Want You to Win!

        I Agree!LoverThis article put a big old smile on my face. 

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          Louisiana
          United States
          Member #191895
          August 27, 2018
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          Posted: March 9, 2020, 12:40 pm - IP Logged

          Louisiana sells out of numbers all the time. They only have a set amount of each available number set. You have to buy what you want early in the morning when the terminal turns on basically.

          All number sets are contenders until the drawing occurs.

            TheGameGrl's avatar - Lottery-012.jpg
            A long and winding road
            United States
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            June 10, 2005
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            Posted: March 9, 2020, 2:47 pm - IP Logged

            Louisiana sells out of numbers all the time. They only have a set amount of each available number set. You have to buy what you want early in the morning when the terminal turns on basically.

            True.

            My state does it by county. So it ratios by county. So if you are lucky to live in Philly or Pitt, you can buy more of the same #''s. 

            Statewide it has a cap. 

            I don't think the fellow is mentally ill or whatever they are labeling him with. He found the loophole in the mist of him dodging his investors. ...why he is presidential material ;)

            *3433 7228 5050 6166 2228 3013*

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              Norton, Ohio
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              December 3, 2018
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              Posted: March 9, 2020, 4:18 pm - IP Logged

              Great story. This guy was winning big and they tried to put a cap on his play. What the heck? He wasn't doing anything illegal, so why the cap? They said he owes investors but they haven't taken legal means yet. So how do they know what's actually owed. They're trying to paint a bad picture of the guy. Someone who lowers the odds to 416-1 on a 10,000-1 game is doing pretty good. Hurray!

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                Simpsonville
                United States
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                January 22, 2015
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                Posted: March 9, 2020, 6:45 pm - IP Logged

                Louisiana sells out of numbers all the time. They only have a set amount of each available number set. You have to buy what you want early in the morning when the terminal turns on basically.

                Just read on cnn that a guy was pulled over with expired tags in Louisiana---23 years late..  Tag #493...lucky numbers?

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                  Kentucky
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                  February 14, 2006
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                  Posted: March 9, 2020, 8:16 pm - IP Logged

                  purchased at Picolo's Liquor & Deli in nearby Shelby Township.

                  A few years ago while visiting near Shelby Township, Michigan, the MM jackpot was near a record and bought tickets at a gas station across the road from where the winning ticket was purchased. Might be a lucky area.

                  Mister we could use a man like Herbert Hoover again

                    grwurston's avatar - Lottery-012.jpg
                    Win Today.
                    bel air maryland
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                    Posted: March 9, 2020, 8:24 pm - IP Logged

                    It's not known how Gjonaj was able to win so frequently in a game that can have 1 in 10,000 odds of winning a maximum $5,000 prize. The way Gjonaj played, however, improved his odds to 1 in 416 and 1 in 833, according to the lottery.

                    1 in 416 odds is for a singles box hit, and 1 in 833 odds is for a doubles box hit. It's written on every, How To Play Pick 3 - Pick 4 pamphlet, that every state lottery puts out.

                    The same exact odds for any Pick 4 player. Sounds like the Mi. lottery is trying to do some spin.

                    "You can observe a lot just by watching." Yogi Berra, Hall of Fame baseball player.

                    The numbers will tell you what numbers to play. Pay attention to the numbers.

                    Thinking outside the box, will get you straights.

                      Todd's avatar - Cylon 2.gif
                      50
                      Chief Bottle Washer
                      New Jersey
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                      Posted: March 9, 2020, 8:55 pm - IP Logged

                      It's not known how Gjonaj was able to win so frequently in a game that can have 1 in 10,000 odds of winning a maximum $5,000 prize. The way Gjonaj played, however, improved his odds to 1 in 416 and 1 in 833, according to the lottery.

                      1 in 416 odds is for a singles box hit, and 1 in 833 odds is for a doubles box hit. It's written on every, How To Play Pick 3 - Pick 4 pamphlet, that every state lottery puts out.

                      The same exact odds for any Pick 4 player. Sounds like the Mi. lottery is trying to do some spin.

                      He's probably wheeling straight bets if he's playing so much money.  Same as box, but with higher risk/reward.

                       

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

                       

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

                        grwurston's avatar - Lottery-012.jpg
                        Win Today.
                        bel air maryland
                        United States
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                        April 24, 2010
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                        Posted: March 9, 2020, 9:20 pm - IP Logged

                        He's probably wheeling straight bets if he's playing so much money.  Same as box, but with higher risk/reward.

                        We can play Pick 4 combo bets here in Md. It would be cool to know how much he won on singles vs doubles. Straights with doubles would be a lot easier than singles, if he was picking his own numbers.

                        "You can observe a lot just by watching." Yogi Berra, Hall of Fame baseball player.

                        The numbers will tell you what numbers to play. Pay attention to the numbers.

                        Thinking outside the box, will get you straights.

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                          United States
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                          April 19, 2018
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                          Posted: March 9, 2020, 9:41 pm - IP Logged

                          The lottery hate to see people win.when you loose big it's cool .Just win and it's maybe you cheat,or could be a scheme.Dont get me wrong nothing is wrong with lottery officials investigate any activity or huge wins to make sure it's legit. But when they find out it's legit back off greedy lottery officials. I am happy this guy game the system. Hope the pozi scheme is false  or the lottery trying to destroy the guy because he out played the odds. Congratulations Viktor  Gjonaj on your winnings .

                            Nikkicute's avatar - wi lotto3.jpg
                            Wisconsin
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                            February 17, 2012
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                            Posted: March 10, 2020, 2:37 am - IP Logged

                            The only problem I see here is using investors money to play the lotto, if it were his own money, let the man play!!

                            "Some were owed millions, with Gjonaj allegedly having used their investments to fund his lottery addiction, and he had no way of paying it back. The Daily 3 and Daily 4 winnings had dried up"

                            Sounds like an up and coming episode of AmericanGreed.