Massachusetts State Treasurer Tim Cahill plans to tighten Lottery regulations following an audit report issued Wednesday that shows winners often employ suspicious ticket cashing methods to avoid paying millions of dollars in taxes.
''As a result, millions of dollars in taxes were evaded, lost and not reported that could have been used for much-needed state and municipal programs,'' state Auditor Joseph DeNucci said in his report.
DeNucci conducted the ''transition audit'' at the request of Cahill, who took office in January.
The audit called on Lottery officials to strengthen controls in order to protect public confidence in the $4.2 billion-per-year Lottery.
DeNucci questioned, as he has in prior audits, the status of Raynham Park, which is the only one of 7,300 sales agents that can cash ticket prizes of more than $600.
Under Raynham Park's contract with the state, it can cash ticket prizes up to $25,000.
Last year, 12 people made half the claims over $600 at that dog track, claiming $2.6 million in prize money. That raises suspicions that a small number of people who don't pay taxes are paying cash to buy winning tickets from legitimate players who want to avoid taxes.
DeNucci recommends changing the tax withholding threshold on winning tickets to stop the problem, and Cahill's office said they are looking into that possibility.
''It's definitely high up on our radar screen,'' Cahill spokeswoman Karen Sharma said. ''We're revisiting the specifics of the contract with the Raynham Greyhound Park. We're weighing a few options on how to move forward and address this issue.''
Raynham has enjoyed its special Lottery status for two decades. Gary Temple, Raynham's assistant general manager, said the track complies with all laws, and should be credited with providing a service to the state.
''Until recently, we cashed all tickets from around the state when the Lottery was closed,'' said Temple, adding that he's had no talks with Cahill's office, which oversees the Lottery.
The professional cashers, or ''10 percenters,'' so-called because they charge legitimate winners 10 percent of the winnings while the real winners avoid up to 30 percent in taxes should be dealt with by the Department of Revenue, Temple said.
''A 10 percenter still has to put their name and number (on a claim),'' he said. ''We comply with the rules and regulations of the law. We have to take two sets of ID. There's no dead man's ID.''
Cahill has hired an internal auditor, Sharma noted, and plans to share more information with the DOR and Internal Revenue Service. But the Lottery can only do so much, she said.
''The Lottery is not an enforcement agency. We have no legal means or ability from prdventing somebody from cashing a ticket for someone else,'' she said.