“The Lottery, with its weekly pay-out of enormous prizes, was the one public event to which the proles paid serious attention. It was probable that there were some millions of proles for whom the Lottery was the principal if not the only reason for remaining alive. It was their delight, their folly, their anodyne, their intellectual stimulant. Where the Lottery was concerned, even people who could barely read and write seemed capable of intricate calculations and staggering feats of memory. There was a whole tribe of men who made their living simply by selling systems, forecasts, and lucky amulets. Winston had nothing to do with the Lottery, which was managed by the Ministry of Plenty, but he was aware (indeed everyone in the party was aware) that the prizes were largely imaginary. Only small sums were actually paid out, the winners of the big prizes being nonexistent persons.” ― George Orwell, “Nineteen Eighty-Four: A Novel” (1949)
The state lottery system initially was advertised as a way to help schools in that state. As far as I know or can tell, schools have not been improved.
At minimum, lotteries work as a regressive tax that fleeces the poor. In fiscal year 2018, Americans spent $77.7 billion on various lotteries. In recent years, new lottery apps emerged, such as Lottery.com and Jackpocket, that allow people to purchase draws over their smartphones. Payoff percentages are extremely poor relative to other forms of gambling.
But the problem goes far beyond exploiting the poor with bad odds. On some occasions, the actual lottery draw itself has been compromised by fraudsters. The 1980 Pennsylvania Lottery scandal involved weighting balls in The Daily Number.
The Eddie Tipton Heist
The Hot Lotto fraud scandal of 2017 involved the head of the Multi-State Lottery Association’s (MUSL) IT security, Eddie Tipton. The numbers were generated by a cryptic two-line software code Tipton had planted in his employer’s computer system at the Multi-State Lottery Association.
The office building was virtually empty as Tipton ran test after test, zeroing in on the possible winning numbers for an upcoming $4.8 million lottery jackpot drawing in Colorado.
His code would let him narrow the drawing’s winning odds from one in 5 million to one to 200.
And, over time, it would allow him to hijack at least five winning drawings totaling more than $24 million in prizes in Colorado, Wisconsin, Iowa, Kansas and Oklahoma. It’s reportedly the biggest lottery scam bust in U.S. history.
The largest jackpot, a $16.5 million Hot Lotto prize in Iowa in 2010, was never paid. And ultimately, it would be the one that would do Tipton in.
Tipton says the lottery system remains fatally flawed. State law prohibits felons working for the Iowa Lottery. But that law does not apply to MUSL employees, as Tipton had a felony rap sheet.
Other Unlikely ‘Winners’
In July 1991, infamous Boston mob boss James “Whitey” Bulger hit the jackpot. He won more than $14 million in the Massachusetts State Lottery. Bulger, then 61, bought the ticket with three friends and split the winnings. The liquor store where Bulger purchased the winning ticket was a shop he once owned.
Pajama coinkydink people are asked to believe Jeffery Epstein’s LLC won $41 million in an Oklahoma lottery.
Gérard Lhéritier in 2012 won the largest-ever EuroMillions lottery jackpot totaling 170 million euros. He’s currently under investigation for running a Bernie Madoff type of Ponzi scheme using rare manuscripts. Investigators in 2015 claimed he defrauded his clients of more than a billion euros.
The French government seized Lhéritier’s collection and auctioned the works to reimburse investors. Among the collection was “120 Days of Sade,” which is said to be the most obscene literature ever written. Rather than auction it, the French government declared it a national treasure so it would not be allowed to leave the country.
As the chart below shows, Mark Mattioli won not once, but twice- $100,000 on Sept. 16, 2011 and $50,000 on Dec. 20, 2013. Mattioli’s son, James Mattioli, was an alleged victim in the Sandy Hook event on Dec. 14, 2012.
Signs of Malevolence in Running Lotteries
The California State Lottery has paid more than $500,000 to settle lawsuits filed by two former investigators who claimed they were fired for calling attention to jackpots they believed the lottery improperly awarded to recipients who could not prove they were winners. The two ousted lottery cops had flagged a $2 million jackpot in 2015 and a $750,000 prize in 2016 that they argued should not have been paid.
Incredible Coinkydinks in North Carolina
As the Charlotte Observer reporter, numerous people have been repeatedly winning the lottery and/or large jackpots.
Ralph Havis of Greensboro has won more than $600 55 times since 2008. He won $150,000 in 2014, another $150,000 in April of this year and then $1 million in May. A Virginia Tech statistician put the odds, if Havis was playing straight up, at “less than 1 in 1 trillion, trillion, trillion.”
It’s inconceivable that many of them are not gaming the system, yet North Carolina Education Lottery officials look the other way and say the winners are just very lucky people.
Cecil Etheridge, the brother of former congressman Bob Etheridge, beat odds of one in 1,143 some 30 times.
Everyday Clerk Swindles
Some locations require the patron to hand the lottery ticket to the cashier to determine how much they have won, or if they have won at all. The cashier then scans the ticket to determine one or both. In cases where there is no visible or audible cue to the patron of the outcome of the scan, some cashiers have taken the opportunity to claim that the ticket is a loser or that it is worth far less than it is and offer to “throw it away” or surreptitiously substitute it for another ticket. The cashier then pockets the ticket and eventually claims it as their own.
Delany Ann Schaffer, 27, is accused of “slightly scratching” the bonus box on lottery tickets while working at the KenJo Market at 404 East Emory Road. She placed the losing tickets back in the display case to sell to hapless customers and kept the winning tickets for herself, an arrest warrant states. Schaffer was caught after a man who purchased several tickets noticed they had been tampered with and contacted a fraud investigator at the Tennessee Lottery.
No Transparency Opens Up Path to Fraud
The director of the Wisconsin Lottery suggested that keeping the names of lottery winners private could hurt player security and increase lottery fraud.
“Although the advantage to winners of remaining anonymous is apparent, the disadvantage to players, lotteries and other stakeholders are less obvious, frequently overlooked and of great merit,” Wisconsin Lottery Director Cindy Polzin said.
During a public hearing Wednesday on a bill that would keep the names of lottery winners private, Polzin said that past lottery fraud attempts were identified because the winners’ names were made public. Lawmakers considering the legislation also on Wednesday signaled skepticism of the measure, which has also drawn criticism from open government advocates.
Assembly Bill 213 would prohibit lottery ticket retailers, the administrator of the state lottery and the Department of Revenue from disclosing the name and personal information of a lottery prize winner who requests confidentiality.
Anonymity for lottery winners is currently allowed in six U.S. states: Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina.