Dateline NBC Stings Lottery Retailers

TV news show conducts investigation into clerks cashing in winning tickets

Published in CSP Daily News

NEW YORK --Dateline NBC last Sunday broadcast "How Lucky Can You Get?," an undercover investigation into lottery sales. The news program said that it obtained lists of top winners from 10 state lotteries and found that in many of those states, lottery retailers, clerks and their relatives are among the biggest winners. It then conducted a sting to find out why.

In Pennsylvania, a Philadelphia retailer cashed eighteen lottery tickets in three months for a total of $45,000, according to the report. In New Jersey, a retailer cashed 105 lottery tickets for more than $236,000. [image-nocss] In Illinois, it found one store where four employees and five of their relatives cashed a total of 556 winning tickets, for more than $1,600,000. In California, lottery investigators were seeing the same thing. In fact, in 2007, the five most frequent winners in California were retailers. One store owner in Los Angeles allegedly cashed 121 tickets for more than $160,000.

In many places, customers need to ask the clerk behind the counter to scan the tickets by using the lottery computer. For the show's undercover investigation in California, an investigator entered a store wearing a hidden camera and pretended to be an ordinary customer with a few of scratch-off lottery tickets. He asked the clerk behind the counter to check the tickets for him to see if any of them are winners. Unbeknownst to the clerks, one of the tickets was a guaranteed $1,000 winner, a special scratch-off ticket that the lottery investigators manufactured specifically for this investigation.The investigator played dumb, going off to shop in the store to give the clerk a chance to be alone when he or she electronically scanned the tickets. The clerk would the face the "moment of truth" of whether to tell the customer that the ticket was a winner.

Also, investigators said that they are beginning to see irregularities that could explain why some of those retailers end up cashing so many winning tickets. Dateline NBC said that it is called discounting. Discounting is when a retailer or a clerk will offer to buy someone's winning ticket from them for a reduced amount, such as $650 for a $1,000 winner, and submit it as a claim for themselves. This often occurs because customers want to avoid going through normal channels because they owe, for example, back taxes, court fees or child support; the state would automatically deduct it from their winnings.Most of the time, said Dateline NBC, the clerk or owner did the right thing. But at seven stores [out of 50], the clerks told the undercover investigator there were no winners.

Dateline NBC went back and confronted the clerks, several of whom ended up serving jail time for attempted grand theft (a misdemeanor). And several of the stores lost their lottery contracts.

According to Dateline NBC, the state of New York would not cooperate with the show, andit notified its lottery agents about the sting. One state official claimed that the show was trying to "entrap" retailers. Other states are following California's lead and conducting similar investigations, the report said.Dateline NBC added, "It should be noted that the vast majority of retailers are honest--and if you win, it's likely you're going to collect your prize."