‘Nobody’s that lucky’—except in Florida’s lottery?

Palm Beach Post ferrets out lottery fraud, prompts tightening of "meager" safeguards

MIAMI — When The Palm Beach Post’s Lawrence Mower asked the Florida Lottery for information on winners from 1997 to 2013, the newspaper hit the jackpot. Mower’s months-long investigation, published March 30, found that over the last decade some 200 people—“against astronomical odds”—cashed in tens or hundreds of winning tickets worth $600 or more. What he uncovered was less likely luck—and more likely crime. It turns out a whole lot of the winners were store owners or clerks.

Florida’s most prolific winners might be too lucky, and Florida’s Lottery can’t explain why, a Palm Beach Post investigation has found. The winning patterns raise red flags that have led other lotteries and police to uncover widespread ticket theft by store employees, neighborhood “ticket brokers” who helped winners avoid taxes, even drug lords laundering money.

These people are not the lucky jackpot winners you see on the news. Rather, they’re flying under the radar, cashing in tens or hundreds of tickets, each usually worth between $1,000 and $20,000. Six of the top 10 winners are … store clerks and owners who sell lottery tickets.

They’re defying the odds. But their patterns also defy logic.

The stores that sell lottery tickets in Florida all have a machine that will scan a ticket and determine if it’s a winner. People who buy the tickets bring them back to stores to see if they’ve won. But they’re often relying on the store clerks to tell the truth about what the machine says. So the clerks can tell the buyer, “Hey, sorry man, better luck next time,” and then pocket the guy’s winning ticket.

Unlike other states, Florida lottery officials don’t keep track of the store owners and clerks who sell lottery tickets, and they have done very little to catch people who may be stealing winning tickets from people who play the lottery. Mower noted that California runs far more undercover stings than Florida does—and Florida’s lottery, per Mower, is the second largest in North America.

Mower first asked for the lottery winners after reading a story in Wired about a statistician who had figured out how to cheat at scratch-off games in Toronto and alerted officials there of the flaw. The story made Mower wonder if anyone had found a similar flaw in one of Florida’s scratch-off games. He didn’t find that, but instead found evidence that some people were violating the law on all kinds of games.

“It was really just done on kind of a whim,” he told me. “I guess we got lucky.”

Mower, who came to the Post from the Las Vegas Review-Journal, said he was surprised by the number of winners who had won the smaller games multiple times.
“The Vegas part of me thought, if this was a casino, they’d get you in a back room with no cameras to ask you how you were winning so much,” he said.

The investigation, which Mower did with writers Fedor Zarkhin and Pat Beall and researchers Michelle Quigley and Niels Heimeriks, was really carefully designed.They couldn’t just look for people who had won a lot of money, because that data set would be full of people who had won once-in-a-lifetime big payouts. And they couldn’t focus on frequency, because that set would be full of people who played the same number 20 times one day and won.

They teased out the folks who appeared to be gaming the system by looking at how often people cashed tickets. Tickets worth more than $600 have to be cashed at a district office. If you played 20 tickets on the same number and won, you’d go to the office once and get all of your money. But if you’re stealing people’s tickets, you might go each time you won, a couple of times a week, perhaps. And while most lottery players are loyal to a certain game, and often buy their tickets at the same store week after week, Mower found that many of the frequent winners didn’t behave like typical lottery players.

“The results: Some people were making several trips per week to cash in tickets, in open defiance of the odds,” Mower wrote. “They were winning all kinds of games, from stores everywhere, and they were often store owners or clerks.”

Mower enlisted three statisticians to analyze the odds of the top ten winners the Post identified actually winning that often. The results were next to nil—“like picking one star out of 50 galaxies, then having your friend guess the same star on the first try,” as a statistician described one winner’s odds. So Mower tracked down some of those winners. One claimed to just be incredibly lucky, another said he dreams in numbers and one appears to be the victim of identity theft—he says he’s never won the lottery. Mower also tracked down one man who appears to be legitimately lucky—Mower told me he even got lottery officials to pull that man’s actual tickets out of a warehouse.

“That guy had an amazing winning streak,” Mower said.

It’s kind of hard to imagine people winning the lottery and not noticing, but Mower said it’s actually understandable. He explained that some of the games are so confusing, it’s hard to know if a ticket won anything. As part of the story, he bought a lot of lottery tickets to try to understand the system. And once he thought he’d won a small pay-out. He took the ticket to a store clerk he knew to check it, only to discover his ticket wasn’t a winner.

“That kind of put it in perspective,” he said. “You wonder, why would people rely on store clerks to do this for them. It’s because it’s really confusing.”

This package took a different path from most newspaper investigations, many of which are motivated by finding a victim, and then looking more deeply to find more victims and patterns of policy failures. But the lottery victims didn’t even know they were victims, so they weren’t clamoring for coverage.

But now they are. Mower said “the calls are pouring in” from people wanting him to check certain stores or clerks against his database. And the reporting has already yielded results: Lottery officials pulled machines from three stores last week, a state legislator has pointed to the story to demand changes, and the Lottery announced new safeguards.

Kudos to The Palm Beach Post for trying its luck on the lottery.

Editor’s note: Susannah Nesmith worked with Michelle Quigley while at The Palm Beach Post from 1992-1998.

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Susannah Nesmith is CJR’s correspondent for Florida and Georgia. She is a freelance writer based in Miami with more than 25 years working for regional and national outlets. Follow her on Twitter @susannahnesmith. Tags: , , , , , , , ,