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California Store Owners WInning More Then They Should On Scratch Offs
Saturday November 1,2014 : LOTTERY ROW BREWING IN CALIFORNIA
Media reports query large number of wins at retail stores.
Investigations by the San Jose, California media into the high incidence of state lottery wins by retail ticket selling store owners could trigger an official enquiry.
Among the instances under the media spotlight are:
* Dolce Espresso in San Jose has reported 212 winning tickets worth $600 or more in the past decade. The luckiest winner is store owner Minh Nguyen. He's claimed 87 of them.
* Jelly Donut in Daly City, owner Frank Huynh claimed 15 winning Scratchers worth a thousand bucks each, in just the past two years.
* MJB Video in Los Angeles, where store owner Angela Kouch and her frequent customer Jose Ruiz combined have claimed 380 wins at her store.
* Hi-Crest Liquor & Junior Market: owner Ali Ibrahim is also winning big. He and his family have cashed in almost all the big winners purchased at his store – valued at more than $300,000. He won $600 or more 192 times and has gleaned $304,000. Most of it came from tickets purchased at his own store. His relatives - they won 166 of the 188 winning tickets - purchased at his store, which works out at 88 percent of the winning tickets.
Data obtained from the California Lottery shows many of the most frequent winners in California are retailers, the media report.
UCLA math professor Skip Garibaldi analysed the numbers unearthed in the enquiry and said of the frequent wins: "I definitely would say that some of them defy the odds." He suggested that if the store owners were buying their own tickets they must be spending a lot of money.
Garibaldi gave an example in Frank Huynh at the Jelly Donut: "Over his 642-day span of collecting prizes I think he was spending about $1,300 a day," said Garibaldi. That's $840,000 total to win $32,000."
Using Ibrahim as another example, Garibaldi calculated that Ibrahim must have spent about $2 million on Hot Spot, which is his preferred game...$2 million to win $304,000.
Garibaldi suggests that such numbers are improbable: "You can get lucky once, you can buy a mega millions ticket and you can win. But if you win twice you either spent a lot of money or something is up," he said.
Approached for an explanation, Stephen Tacchini, the chief enforcement officer for the California Lottery said that discounting may be in play, explaining that some customers sell their winning tickets to store owners for less than they are worth.
"People have liens or judgments, could be child support payments. They know if the tickets go into a claim, part of that will be garnished. Unfortunately there are some unscrupulous retailers out there that take advantage of these situations," he said.
Another way an unscrupulous retailer could be claiming so many wins is criminal and involves cheating the customer out of his winning ticket, the official said. In stings conducted randomly across the state, lottery investigators posing as customers use a decoy winning ticket to regularly test the retailers' honesty.
But the bad apples in this area are rare; out of 22,000 retailers the routine testing delivers 98 to 99 percent compliance, he revealed.
Pressed for interviews, most store owners declined to respond or denied any wrongdoing
The lottery tightened up on retail operations in 2007, and now all winners of $600 or more have to disclose if they are owners or employees of stores. Winning tickets of more than $600 are taxable and have to be cashed at the California Lottery District Office, where officials deduct federal taxes and any child support or money owed to the state.
Some ticket holders may wish to avoid that process and are therefore prepared to sell their winning tickets to the shop owner at a discount. And in some cases blatantly dishonest retailers could fool the ticket holder into believing that his win is lower than it really is, or not a winning ticket at all, and then claim the win themselves.
Lottery officials also conduct stings in which an undercover officer posing as a customer hands a store clerk a winning ticket, only to have him come back and say it's a loser.
In the Hi-Crest case, lottery enforcement official Tacchini said that monitoring has shown nothing untoward in Ibrahim's conduct.
"We've probably done at least 10 investigations in that location ... because we want to test the integrity of the retailer," he said. "I can draw some conclusions, but there's nothing we found that he's doing wrong. He may be purchasing tickets from customers, which is a violation of our regulations. We know that does occur."
Lottery officials emphasise that there has to be credible evidence of wrongdoing before they can act to prosecute or deprive a store owner of ticket selling privileges.
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