Eugene DePasquale (D-York), a two-term Auditor General for Pennsylvania has announced a forthcoming investigation into the Pennsylvania lottery, a bureau in the Revenue Department. Multiple cases of repeat winners have been identified as the impetus for the investigation.
DePasquale intends for his investigation to appraise the competence of the department in running the lottery, and to ascertain whether they have done their due diligence in quelling fraudulent activity from their retailers and winners.
There has been much media attention on “high-volume” lottery winners recently, with news stories uncovering potential lottery frauds across different states which have come to light in the news media who have done their own investigations into lottery frauds.
The most egregious case involved an individual from the Boston area who purchased winning lottery tickets for pennies on the dollar; the genuine winners were often happy to get instant cash, instead of waiting and dealing with lottery taxes. The individual has been reported to have cashed out over $10.8 million on 7,300 winning tickets.
It is impossible not to think of Pennsylvania when one thinks of lottery fraud. In 1981, two individuals who were the host of the drawing show and one lottery official were convicted for conspiring on the 1980 lottery by using special ping pong balls to rig the drawing of the winning numbers. Pennsylvanians are understandably eager to erase their state’s association with lottery fraud.
Senior Citizens Benefit From State Lottery
DePasquale who plans to run for Congress justified his planned audit by alluding to the benefits of a trustworthy state lottery, especially to the state’s senior citizens. The lottery generates more than $1 billion per year to the state, which is earmarked for the welfare of its elderly. Some of the senior-oriented programs subsidised by lottery funds are: care services, rebates on selected taxes and discounts on prescription drugs. In June we also reported how casinos were looking to limit iLottery games.
Last fiscal year, $4.5 billion was spent by players on lottery tickets, and roughly $2.9 billion has been paid out as prizes. Recent controversies regarding high-volume lottery winners have compelled DePasquale to launch his audit to reassure the public that the prizes were claimed legitimately.
One key point of focus for DePasquale will be the selection and vetting process for the state’s vendor for instant lottery tickets and terminal-based games; currently, it has been reported that Pennsylvania spent $1.3 million in its evaluation of bids, but has yet to award a contract to a vendor, which will be worth at $1 billion.