In four months, the Lottery has found 16 incidents of possible fraud among winners

Virginia Mercury

In the first four months of tracking whether lottery winners are connected to stores that sell winning tickets, officials are investigating 16 suspicious instances out of 6,955 winners.

Winnings forms — which people must fill out if they win $600 or more — now ask if winners own, work at or are related to someone who owns or works at a store that sells lottery tickets. Since July, lottery staff found 85 winners with connections to a store, which was only about 1 percent of the winners.

“It will allow us to quickly identify misconduct,” Lottery Director Kevin Hall said at a board meeting Wednesday. 

The Virginia Lottery began tracking if people who won more than $600 were connected to a store where tickets are sold after an investigation by The Virginian-Pilot found that a select group of people appeared to frequently defy the odds on lottery prizes .

Based on The Pilot’s investigation, it doesn’t seem the games are unfair, Hall said, but the claims process can be manipulated.

“The Virginia Lottery is a trusted brand that’s been built over 30 years,” Hall said in an interview. “I have a responsibility to protect that brand.”

The agency also contributes more than half a billion dollars to the state’s coffers.

In the span of eight years, The Pilot found, 92 people won at least 50 tickets worth $600 or more. In one case, a man in Chesterfield County claimed a winning ticket roughly once a week for four years.

Before now, there’s been no way to know if a frequent lottery winner owned, worked at or was related to a lottery licensee — a business the state has approved to sell lottery tickets.

Recent lottery scandals in Canada and Iowa have involved owners of stores where lottery tickets are sold, and in at least one case The Pilot studied, a Hampton man won 23 times at a store he owned in Newport News.

Most people who win $600 or less in a lottery game cash out in stores, Hall said.

It’s possible that’s where fraud happens: A store owner offers to buy a winning ticket for less than what the prize is worth, giving the original winner easy cash without paying taxes on it, and then the store owner cashes out the winning ticket for its full amount.

The Lottery has no way to monitor interactions between private individuals, like if people make an arrangement to share or exchange a winning lottery ticket.

But the state can watch its licensed sellers, who are supposed to follow strict rules and aren’t supposed to participate in “discounting” winning tickets, Hall said.

“We obviously have rules against flagrant fraud,” he said.