In 2014, the Georgia Lottery Commission issued 270 denial letters to winners of $1,000 or more in the previous four years. Among those who the Commission issued these letters, 63 percent were people of Indian, Asian or Hispanic descent. People with the common last name Patel made up 23 percent of the denial letters as well, according to an analysis by the Atlanta Journal-Constitution.
In response to the AJC’s analysis, the lottery’s general counsel Joe Kim said, “I don’t think it’s appropriate for anyone to draw conclusions about how we treat ethnic groups based on 270 denial letters. . . . We process more than 100,000 claims a year.” Mr. Kim declined to answer additional AJC questions because of the pending litigation.
If the Georgia Lottery Commission’s claims are to be believed, then it requires looking closer at the details. That article on the allegations by the AJC goes on to quote General Counsel Joe Kim:
“We had some people that had claimed — I think there were a dozen that had claimed over a hundred prizes . . There were 60 or 70 people that had claimed over 50. Everyone knew they were cashing tickets for other people. . . That was kind of the first step in taking a closer look and doing more investigation of suspicious prize claims.”
In one case, the lottery denied the request of Anita Patel for a $5,000 prize in 2013 and a $1,000 prize in June of 2014. Patel had said she lived on Pheasant Ridge in Thomasville, GA, when her license showed an address on Hawks Crest. The lottery’s letter noted to her that “This is the same address as the owner of the store … who has previously submitted an astonishing 33 winning tickets. . . . Your attempt to conceal these facts create a prima facie case that you are cashing the ticket for Mr. Patel or that you are cashing the ticket for one of Mr. Patel’s confederates.”
Prima Facie Evidence is Enough to Deny Payout
Among the 270 denial letters was Clarence Dobson, who listed his address as a post office box in Patterson, GA. He was denied prizes of $1,000 and $5,000 in November 2014. A letter to Dobson said the prize money would not be awarded because he had redeemed 43 tickets over a three-year period, and claimed multiple winning tickets on the same day. The letter said bluntly that “The extraordinarily improbably win patterns … create a prima facie case that tickets are being given to you by third parties.”
The message to lottery winners is clear: win too often, and we might just deny your payout. The Georgia Lottery’s denials are not unique to Georgia. Lottery commissions of several states have been known to refuse prizes for failure to follow the lottery rules, such as the California Lottery’s refusal to pay a man his $5 million winnings when he sent his underage son to buy scratchers for him (which is also prohibited by Virginia law). Most lotteries have rules against retailers or relatives of retailers purchasing tickets. They will especially cast a suspicious eye toward people who try to hide their association to a retailer.
But the Georgia Lottery Commission also denied prizes based on suspicions from the perceived improbabilities, such as too many winnings claimed by one person in a short time. If you follow our recommended strategy, what’s that mean for you?
Protect Winnings with Records
You buy clusters of tickets based on our rankings and win a number of prizes, let’s say within a few months to a year. Then suddenly you find a letter in your mailbox complaining about the “extraordinarily improbably win patterns.” What can you do?
First, you can point out that they should look at the statistics before disparaging you. For most of those it denied payouts, the Georgia Lottery Commission essentially accused of attempting to redeem winning tickets for others. As with Clarence Dobsen’s 43 tickets in three years, the Commission said “not likely” and decided it was a scheme to redeem winning tickets on behalf of others.
But look at the Virginia Lottery stats on remaining scratcher prizes: across the 85 scratcher games, buying on average 10 tickets gives a 99.7% probability of getting a prize. Buying 14 tickets will likely return at least one prize worth more that the cost of the ticket. Imagine if you did that once per week – you’d have landed 43 winning tickets before the end of the first year!
And then you can pull out your spreadsheet: wins and losses by date. We’ve noted that the IRS recommends record-keeping when claiming tax deductions for gambling losses, including unredeemed scratchers. The same goes for protecting your payouts from skeptical lottery officials. Show a record of when, where, and how many tickets you bought for yourself. A lack of records lets the lottery commission blame you for fraud.
Don’t Let Prima Facie Evidence Stand on its Face
When scratcher winners like Anika Patel sued the Georgia Lottery Commission for not honoring the contract of a ticket, the GLC then attempted to claim buying a ticket was no such contract. Despite the fact that lottery commissions can refuse to pay out if you fail to follow lottery rules, the GLC claimed it didn’t have to pay out according to lottery rules based on speculation and suspicion.