I-TEAM EXCLUSIVE: How Lucky Is Too Lucky? And Why Are Lottery Retailers Defying The Odds?
By Charlotte Huffman
PHILADELPHIA (CBS) -- Every day millions of people buy tickets hoping to win big bucks playing the lottery.
Beating the odds rarely happens – unless you are a lottery retailer.
Eyewitness News Investigative Reporter Charlotte Huffman obtained the names of every person who won a lottery ticket in New Jersey worth $600 or more over the past five years.
She spent weeks analyzing the data, which includes more than a quarter of a million winning tickets and found licensed lottery retailers, the people who sell you the tickets, are cashing in prizes at surprising rates.
Lissmol Paul is one of the luckiest people in New Jersey.
Paul is the state's third most frequent winner.
Since 2010, Paul has cashed in winning tickets worth $600 or more 96 times.
She even won $1,000 four times in a single month.
Her wins are for a variety of different games.
In the past 5 years, Paul has claimed a total of $132,512 in winnings.
"What's your secret?" Huffman asked Paul.
"Luck!" she said.
Paul is a licensed lottery retailer. She owns a store in Turnersville where she and her husband, Daniel Paul, sell lottery tickets.
He had a familiar response.
"It is luck" Paul said.
"That's one heck of a lucky streak!" said Huffman.
"You can say that," Paul responded.
Lissmol Paul is not the only big winner with ties to retail stores.
Three out of the state's top six winners are lottery retailers.
Huffman's investigation also revealed the state's top three winners are lottery retailers or the immediate family of retailers.
Frequent players were shocked to learn how many times some retailers are winning high dollar tickets.
"It's kind of shady. How is that possible?" said Michael Donovan, a frequent ticket buyer.
"I've been playing for probably ten years and I've hit it straight and won a decent amount maybe twice," said another serious player, Jeff Arnold.
"Wow. That's a lot of money. I can't believe they've won that many times," said Mary Ann Getz as she left Paul's store where she purchases tickets daily.
"Are they just really lucky?" she asked.
Maybe.
But experts believe there's more than luck at play.
"It looks a little fishy to me," said Skip Garibaldi.
Garibaldi is a statistician specializing in lottery investigations and is the Associate Director at UCLA's Institute for Pure and Applied Mathematics.
Huffman sent Garibaldi her findings showing the frequent winners who are also lottery retailers.
He calculated winners like Paul would have needed to spend about $1.6 million or approximately $800 per day in order to beat the game's odds and win as frequently as she has over the past five years.
"Spending 1.6 million to win about $130,000? How does that make sense?" Huffman asked Daniel Paul.
"We are lucky," he maintained.
"Sometimes they'll buy someone's winning ticket at a discount and then turn them in themselves and claim the prize. That's a popular thing to do," Garibaldi said.
It's called ticket discounting.
The practice is not illegal but it is against lottery rules.
"So a person with a winning ticket worth $1,000 sells their ticket to a discounter for maybe $500 or $600," Garibaldi explained.
Ticket discounters help winners hide from the government because jackpots of $600 or more are taxable and have to be cashed in at the lottery office.
It's a process that involves lottery officials checking to see if the winner owes back taxes, child support and other debts. If the winner owes money, lottery officials deduct it from the value of the winning ticket and issue the winner a check for the remaining balance.
Besides trying to avoid paying debts, Garibaldi says there are other reasons why a winner might want to hire a ticket discounter.
"When you go claim your prize you have to fill out a form and present photo I.D. and maybe you have warrants out for your arrest or are an illegal alien," he said.
Lissmol Paul says she has never bought a ticket off a winner.
She has not been cited by lottery officials for doing anything wrong.
Another New Jersey retailer agreed to talk about ticket discounting as long as CBS3 hid his face.
He told Huffman that winners are always looking to beat the system and ticket discounting happens all the time.
"Has anyone ever asked you to cash in a ticket for them?" Huffman asked.
"Yeah. Some people they try here but we never do the deal, never," he responded.
The I-Team asked Garibaldi if he thinks New Jersey has a problem with potential ticket discounters.
"Yes. Absolutely, I think so. I think the fact that like you said, the top three prize claimants in New Jersey are retailers or related to retailers is very troubling. I think that looks bad and if I were the New Jersey Lottery I'd be worried just about the optics of that," Garibaldi said.
He says New Jersey lottery officials probably aren't paying close enough attention.
"If I ran a casino in Vegas and one of my top blackjack winners was also a blackjack dealer in my casino then I would not be happy with that situation!" said Garibaldi.
Garibaldi says ticket discounting is a business and a regular source of income for the people who do it.
Ultimately, the practice denies taxpayers money owed to the state by delinquents.
"The New Jersey Lottery needs to explain – what have they done to investigate these people who appear to be discounting the tickets?" Garibaldi said. "That's a question I want to ask."
The I-Team wanted and tried to ask New Jersey lottery officials the same questions.
But officials would not agree to discuss Huffman's findings.
Lottery spokeswoman, Judith Drucker failed to return a single one of Huffman's nearly dozen phone calls since mid-April.
The only question that Drucker answered from Huffman was regarding how much money the Lottery has claimed from delinquent winners.
In 2014, New Jersey Lottery collected $60,111 from the lottery's Delinquent Tax Retrieval Program.
Ultimately, Drucker denied on-camera interview requests and instead sent CBS3 a statement saying if lottery officials catch retailers discounting tickets they can revoke their license to sell tickets.
But that doesn't seem to happen very often.
Take the case of Sunil Patel for example.
Patel is a lottery retailer in Vineland.
He is one of three people who lottery officials cited in 2014 for ticket discounting.
Officials caught Patel trying to cash in a $20,000 winning ticket that he bought from someone for $10,000.
The ticket was voided but Patel never lost his license.
Neither did the other two retailers who lottery investigators caught discounting tickets.
"Why did you buy it off the person?" Huffman asked Patel.
"No comment," he responded.
"Is this something you do often?" Huffman asked.
"No," answered Patel.
Patel's name is also on the list of winners who have claimed prizes worth $600 or more since 2010.
He has claimed big wins 13 times for a total of $25,936.
But he did not want to talk to Huffman about any of those wins.
"Can you just answer a few questions?" Huffman said.
"No you need to leave … Ma'am if you don't leave I'm going to call the police on you," said Patel.
The I-Team also asked lottery officials for the number of retailers who they have cited for ticket discounting so far this year.
Officials have yet to answer that question.
The Treasury Department's Records Access Unit has filed three extensions and CBS3 is still waiting for their response.
Huffman also obtained Pennsylvania records of people who have won $600 or more in the past five years.
Like in New Jersey, there are frequent winners who Garibaldi believes are defying the odds and prompting suspicion.
For example, a Souderton woman won 57 big prizes from 15 different stores over the course of 782 days. Her winnings amount to $165,000.
By Garibaldi's estimates, she would have needed to spend a minimum of $1.01 million in order to beat the odds like she has.
Pennsylvania's most frequent winners are not licensed lottery retailers. However, it is hard to tell whether they have connections to retailers.
Garibaldi believes that similar to New Jersey, Pennsylvania has a ticket discounting problem.
He points out that a potential ticket discounter does not have to be a lottery retailer.
Pennsylvania lottery officials declined CBS3's request for an on-camera interview and maintain they do not have a ticket discounting problem.
