July 21, 2005

DOR Internal Review of Lottery Winnings

Introduction:
The purpose of this review was to identify factors contributing to the frequent Wisconsin
Lottery winnings of a certain player. The review was begun after the player won the
Lottery’s weekly “Super Second Chance” drawing for five consecutive weeks in the year
2005. These drawings took place on March 24, March 31, April 7, April 14, and April 21,
2005.
The scope of this review included:
•

A review of the Lottery’s internal controls and procedures;

•

An assessment of the player’s odds of winning five consecutive “Super
Second Chance” games;

•

An assessment of the odds for the player and his wife to win the other
Lottery games they have won; and

•

A review of prize payout data for other repeat Lottery winners

Objective #1: Review the Lottery’s internal controls and procedures for Super Second
Chance game.
Super Second Chance is a game in which participants submit entries of $5 worth of nonwinning Lottery tickets for a weekly drawing. Ten entries are drawn, each for a $1,000
prize. The tickets that qualify for the drawing are instant (scratch-off) tickets and online
tickets (generated by terminals that allow players to pick winning numbers). The only
non-winning tickets that do not qualify are pull tabs, which are not a significant part of the
Lottery’s business. Since Super Second Chance incorporates all instant and online
games, a review of Super Second Chance controls involves a review of substantially all
of the Lottery’s processes related to games.
By statute, the Lottery’s internal controls are reviewed by two separate independent
parties on a biennial basis. These two parties are the Legislative Audit Bureau (LAB)
and a contracted CPA firm. For this past biennium, the CPA firm was Deloitte & Touche
(Deloitte). The LAB’s most recent “biennial program evaluation”, dated May 2005,
covered the fiscal years ended 2003 and 2004. Deloitte’s most recent review was
completed in February 2003.
As a matter of procedure, the LAB meets with the contracted CPA firm (Deloitte) during
the initial and final audit conferences of the CPA firm’s review. This way, the LAB
ensures that it performs any procedures that may not have been in the scope of the CPA
firm’s review.
Additionally, as a participant in the multi-state Powerball game, the internal controls
relating to Powerball are subject to a biennial audit by the Multi-State-Lottery
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Commission (MUSL). The most recent MUSL audit was in September 2004. The
Wisconsin Lottery?s policy is to have the exact same internal control procedures for all
online games as are in place for Powerball. Thus, the internal controls for all of the
Lottery?s online games are effectively examined by three independent entities: MUSL,
Deloitte and LAB.

We reviewed the most recent Deloitte and LAB reports. The Deloitte report provided a
signi?cant amount of detail as to which controls were reviewed. The areas that were
reviewed by Deloitte include:

Physical Security

Lottery Security Operations

Ticket Claim Processing Procedures
Distribution Security

Mailroom Security

Multi-State Lottery Standard Procedures
Computer Database Security

Retailer Background Checks

Lottery Ticket and Validation Tape Security
Lottery Disaster Recovery Planning

We reviewed the cycle of weekly entries in the Super Second Chance drawing and
obtained information about the controls in each step of the process. Specifically, we
focused on controls that prevent a player or retailer from obtaining tickets by theft or
duplication and subsequently sending those tickets to the Super Second Chance
drawing. Secondly, we focused on controls that would prevent a player from obtaining
an unfair advantage in the Super Second Chance drawing process. Following is a
summary of the relevant controls at each stage of the cycle:

Ticket Printing and Distribution to Retailers

tickets are useless without the data contained?
When tickets are Ippe rom

ery engages compu er eqUIpmen an serVIces
contractor, to manage a database that stores this data. GTECH
maintains this data for both instant and online tickets on a highly secure server. No
other parties have access to this data. The Deloitte security review examined the
hardware and software controls in detail.

       
 
  

Once rinted, Lotte

 
 

No prize payment can be made on a ticket that has not been activated, whether the prize
is an instant prize or a drawing such as Super Second Chance, and whether the original
ticket purchase is a scratch-off or online ticket. For scratch-off tickets, the only way to
activate a ticket is for the retailer who originally ordered (and paid for) the ticket to scan
it. The inventory control data allows the retailer to activate tickets. For online tickets,
which are generated when the player pays for them, a ticket is activated the moment it is
produced by the system.

When an activated ticket is a winner, the sical ticket must be validated as the

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n. Ior online llclels leg. IEIS 
a us IS no nown un I the numbers are drawn. Du licate online game winners cannot
be fabricated .

Any tickets obtained by means other than purchase from a registered Lottery retailer will
be rejected by the GTECH system when validated. If a winning ticket is stolen before
activation and presented for validation, the inventory control data will immediately alert
the Lottery that the ticket was never activated.

If tickets are stolen from a retailer after they are activated, the retailer is not entitled to a
refund. This way, the retailer has an incentive to protect the ticket inventory. The
retailer?s only recourse is to call the Lottery to have the tickets de-activated. If the tickets
have been de?activated, the GTECH system will not allow payout when the winning
ticket is presented or drawn.

These controls prevent payment of a Super Second Chance prize to an individual who
has submitted an entry containing fabricated or stolen Lottery tickets.

Transfer of Funds Between Retailer and the Lottery

The Lottery maintains a standard contract with each retailer, in which the retailer agrees
to allow the Lottery to withdraw funds electronically. The process of withdrawing funds is
tied in with the inventory control system, so that the number of tickets received by the
retailer will automatically reconcile with the funds paid by the retailer to the Lottery. This
control prevents a retailer from taking Lottery tickets not paid for and submitting them to
Super Second Chance.

Player Sending Non-Winning Ticket to Super Second Chance

A player may send in an unlimited number of Super Second Chance entries per week.
There is no rule that the tickets sent in by a particular player must be purchased by that
same player. In other words, nothing prevents a player from sending in non?winning
tickets purchased by someone else. This is not unusual for drawings of this type. No
sales receipts are generated when Lottery tickets are sold, and the Lottery has no
means of identifying the person who purchased a particular ticket the Lottery can only
identify the retailer.

When the tickets are mailed to ?Super Second Chance?, the entries are picked up at the

  
 
  

 
 

rawrng s: 
ey are maintained in a building heavily equipped with
These controls surrounding mail Ivery an orage
preven an In ua rom ampering with, or adding to, the entries before the drawing.

    
    

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July 21, 2005
The Super Second Chance Drawing
To prepare for the drawing, the Lottery sets up ten bins and manually distributes all of
the week’s entries among the ten bins. Approximately 35,000 to 40,000 entries per
drawing were received during the period of our review. Lottery staff takes the entry
envelopes out of their mailing trays and distributes them among the ten bins a handful at
a time. When we observed this process, there were three Lottery employees distributing
entries. Approximately 50 envelopes were put into one bin at one time. Although there
is no set procedure for the number of envelopes that employees must put into a bin
before proceeding to the next bin, and no control to ensure that the distribution among
the ten bins is scientifically random, we believe that the distribution is random enough to
ensure a fair result.
The Lottery’s procedures for Super Second Chance drawings after the envelopes are
distributed among the bins are set forth on a checklist that is completed for each drawing
(See Exhibit A). All drawings are videotaped. All drawings are conducted by at least
three individuals: a Lottery Drawings Manager, an independent auditor from Seeker
Financial Services, and an officer from the Capitol Police Department. All three
individuals are present throughout the duration of the drawing, until the winners’ names
are submitted for release to the public. The individuals conducting the drawing differ
from week to week.
During the five consecutive weeks that the player won Super Second Chance, there
were four different combinations of individuals conducting the drawing. No individual
was present for all five of the player’s consecutive winnings. See Exhibit B for a list of
the drawing staff for the weeks in question. This variation in drawing staff prevents any
collusion between a player and a person responsible for the drawing.
The drawing itself is performed by the Capitol Police officer, blindfolded. The officer
must roll up his sleeves to above the elbow. One envelope is drawn from each bin and
handed to the independent auditor as a winner. After the ten winning envelopes are
drawn, another envelope is drawn from each bin as an alternate. The independent
auditor marks each alternate with an “A”. The alternates are then put into a bag, shaken
up, and the Capitol Police officer, still blindfolded, draws the ten alternates out of the
bag. The alternates are numbered in the order that they are drawn and, if needed, used
in the order they are numbered.
Envelopes that are doctored with any adhesive, special folding technique, stickers, or
any other method by which a blindfolded person can identify them are disqualified.
However, colored envelopes are allowed. We tried on the blindfold to ensure that there
is no way to see a colored envelope.
After the envelopes are drawn, the Drawings Manager then opens the envelopes and
announces the winners’ names and addresses, still on camera and in the presence of
the other members of the drawing staff. In this way, it is verified that the envelopes that
were drawn are the ones that are actually announced and recorded as winners. The
independent auditor records the names of the winners as they are read. After the
names are read, the camera is stopped, and the drawing staff transports the winning
entries to the Lottery Validations office.
We viewed the videotape showing the five consecutive drawings that the player won, as
well as two drawings that the player did not win. The drawings all followed the same
procedures.
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Validation of Winning Super Second Chance Entries
Immediately after the winning tickets are drawn, the Drawing Manager, independent
auditor, and Capitol Police officer go to the Lottery Validations office together. There,
they scan the tickets for each winning entry against the validations data in the GTECH
system. If a ticket has been reported as stolen, is not authentic, or is not eligible
because of expiration (180 days from purchase date or end of instant game), the system
will immediately alert the Lottery.
After the winning tickets are validated, the Drawing Manager, independent auditor, and
Capitol Police officer go to the Drawing Manager’s office to fill out a validation form for
each winner. After the Drawing Manager enters the information, the independent auditor
reviews the data for each winner to ensure that the information on the validation form
matches the winning entries. This validation form is then sent to the individuals
responsible for mailing the check and publishing the winners.

Disposal of Non-Winning Super Second Chance Entries
While the winning entries are en route to the Lottery Validations office,
empties all ten bins of undrawn envelopes into a locked trash
compactor. The
security system would capture any instances of envelopes
not properly disposed.

Our review of internal control showed no material weaknesses relevant to any players’
using stolen or fabricated tickets in Super Second Chance. We also concluded that
there are no material weaknesses that would allow players to gain an unfair advantage
because of collusion. Further, we concluded that there are no material weaknesses in
the methodology of conducting the drawing. The only potential issue that we could
identify is that there is no system in place to prevent players from sending in non-winning
tickets that were purchased by someone else. Whether this potential issue actually
constitutes a problem depends upon the extent to which players are able to obtain
tickets purchased by others.

Objective #2: Determine the odds for winning Super Second Chance for the five
consecutive weeks that the player won it, and determine whether the
player did anything to increase those odds.
The odds for the player to win in the drawing are the number of winners selected times
the number of the player’s entries, divided by the total number of entries.

Total Entries in Drawings
We did a physical count of the envelopes mailed to the Lottery for the Super Second
Chance for the week of May 26, 2005. There were a total of 36,884 envelopes in the
drawing. These envelopes were taken from a total of 63 mailing trays, including full
trays and half trays. This worked out to an average of 585 letters per tray if all trays
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 July 21, 2005
were counted, and to an average of 602 letters per tray if only full trays were counted.
Full trays were defined for this analysis as trays containing over 400 letters. We
estimated that if a tray was packed very tightly it could possibly hold up to 900
envelopes.
We examined nine of the Lottery Second Chance Drawing Checklists for drawings
between December 23, 2004, and April 21, 2005, including the five consecutive
drawings that the player won. As a matter of procedure, the Lottery estimates the total
entries for the week on the checklist. In each of these checklists, the estimate of total
envelopes was derived by multiplying the number of the trays times 1,200, and the total
number of entries recorded per drawing ranged from about 60,000 to 75,000.
Based on our physical count we believe that the estimate of 1,200 letters per tray is high,
and that the actual estimate per tray should be about 600. We noted that the Lottery
lowered their estimate to 600 per tray for the March 28, 2005, drawing, 800 per tray for
the May 5 drawing, 600 per tray for the May 12 drawing and 800 per tray for the May 19
drawing.
Lottery personnel indicated that the estimate of 1,200 envelopes per tray was
determined several years ago when the Lottery drawings still took place in Milwaukee. It
is unknown whether the exact same size trays were used for the Milwaukee drawings as
currently are used for the drawings in Madison.

Number of the Player’s Entries in Winning Drawings
We attempted to determine the number of the player’s entries by tracing the entries to
the retailer who sold him the winning tickets. However, an examination of winning
tickets showed that they came from a variety of retailers.
We analyzed GTECH data to determine the extent to which the player’s winning Super
Second Chance tickets were purchased as part of an entire roll of tickets, or whether
tickets in the same roll as those that were drawn were cashed all at one time. There is
no record in GTECH to identify who purchased or cashed a particular ticket. The only
way to identify the player’s tickets was to find a consistent pattern for a number of tickets
purchased or cashed from the same roll as the winning Super Second Chance ticket.
We did find patterns of up to $140 in tickets purchased within a few seconds of the ticket
known to be purchased by the player. We also found that all tickets from the same pack
as the player’s ticket were cashed on April 1, 2005. There were 200 tickets in the pack,
priced at $2 each. There were 159 non-winning tickets in this pack, which translates to
53 Super Second Chance entries. However, as much as the GTECH information was
helpful to us in determining the number of tickets that the player purchased from one
retailer and from one pack at a time, we did not have enough known tickets from the
player for GTECH to tell us the amount of tickets the player purchased from other
retailers or other packs. A pack of instant tickets can hold up to 400 tickets.
On May 27, 2005, we interviewed the player at his business address in the presence of
his attorney. While the player was willing to talk to us, he stated that he really had no
idea how many entries he sent in to “Super Second Chance” each week. He admitted
that he played the Lottery a lot and that the money he spent was his form of
entertainment. He stated that he plays all of the Lottery’s games, and Super Second
Chance is just another way for him to win. He declined to even hazard an estimate of
the number of envelopes he sends in to “Super Second Chance” as he stated that he
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feared that the media would twist whatever figure he said to try and get a further story
out of this.
The player did tell us that he likes to purchase entire packs of instant tickets because he
knows that each pack has a guaranteed amount of prizes (generally between 30% and
60% of the price for the ticket pack). The player cashes the winning tickets, generally at
the retailer location if winnings are under $600, and then submits the non-winners to
“Super Second Chance”. The player made a number of statements that would show that
he is quite involved in playing the Super Second Chance game.
Although no player is aware of the number of entries expected or the actual number
received, the player stated that he sends in more tickets when he believes turnout will be
low. For example, he believes that the number of entries will be lower on a week with a
three-day weekend. To speed up the entry process, he uses name and address ink
block stamps to stamp his name (or his wife’s name) on the tickets. He addresses the
envelopes with an ink block stamp for the Lottery’s “Super Second Chance” P.O. Box.
The player admitted that, at times, he spends hours preparing the envelopes for mailing.
He stated that he packs the envelopes in a box that holds 500 envelopes. He showed
us one such box full of envelopes, and stated that he had another box just like it in his
office. However, he did not allow us to count or handle these unmailed entries. The
player stated that he sends in envelopes on a daily basis and he sends them in from
different locations, hoping that this will increase his odds of being picked.
The player also brought out a handful of tickets that he had purchased in the past week.
He mentioned that because of the media attention, he has quit playing Super Second
Chance, and his overall Lottery ticket purchases have gone down. Still, we estimate that
there were approximately 80 tickets in the handful of examples. But again, the player
would not allow us to count them.
We asked the player if he thought that he sent in as many as 2,000 entries per drawing
during the consecutive weeks that he won the Super Second Chance. He indicated that
2,000 was too high. We asked if 1,500 was close and he said that he didn’t know. At
one point in the conversation the player gave a hypothetical estimate of 100 entries per
day, but clearly indicated that he is not saying that he sends in that many.
We asked the player whether he has obtained non-winning tickets from anyone else. He
stated that he does have friends and relatives who save non-winning tickets for him.
However, he stated that this does not happen every week and that most of the tickets he
submits to “Super Second Chance” are those he actually purchases himself. He joked
that once his wife caught him reaching into a garbage can for a non-winning ticket and
he hasn’t tried it since.
We asked the player to attempt to reconstruct an estimate of the number of envelopes
that he sends in, or possibly a range of the number he sends in. At our May 27, 2005,
interview, he refused to do so.
On June 6, 2005 the player’s attorney stated that the player told him he did not keep
track of the number of entries he sent in during the five consecutive weeks that he won
Super Second Chance. As such, the player stated that he did not know if he had a
consistent pattern of sending in the same number of entries per week during these five
weeks, or if the number of entries he sent in was consistent with the number of entries
he submitted in other weeks of the year. The attorney stated that the player doesn’t
have a pattern that he keeps track of, and that he just doesn’t know how many he sent
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in. The player was not otherwise willing to assist us in any attempt to reconstruct the
number of entries that he sent in.
We interviewed a proprietor of a convenience store, who was the retailer for several of
the player’s tickets that were drawn. The retailer stated that the player frequently gets
gas for his business vehicles at his store. He stated that the player has been buying
lottery tickets at his store for about three years and that he has been buying a
substantial number of tickets for at least the last six to seven months.
The retailer stated that the player buys anywhere from $30 - $100 of lottery tickets per
day when he stops in. He further stated that the player typically makes such purchases
five to six times per week. He stated that the player buys a combination of online as well
as scratch-off tickets, depending on the particular games he likes at the time. The
retailer stated that, on occasion, the player purchases an entire pack of scratch-off
tickets. He stated that the player does this to mitigate his costs since the player knows
that there is a guaranteed minimum payback in each pack. Otherwise, purchasing the
same number of tickets piecemeal could result in zero payback.
The retailer stated that he does not save discarded tickets for the player. However, he
stated that at times he has seen the player pick up discarded tickets from in the store.
We interviewed an employee of a grocery store, a second retailer of the player’s winning
Super Second Chance tickets. She stated that she frequently works in the customer
service area of the store and has sold many lottery tickets to the player. She stated that
the player has purchased lottery tickets at this store for at least the last two or three
years.
She stated that the store has a deli with a cafeteria and that the player comes in for
lunch there. She stated that the player comes to the store about five times per week and
purchases at least $70 in lottery tickets each time. She stated that the player maintains
this buying pattern pretty much year round, except when he is gone on vacation. She
stated that his buying pattern did not change during the weeks in March and April when
he was winning the Super Second Chance Lottery drawings.
She stated that the player has bought as much as $400 worth of lottery tickets at one
time. She could recall two instances when the player bought entire packs of scratch-off
tickets.
She also stated that neither she, nor anyone else at the store to the best of her
knowledge, had saved any discarded lottery tickets for the player.
Our best evidence of the number of the player’s entries comes from John Sams, a
Lottery employee who did a physical count of what was believed to be the total number
of the player’s entries during the week of April 14th, the fourth consecutive drawing that
the player won. Sams identified the player’s entries as using the same size, white
envelope with the ink stamped address of the P.O. Box for the Lottery, a Green Bay
postmark, and a manual correction to change a “7” to a “1” in the last four digits of the
stamped Lottery ZIP code. Sams did not retain any of the tickets or envelopes. He also
did not retain the piece of paper that he wrote down the total on, but recalled that it was
about 500 entries. Other Lottery employees have recalled the figure at about 490 or
497. Sams stated that the player’s entries were found scattered throughout all but one
of the ten bins.

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Our interview with the player revealed that he may have had more envelopes in the April
14th drawing than the Lottery was able to identify. Since the entries are mailed from
various locations, the player may have had entries in the April 14th drawing that were
postmarked from locations other than Green Bay. Additionally, the most efficient way for
the Lottery to identify the player’s envelopes was to locate the manual correction to
change a “7” to a “1” in the last four digits of the ZIP code. The player stated that after a
while, he noticed that his ink stamp had the wrong zip code on it and he started to make
the correction by hand. Based on analysis of the player’s envelopes that were drawn,
the week of April 14th was the first week that the manual correction was made. It is
possible that the player had entries in the April 14th drawing that the Lottery did not
identify as such because they were sent before the player started to correct the error.
We discussed these possibilities with John Sams. He indicated that he and other staff
identified anything that looked close to an entry from the player and opened the
envelope if necessary to ascertain whether it was an entry from that player.

Odds of Winning Super Second Chance for Five Consecutive Weeks
Our estimate of the odds is based on the assumption that the player submitted roughly
500 entries per week. Each mailing tray is estimated to hold 600 entries. Following are
the odds for each drawing:
DRAW DATE
3/24/2005
3/31/2005
4/7/2005
4/14/2005
4/21/2005

NO. OF
TRAYS
59
56
59
53
56

ESTIMATED NO.
OF ENTRIES
35,400
33,600
35,400
31,800
33,600

FIVE CONSECUTIVE WINS

ODDS TO WIN
1 : 7.08
1 : 6.72
1 : 7.08
1 : 6.36
1 : 6.72
1 : 14,397

The odds of the player winning any one given drawing are determined by multiplying the
number of the player’s entries (conservatively estimated at 500) times 10 (number of
drawings out of the bins) divided by the estimated total entries. The odds of the player
winning five times in a row are the product of the above odds, or 1/7.08 x 1/6.72 x 1/7.08
x 1/6.36 x 1/6.72 = 1/14,397.
The average odds of the player winning any SINGLE drawing, based on the model
above, are better than one in seven. The odds of the player winning five times in a row
are about one in fourteen thousand. While the odds against this happening are certainly
high, they are not as high as originally quoted in the media. A practical translation of
these odds is to imagine rolling a “6” on a six-sided die. The odds of the player’s
consecutive winnings are three times better than rolling a “6” for six consecutive rolls
(1/46,656), and about half as good as rolling a “6” for five consecutive rolls (1/7,776).
The Megabucks Lottery game offers another illustration of these kinds of odds. To play
Megabucks, a person chooses six different numbers between 1 and 49. The odds
against any one person correctly picking 5 out of 6 of these numbers in the drawing are
1:27,101. Nevertheless, between December 1, 2004 through June 4, 2005, an average
of almost seven persons, per draw, correctly picked 5 out of 6 of these numbers. Since
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 July 21, 2005
many people can pick the same number(s) there is no guarantee that any one person
will win it. Still, people do it every time.

Were there Factors that May Have Increased the Player’s Odds?
We consulted with a Department of Revenue Computer Audit Specialist who deals with
statistics and probability on a regular basis. The specialist explained that
mathematically, these odds would not have been any different in the event that the
player’s entries had all been placed in one bin, provided that the total entries were
divided equally among the ten bins. Based upon our examination of the drawing
procedures and the videotape of the drawings at issue, we believe that the total entries
were equally divided among the ten bins.
We considered whether the player may have accumulated tickets over an excessive
period of time and submitted them all at once. From examination of the player’s winning
Super Second Chance tickets, we concluded that the player typically sends in tickets
that were purchased within two weeks before the drawing.
We also noted two other items that lead us to believe that there were no factors
contributing to the player’s Super Second Chance winnings other than simply a large
number of entries. First, the player’s winning entry for the March 24, 2005 drawing was
a $10 ticket. The minimum ticket value eligible for a Super Second Chance entry is $5.
An individual with the sole purpose of winning Super Second Chance would purchase
two $5 tickets versus one $10 ticket, because the $5 tickets would make two entries.
Second, on March 31, 2005, when the player won the drawing, the player was drawn as
one of the ten alternates. An individual trying to “game the system” by collusion would
not set himself up to be an alternate – he would only set himself up to be a winner.
It is our opinion that based on the evidence found, the only thing that the player did to
increase his odds of winning Super Second Chance was to send in a substantial number
of entries. We believe that the player actually purchased the vast majority of these
entries himself.
We noted that the cost for the player to send in 500 entries, independent from any
winnings, would be $2,685 ((500 x $5 per entry) + (500 x $0.37 postage)). The player
explained to us that whatever money he wins from the Lottery, he puts back into the
Lottery. The player indicated that he has never won a large Lottery jackpot, nor does
our data show that he has. Since Lottery games in general have an average payout of
approximately 60%, the player must come up with non-Lottery sources of funds to pay
the remaining 40% of ticket costs. In the case of 500 Super Second Chance entries
($2,500 ticket value), the player would have paid $6,250 up front for the tickets, won
$3,750 back (60% of $6,250)), and lost $2,500 (40% of $6,250), plus postage, from the
funds that he initially put forward.

Objective #3: Determine the odds for the player and his wife to win the other Lottery
games they have won over the years, and determine whether they did
anything to increase those odds.
We obtained prize payout data for both players. The data goes back to the year 1999
for cash prizes and back to 1998 for merchandise prizes. Both players’ winnings can be
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separated into three groups: Cash Drawings, Instant/Online Tickets, and Merchandise
Drawings. Total cash winnings since the year 1999 were $72,972. Cash drawings such
as Super Second Chance make up the majority of these winnings. Below is a
discussion of the odds relative to the both players’ winnings in each group:

Cash Drawings
Exhibit C-1 is a summary of both players’ winnings from cash drawings since the year
1999. A total of $65,112 of the $72,972 cash winnings in this time period was
attributable to cash drawings. These drawings consists of two types: 1) Those where
non-winning tickets are eligible for the drawing, and 2) Those where only winning tickets
are eligible for the drawing (i.e. the prize on the instant ticket is to be included in the
drawing).
The drawings of non-winning tickets consist primarily of Super Second Chance and its
predecessor, the “Home Player” game. Home Player became Super Second Chance on
July 19, 2002. The difference between Super Second Chance and Home Player is that
the prize amount for Home Player depended upon the results of the weekly “Money
Game” and “Super Money Game” television shows. These players’ prize amounts per
drawing for Home Player ranged from $750 to $3,000. The prize amount for Super
Second Chance, for all winners, has always been $1,000. For either game, the criteria
for entering the drawing and the number of winners per drawing (ten) was the same.
The other cash drawing for non-winning tickets that the players won was “Sweet 16”, a
game in which only a non-winning “Sweet 16” instant ticket was eligible for the drawing.
The drawings of winning tickets consist of the qualifying rounds for the Money Game and
Super Money Game weekly TV shows (Money Game was replaced by Super Money
Game). In order to be on the show, a player had to win a chance to be drawn for the TV
show, by scratching off the word “Entry” or a TV logo on an instant ticket. The odds of
scratching off an “Entry” or TV logo ticket were 1:100. From all of the “winning” tickets
mailed in, the Lottery would do a weekly drawing to draw 30 – 40 people to attend the
show. All players attending the show would automatically win something, whether or not
they were picked from the studio audience to actually play the game.
Exhibit C-1 shows the estimated odds of each cash drawing that the players have won
under various assumptions of their number of entries.
Exhibit C-1 also shows a comparison of these players’ winnings from each of the two
types of drawings. The players won drawings of non-winning tickets 39 times since
1999, while during the same period they won drawings of winning tickets 11 times. The
fact that the players have been drawn a significant number of times in drawings of
winning tickets supports the player’s claim that he himself is actually purchasing the vast
majority of tickets he sends in. (Why would anyone throw away or give away a winning
ticket?)

Instant/Online Tickets
Exhibit C-2 is a summary of both players’ winnings from instant and online tickets since
the year 1999. Note that the player and his wife overcame similar odds with
instant/online tickets as he did with the five consecutive Super Second Chance
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 July 21, 2005
drawings. In fact, he overcame odds of 1:120,000 to win a $1,000 prize in the “TV
Moola” game, a scratch-off game. His wife overcame odds of 1:10,000 to win a $5,000
prize in “Pick 4”, an online game. (Note: The odds were actually better for the $5,000
“Pick 4” because the prize structure for “TV Moola” was set up so that the odds of larger
prizes would increase). These scratch-off and online ticket winnings are significant
because they demonstrate that these players overcame these types of odds even when
the game did not involve a mail-in drawing. In these games, there is no variable for
picking up non-winning tickets off the street. Rather, the only way to win them is to
purchase enough tickets.

Merchandise Drawings
Exhibit C-3 is a summary of the both players’ winnings from merchandise drawings since
the year 1998. Since the year 2001, the Lottery has had very few games with
merchandise drawings. Thus, most of these players’ merchandise winnings took place
prior to 2001.
Each merchandise drawing is incorporated into a particular scratch-off game that has a
pre-established number of drawings, typically conducted weeks, even months apart .
Some drawings are for non-winning scratch-off tickets, while others require a winning
“entry eligible” ticket.
Exhibit C-3 shows that these players have routinely won more than one merchandise
prize in a particular drawing, even when the total number of entries was over 100,000.
Based upon our finding that the number of Super Second Chance entries was
overestimated (see Objective #2), the total number of entries shown for these
merchandise drawings may be overestimated also. We did not review these estimates.
However, the frequency of multiple wins per drawing is significant because it provides
yet another clue as to how many entries these players actually send into drawings. For
example, if there are 100 prizes of a certain type and 20,000 total entries, we would
expect that on average, somebody would have to submit 20,000/100, or 200, entries.
The last column of Exhibit C-3 shows a computation of the average number of entries
that would be necessary to win the type of prizes these players won for that drawing as a
whole. This estimate is based upon the assumption that the total number of entries
estimated by the Lottery is reasonably close.
For the Harley Davidson game, where the prizes included motorcycles, we estimated
that these players submitted over a thousand entries on four different occasions,
including an estimate of 4,500 entries for the December 28, 1998, Harley drawing.
Further, we found out that the Harley Davidson merchandise drawings prior to 2003
were only for winning tickets – those tickets where a player wins an opportunity to be in
the drawing. Additionally, the Pepsi Cola and Star Trek drawings were only for winning
tickets. Exhibit C-3 shows that the vast majority of both players’ merchandise winnings
are from these three games. Based on the assumption that a winning ticket would not
usually be thrown out or given away, this data provides further support that the player
actually did purchase substantially all of his tickets himself.

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 July 21, 2005
Were there Factors that May Have Increased the Player’s Odds?
The estimates that we developed on Exhibit C-3 underscore the evidence described in
Objective #2 regarding the actual number of tickets that the player purchases. If the
player and his wife have submitted thousands of entries at a time to win a Harley, it
seems reasonable that he could submit enough entries to win Super Second Chance for
five consecutive weeks.
From our analysis of both players’ winnings for games other than Super Second
Chance, we believe that the their frequent winnings for these other games are
attributable to the same cause as his winnings of Super Second Chance: frequent,
persistent, and serious play.

Objective #4: Determine the extent to which the Lottery has had other repeat winners
such
as this player.
Since the game at issue is Super Second Chance, we focused specifically on the Super
Second Chance game to meet this objective. We reviewed the Lottery’s check register
for all prize payouts for the period of January 1, 2005, through June 2, 2005, and sorted
the data by game type. We found that during this five month period, there were twelve
individuals, other than this player, who won $1,000 in the Super Second Chance drawing
more than once. All twelve won it twice. On the other hand, this player won it seven
times during this period: December 23, 2004 (paid January 3, 2005), February 10,
March 24, March 31, April 7, April 14, and April 21.
The frequency of repeat winners, albeit only two-time winners, reinforces the plausibility
of the player’s winning streak. The fact that five of seven of the player’s winnings are
consecutive is interesting, but not alarming in light of the information we have about the
number of entries that the player sent in and odds we calculated in Objective #2. As for
the other twelve repeat winners, it is highly unlikely that if the cause of the repeat
winnings is anything other than a high volume of entries, all twelve individuals would
know how to “beat the system”. This high volume of entries is not likely to be due to
fraud or duplication, as discussed in Objective #1.

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