RALEIGH, N.C. _ Lottery scammers have cheated North Carolina out of an estimated $7 million in back taxes and delinquent child support since 2009, a nonpartisan arm of the General Assembly said.
At the request of a state legislator, the Fiscal Research Division teamed up with a UNC-Chapel Hill statistician to calculate the loss following a Charlotte Observer investigation that found dozens of players winning the lottery so often that their luck defies logic.
Highlighted in the Observer's series was a lucrative secondary market for winning lottery tickets. In it, players resell tickets to avoid automatic withholdings, such as back taxes and child support. Buyers collect the prize and sellers remain anonymous, the Observer found.
The division's analysis was the first time the state tried to estimate how much it was losing to players who resell winning tickets.
The estimated loss nearly matches the $11.5 million the state has automatically withheld from winners who owed debts since 2006.
"Seven million is a big enough loophole to plug," said Rep. Paul Stam, a Wake County Republican who asked the research division to investigate. "Unless they (legislators) are just in love with the lottery, I'd say almost unanimously, they'd want to plug that loophole."
Stam is retiring from the General Assembly but said he's spoken with a senior legislator who plans to introduce a bill next session that would make ticket reselling "a low-grade misdemeanor."
Indiana, Florida and Iowa have laws against reselling tickets. Here, it's against lottery policy for retailers or employees to resell tickets. Regular players are free to do so, even though North Carolina Education Lottery officials acknowledge it can hurt taxpayers and single parents.
Statisticians who reviewed lottery data for the Observer's series said they recognized trends that suggest fraud or reselling tickets.
A simple online search shows just how easy it can be. Two weeks ago, a lottery winner from Morganton offered to sell on Craigslist a winning $1,000 scratch-off ticket for $750.
"Need money now!!!" the ad read.
Jan Hannig, the UNC statistics professor who helped the research division, said his analysis took a conservative approach by only looking at the most prolific winners. It's likely, he said, the state was missing out on much more debt set-off payments.
