1. California Lottery SECURITY/LAW ENFORCEMENT DIVISION

2. Background
In 2005, California retailers accounted for 5% of all high tier claims ($+599) but represent only .2% of the playing population.
Between , the California Lottery conducted three high profile theft investigations: $745,000, $535,000 and $555,000. Two of the investigations resulted in the arrest of clerks. The third led to a contract termination.
A California retailer has claimed 244 high tier prizes for $462,852. Another received $ 355,594 for 198 claims. Still another retailer filed 182 claims and collected $937,499 in prizes.
California retailers play often and therefore win often;
or – are very lucky
or – obtain winning tickets outside lottery regulations

3. Response Consumer Protection Strategic Plan
Retailer and retailer related claims analysis which includes:
Revised claim form to include retailer related questions
Claims & Player Service collaboration
Increased Field Investigations
Implemented a daily high-tier query alert
Enhanced Check-A-Ticket functionality to include all prizes levels for all lottery games
Mystery Shopper Program (Work in Progress)
Retailer Redemption Compliance Program

4. Retailer Redemption Program
30% retailers - 70% clerks
Female operator 4 times more likely to be a victim
With media – thefts declined, however, retailer complaints doubled
More likely to steal the ticket than underpay the prize
Most claims submitted within 30 days of theft
Day of week/time of day was not a factor
Independent stores more likely than corporate stores
Random vs target stores – irrelevant
Region of state irrelevant; however, urban vs rural a factor

5. Sting Tickets

6. Dateline NBC
Request for claimant information made under the Freedom of Information Act in February 2008
Cooperative DA’s in Riverside County and Santa Clara County
Chris Hansen – “To Catch a Predator”
Ride-Along September & December 2008, January 2009 and March 2009
Program aired May 3, 2009

7. Current Statistics Number of Retailers Visited 550
Number of Attempted Thefts 98
Prosecutions:
Submittals: 72
Convictions 59
Pending: 13
Under Investigation: 7
Number of cases lost: 0
Administrative Sanctions: 82
(Contract Terminations/Probations)

8. Suggestions
Recognize insider fraud is occurring in places other than Canada and California
Educate and empower the consumer
Extract the retailer/clerk from the sale and redemption process
Analyze your claims
Initiate a compliance program – if not criminal oriented then administrative

9. Questions/Comments