Remarkable run catches attention of state auditors

Between January 2015 and February 2018, one particular Colorado Lottery player had a run to remember.

In three years, this person won $600 or more from the Colorado Lottery’s Pick 3 game 47 times. The person bought every ticket except one from the same store. And the winner happened to be the only person who ever won $600 or more in a single drawing at the store during those three years.

The odds of that? Possibly as high as one in 33 million.

Unlikely winners such as this one caught the eye of state auditors in a routine review

last month of the Colorado Lottery’s operations. The Office of the State Auditor raised concerns with Colorado Lottery policies and issued recommendations in a 52page report, stating that the Lottery lacked sufficient processes to “identify and investigate unusual winning patterns and prevent restricted players from claiming prizes.”

The Lottery said its investigators have found no evidence of foul play in these instances, but its administrators agreed to investigate unusual winning patterns. Lottery officials also pledged to update the restricted player database, which lists people not allowed to play under lottery rules.

The audit found several other instances of unusual winning patterns between 2015 and 2018.

One person won $600 or more from the same game 24 times over the threeyear period, buying all the tickets from a store that he or she owned.

Another won $600 or more from the Pick 3 game 20 times over a ninemonth period.

None of these unusual winnings were investigated at the time. The audit did not reveal the names of the frequent winners.

The Office of the State Auditor, which conducts audits of the Lottery every five years, said it had not looked into the frequency of people winning in previous audits. But neither had the Lottery.

“The gist is: You have the data,” said Derek Johnson, team lead on the audit. “You just aren’t looking at it the right way.”

The Colorado Lottery generates hundreds of millions of dollars in revenue each year, a significant portion going to beneficiaries such as conservation projects and schools. In 2017, the Lottery generated $555 million in ticket sales, with $133 million going to groups such as the Conservation Trust Fund and the Public School Capital Construction Assistance Fund.

The report states that there was no Lottery policy requiring staff to proactively examine prize winner data to identify unusual patterns among winners, the amounts won or the retailers where winning tickets were purchased. According to Lottery policies, staff would only investigate specific lottery players and review appropriate databases if there was “reasonable suspicion that a criminal offense had occurred.”

The Lottery reported that the unusual winning patterns identified by auditors did not “rise to a level of reasonable suspicion that a criminal offense has occurred and are, therefore, not investigated.”

Auditors identified 10 individuals who each won 15 or more times from the Pick 3 game during the threeyear period. Combined, these 10 people won 18 percent of the highdollar prizes and claimed nearly 20 percent of the prizes paid out.

In Pick 3, players select three numbers from 0 through 9. Those selections can be three separate numbers or duplicates, with duplicates providing higher payouts if they hit. After selecting their numbers, players then can wager money — from 50 cents to $5 — on whether those numbers will appear in exact order, any order, front pair or back pair.

“The odds of winning Pick 3 are by far the highest of any other Lottery games,” Lottery spokeswoman Jennifer Churchill said. “The more you play, the more you win.”

The Lottery will, however, be making several changes based on the recommendations from auditors, Churchill said. These include quarterly reports on highdollar, highfrequency winnings, along with reports on retailers who claim high dollar amounts.

Auditors also detailed another concern in their report: an incomplete database of people prohibited from playing the Lottery.

Lottery employees, contractors and their immediate family members are not allowed to play the Lottery’s games. The rule is hard to enforce for players who win less than $600 because the Lottery does not collect identifying information when those tickets are cashed. So the list bars those people from claiming prizes above $600.

The audit found that six of the Lottery’s 120 employees, including the Lottery director, and two of its five Commissioners were not included in the database. That’s forty percent of the top brass who were somehow missing from the Restricted Play list. The Lottery director has been with the Lottery since 2014, the report stated.

On average, the audit stated, it took the Lottery nearly 4½ months from the date of hire to enter employees into the database.

The Lottery said its database has been fully updated in response to the audit. The Lottery also has updated its policy to ensure new employees are entered into the database within 60 days of their start date, Churchill said.

“These are all good things to look at,” Churchill said of the audit’s recommendations. “There’s always room for improvement.”