Prize Payments for Lotteries
• Evolution of prize payment systems – Offline prize validation – Online prize validation – Introduction of barcodes
• Risk factors: Lotteries exposed – Player fraud – Retailer fraud
• Latest solutions – Weaknesses? – Solutions
Phase 1
• OFFLINE validation of prizes • VOID IF REMOVED number /
paper validation list • All winning tickets returned to
lottery for checking • Phone authorisation # required
for retailers to pay prizes of $50+
• RISK to lottery & retailers – “Cut & paste”
Late 1970’s /1980’s
1990’s 2000’s 2010’s
Phase 1
• OFFLINE validation of prizes • Solution: Retailer codes
– Code letters with list behind counter for retailers to check when small prizes claimed
Late 1970’s /1980’s
1990’s 2000’s 2010’s
Phase 1
• OFFLINE validation of prizes • Solution: Retailer codes
– Code letters with list behind counter for retailers to check when small prizes claimed
Late 1970’s /1980’s
1990’s 2000’s 2010’s
Phase 2
• Introduction of ONLINE VALIDATION of prizes – Growing range of games – Introduction of higher priced tickets – More complex with multiple games on
tickets
• BARCODES on tickets, used together with concealed digits under scratch panel
• RISK reduced for lottery – Risk of keying errors – Busy retail periods vulnerable
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Phase 3
• Introduction of Bingo, Crossword & other Extended Play games
• Required On-line validation of prizes – Too difficult for retailers to sight check – Not all lotteries had this facility
• Advanced retailer code system – 2-part “void if removed” code system
1970’s /1980’s Late 1980’s /1990’s
Mid 1990’s /2000’s 2010’s
Phase 3
• Introduction of Bingo, Crossword & other Extended Play games
• Required On-line validation of prizes – Too difficult for retailers to sight check – Not all lotteries had this facility
• Advanced retailer code system – 2 part “void if removed” code system
• RISK? – Potential for retailer fraud
1970’s /1980’s Late 1980’s /1990’s
Mid 1990’s /2000’s 2010’s
Phase 4
• Introduction of Failsafe™ barcodes – Player ticket checking devices in stores
• Fast & accurate validation for retailers
• Enabled players to check their own tickets
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Fraud exposed!
• CBS program “The Fifth Estate” – Oct 2006
• Retailer fraud exposed • Players being tricked by retailers • Validation systems being abused! • Instant games as well as on-line/terminal games
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Fraud exposed!
• “The report by the fifth estate added that over 200 lottery retailers in Ontario have won major prizes from 1999 to 2006”
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Fraud exposed!
• Ontario Lottery (Canada) under microscope – Player apathy/trust created vulnerability – Multiple techniques in use
• Tickets switched behind counter – Retailer prize codes created vulnerability – Poor systems & lack of management
control
• Not just Ontario – Other US & Canadian lotteries – Australia
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Solutions
• Strengthened security – Signature panel on front of ticket
• Instant & on-line games
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Solutions
• Strengthened security – Signature panel on front of ticket
• Instant & on-line games
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Solutions
• Strengthened security – Signature panel on front of ticket
• Instant & on-line games – “Scratch & Scan”
• Intuitive for players
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Solutions
• Strengthened security – Signature panel on front of ticket
• Instant & on-line games – “Scratch & Scan”
• Intuitive for players
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Solutions
• Strengthened security – Ticket checkers for players – Customer facing terminal
displays – Sounds from terminal for
winning tickets – Terminal freeze if prize of
$10,000 or more. Lottery calls & speaks to winner immediately while still in store
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Solutions
• Strengthened security – Position of Failsafe™ barcodes – Must be obvious if revealed
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Solutions
• Strengthened security – “Scratch to Cash”
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Solutions
• Player “Self-Check” system – No scanner required – Can check tickets at home
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Future
• Complex designs & large no of games – Design “wants” v security
“needs”
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Future
• Complex designs & large no of games – Design “wants” v security “needs”
• Second Chance Draws – integrity of process for entries & prize
draws
1970’s /1980’s Late 1980’s /1990’s 2000’s 2010’s
Future
• Higher priced games • High payouts...
“State attempts to stop use of lottery tickets for money laundering” - Israel
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