Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, March 30, 1992 TAG: 9203300166
SECTION: VIRGINIA PAGE: A-3 EDITION: METRO
SOURCE: Associated Press
DATELINE: RICHMOND LENGTH: Medium
Virginia lottery officials want to keep syndicates like the International Lotto Fund - which won last month's record $27 million jackpot - from striking again, yet not be overly restrictive.
"There is a reluctance . . . to adopt any fixed limitation that would prevent any individual from buying as many tickets as they want to buy," said Lottery Director Kenneth Thorson.
"This goes back to the Virginia tradition, that government is loath to impose restrictions on people's individual behavior," he said.
Thorson's counterpart in the Australian state of Victoria takes a harder line and urges U.S. lotteries to follow suit.
"All the states should, as a matter of urgency, pass legislation to stop this," Peter J. Gillooly, general manager of the Victorian state lottery, told The Virginian-Pilot and The Ledger-Star. "The game of lotto is for the man in the street, not for a profiteer."
The International Lotto Fund, which won the Virginia Lotto on Feb. 15, is a commercial syndicate under Australian law. It profits by taking money from investors who pool their cash to play lotteries.
Victoria banned such syndicates in 1987, after lottery guru Stefan Mandel's group won a million-dollar jackpot there. The law was tightened in 1990 after Mandel found a loophole and won again.
Lottery officials in New Zealand also clamped down on commercial syndicates in 1988, when Mandel tried to help a syndicate there.
"The mood in New Zealand was we didn't want the big syndicates stealing our lottery," said David Bale, who heads the New Zealand Lottery Commission.
But Thorson said a ban on commercial syndicates would have to come from an agency overseeing securities and investments. Other U.S. lottery officials question whether an outright ban is even lawful.
"How do you know it is constitutionally sound and legally enforceable?" asked Wally Hedrick, Idaho's lottery director.
Others fear such legislation might squeeze out informal groups that play the lottery.
"I don't want to make it too restrictive for the guy buying 150 tickets for an office pool," said William G. Mays, who heads the Hoosier Lottery Commission in Indiana.
Thorson has said he is not keen on big syndicates coming into Virginia, even though the state made a lot of money from the Australians' gambit.
About one-third of the money spent on lottery tickets goes to the state. Virginia received about $1.9 million just from the Australians' purchase of at least $5.6 million in tickets for the Feb. 15 drawing.
But in the long run, syndicate play could anger small-time bettors, driving down ticket sales, Thorson said.
Under new rules passed since the $27 million jackpot, retailers must give low priority to large-block ticket buyers. They also prohibit retailers from selling ticket blocks worth more than five times a store's bond ($10,000 for most stores) without written permission from the Lottery Board.
The rules also prohibit retailers from being paid additional fees by ticket buyers. It is suspected that chains got extra money from the Australians to process their bulk ticket orders, lottery officials said.
Virginia's new rules "are sufficient to discourage the possibility of them being able to pull this off again," Thorson said.
Meanwhile, Mandel said that by letting him play, Virginia officials showed greater insight than those in Australia.
"I really believe in the intelligence of people," Mandel said in an interview at his Melbourne office. "If they analyze it logically and they realize it's good for the lottery, they won't stop it."
by CNB