Auburn store's lottery ticket "pinning" scam exposed by sharp-eyed player

California Lottery follows up Auburn resident's lead, shuts store sales down
By: Gus Thomson, Journal Staff Writer
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Auburn's Doug Randall said he felt betrayed.

Then he felt like he just as well might have thrown his money away.

But then he took action.

Randall discovered what he thought was a scam going on at an Auburn store involving California Lottery Scratchers tickets.

He had bought two tickets for $10 apiece. One called "Lucky for Life" promised $5,000 a week for 25 years. The other was supposed to give Randall and other players a chance at a $1 million fortune.

When Randall looked closer at the tickets - neither of them winners - he saw that someone had "pinned" them before he bought them. Pinning is a way for an employee of a business selling lottery tickets to expose, with a small scratch on the latex top layer of the ticket, a unique three-digit code. That, and the bar code, show whether a ticket is a winner.

"He already knew it was a loser when he sold it to me," Randall said.

Randall had family members go back to the store, buy more tickets and record the second transaction on video. The video shows a store employee taking a ticket from a pile behind the roll of lottery tickets. And when it's pointed out to him, he rips the second ticket off the roll. The ticket not taken from the roll was found to also be tampered with, Randall said.

Randall shared his evidence with California Lottery's investigation branch April 6. State investigators did their own undercover purchase and days later, the store's lottery tickets and machines were removed.

"I've been buying tickets there for a couple of years," Randall said. "I might as well have been burning that money or flushing it down the toilet."

Randall said stores that sell lottery tickets should be held to a higher trust. He’s also now wondering if a ticket he might have bought went to someone who nefariously pocketed a large lottery prize.

The name of the store is not being published because no criminal charges have been laid and it's not known whether the store owner or an employee could be charged. The Journal asked for a response from the store owner but had not been contacted by press deadline.

Russ Lopez, California Lottery deputy director of communications, said that investigators will do a thorough report on complaints and then forward the information to the county's district attorney's office for prosecution if it is deemed warranted. The lottery's 37 investigators field more than 2,700 reports a year, according to the California Lottery. But they have no authority to arrest or charge a suspect with a crime. 

Randall's report was more thorough than many because he provided an extra layer of proof, Lopez said.

Even so, Randall said that the California Lottery investigator he worked with was wary because of the possibility he was an irate customer with an ax to grind. As it turned out, that wariness wasn't warranted and the lottery tickets were pulled from the store soon after his complaint.

"We look at everything but we listen to our players," Lopez said. "He made an allegation and he had proof, which is wonderful. It helps the investigation."

Lopez said the store owner could appeal the decision to take tickets and machines away. A return would be partly based on the probability of it happening again, he said.

"For us, it's a serious matter," he said. "The investigation in this case came to a conclusion that it was indeed a very major problem that warranted pulling tickets and machines."

Lopez said most California Lottery retailers are honest business owners who love to sell tickets, because of the commissions they generate.

"This is a rarity," he said. "People have to be very good with it or they risk losing their license."

The tickets themselves use a specially made latex that can't be purchased on the open market. That makes it harder for pinners to cover up their scratches.

"Pinning" is difficult to get away with because tickets can be tracked and better equipment is making investigations easier, Lopez said.

"There are lots of checks and balances," he said.

For a sharp-eyed Auburn resident, the checks and balances started soon after he bought the ticket.

"The main thing is to look at the bottom (strip of latex)," Randall said. "If anything's missing, it's a tampered ticket."