Connecticut lottery officials are coming under fire because they knew that the poker-based 5 Card Cash games were vulnerable to fraud by retailers in 2015, but did nothing about it.
Instead the officials waited nearly a year before notifying the Department of Consumer Protection about the problem. Ultimately the state lost about $1.5 million.
For the first time the Connecticut Lottery Corp.’s chairman and acting president, Frank Farricker publicly acknowledge the problem when he was called to testify before the legislature’s public safety committee. He said “lottery officials put revenues over security issues.”
Two years previously then-security director Alfred DuPuis told his superiors that 5 Card Cash was not secure and that fraud had been committed in other states where it had been introduced. The lottery corporation ignored his suggestions for making the games more secure and kept this information to itself and “took no action to mitigate the problems” according to report by consumer protection officials to the committee.
The games are subject to fraud because it is possible to tell by card symbols on the back of the cards instant winners, and “palm” the cards. DuPuis suggested at the time that the terminals selling the tickets could be programed to emit a “congratulations” message as soon as the tickets were ejected.
It was decided that it would be more fun for customers to discover they won when they scratched the cards. Eventually the “palming” problem was solved through a printing solution, but another fraud arose: the machines gave an indication that winning tickets were about to be printed.
Lottery officials discovered this problem and once again waited another 10 months before informing Consumer Protection. Eventually about 15 arrests were made and 5 Card Cash games were ended in 2015. Some money has been recovered from vendors and the state is still seeking about $1.4 million.
Under a withering grilling by Senate Republican Leader Len Fasano, Farricker conceded that the lottery “didn’t serve the state very well in the way we implemented” and “we made a mistake in putting revenue concerns ahead of security concerns.”
Fasano declared that the quasi-public lottery was “out of control.”
Due to the probe the Connecticut Lottery Corp. agreed to a dissolution last year. As part of that action the former Lottery CEO Anne Noble left the company in September. The severance package given to the CEO is also under scrutiny by the lawmakers.
During the hearing, last week Noble was in the audience, although she was not called to testify.
