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Government Cracks Down on Illegal Lottery Sales

Nov 15, 2004 — Investigators are trying to end illegal lottery ticket sales that cost the Virgin Islands millions of dollars each year, officials said Monday.
Close to $100 million in illegal Puerto Rico and Dominican Republic lottery tickets are sold in the territory each year, taking money away from schools that depend on lottery funds, Lottery Director Paul Flemming said.
As many as 300 illegal lottery dealers canvas the territory each day, setting up card tables and folding chairs in front of shops where legal lottery tickets are sold, Richard Velazquez, lottery enforcement director, said.
Officials arrested five people on St. Croix for allegedly selling illegal tickets Friday and are investigating others, Velazquez said.
"It may not be a very popular decision, naturally. But it's the right thing to do," Flemming said.
The out-of-territory tickets attract gamers away from the local lottery with larger prizes, he said.
In December, the V.I. lottery plans to increase its grand prize by $50,000 – to $175,000 – to combat the $150,000 offered in the Puerto Rico lottery, he said.
Flemming said it doesn't make sense to buy illegal tickets since the odds of winning in the Virgin Islands are one in 32,000, versus one in 50,000 in Puerto Rico.
The five arrested – all Virgin Islanders – could face a $200 fine and one year in prison if found guilty, Velazquez said. They were released on their own recognizance later Friday.
V.I. Department of Justice investigators arrested 40 illegal dealers in 1997 in the last effort to take the out-of-territory tickets off the streets.
The V.I. lottery, launched more than two decades ago to help fund schools, owes the local government more than $4 million – failing to pay its obligation of 25 percent of collected revenue from ticket sales for at least the past eight years.
Ticket sales were so low the money was needed to cover operations costs, Flemming said.
He projects an estimated $330,000 loss this year.
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