Lotto-cornering syndicate gets $27 million


RICHMOND, Va. -- Virginia Lottery officials said Tuesday they will award an Australian syndicate a state-record $27 million lotto jackpot even though questions remain about whether its attempt to buy every possible number was legal under state rules.

Lottery director Ken Thorson said changes in lottery rules made it unlikely anyone would ever be able to dominate the contest so thoroughly again.


At issue is a regulation that requires lottery players to purchase tickets at a licensed retail outlet. The syndicate had paid for many of the tickets by cashier checks delivered to corporate offices by courier.

'It was impossible for the lottery or the claimants to prove positively how the winning ticket was purchased,' Thorson said. 'Therefore we have given the benefit of the doubt to the player and will honor the International Lotto Fund's claim.'

The lottery has since clarified its rules on block purchases. Thorson said the revised regulations will make it virtually impossible for a player or players to corner all 7.1 million tickets.

'We are confident they won't be back in Virginia again,' he said. 'We've made it practically impossible, pragmatically impossible.'


Thorson acknowledged a factor in the decision was the prospect of a protracted legal dispute. Not only have the rules been clarified, a grocery chain that sold 2.4 million tickets -- including the Feb. 15 winner -- had asked the lottery for prior approval. That approval did not specifically mention how the tickets had to be paid for in each store.

'After consulting with our legal counsel, we determined we did not have a strong case,' Thorson said.

However, before the Melbourne-based syndicate can collect the first of its 20 yearly $1.03 million payments, federal and state tax officials will review how U.S. tax laws apply to foreign investors.

The lottery routinely deducts 20 percent for federal and 4 percent for state taxes. Thorson said he did not know what the tax implications might be for the syndicate founded by Stefan Mandel.

The fund reportedly used the same buy-every-number strategy to win 11 lotteries in recent years but those reports cannot be confirmed. Mandel told the Virginian-Pilot of Norfolk Tuesday that he's won two Australian lotteries. In terms of other wins, he said said simply: 'I've made a fair amount of money.'

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