April 13, 2004 – Lottery operations have cost the V.I. government more than $330,000 — money that is supposed to go to schools and to help people with disabilities — since last October, the executive director of the V.I. Lottery told the Senate Finance Committee on Tuesday.
Paul Flemming said the problem is that Caribbean Lottery Services, which operated under contract with the V.I. government, has been unable to collect an estimated $700,000 to $800,000 from more than 20 vendors who sold lottery tickets. The government's share of that money comes to $330,000-plus, he said.
Flemming said it is the duty of Caribbean Lottery Services, the territory's primary lottery agent, to pay the government what is owed, whether it has collected the money from the delinquent vendors or not.
Robert Washington Jr., CLS chair, disagreed, telling the committee that his company's responsibility is to pay the government its share of what is collected from vendors. He also said he doesn't have the power to collect delinquent payments in the way that a government agency does.
"This is a business where operators make money in the margins," Washington said, "and when agents don't pay us, it creates issues." He said Caribbean Lottery Services and the V.I. Lottery need to work together to collect the money.
"We have agents who sold our product and didn't pay," he said. "The issue here is, why haven't we worked together to collect this money?"
Flemming said his agency has sent letters to the vendors threatening to take them to Small Claims Court, but Washington said that was not enough. He suggested that the assistance of law-enforcement officials is needed, since the money is ultimately the government's, not his company's.
The dispute between the CLS and the V.I. Lottery stems from an apparent ambiguity in their contract. Washington told the committee: "We've had extensive meetings between the Virgin Islands Lottery and the attorney general about this."
Attorney General Iver Stridiron arrived late for the hearing and said his reading of the contract is that CLS must try to collect money owed by vendors, but that it is not required to pay the government its share on money it can't collect.
"We go out and do everything we can to collect and get no support," Todd Washington, Caribbean Lottery general manager, said later. "A lot of people don't think they have to pay us because they think we're a separate lottery."
Aside from the outstanding debt, local lottery operations continue to have illegal competition on street corners, the senators were told. Government officials and CLS representatives both said the illegal sale of Haitian, Dominicano and Puerto Rican lottery tickets in the territory cut into legal sales. They said making such sales a felony, rather than the misdemeanor they currently are, would increase law enforcement officials' ability to investigate and prosecute offenders.
The territory has around 100 legal vendors selling Powerball and other drawing-game and scratch tickets, the senators were told, and the government operates 121 video lottery terminals.
Committee members present for the hearing were Sen. Adlah "Foncie" Donastorg, the chair; and Sens. Roosevelt David, Lewis Hill and Shawn-Michael Malone. Sen. Luther Renee was excused. Sens. Norman Jn Baptist and Ronald Russell were absent.
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