COLUMBIA — South Carolina could eventually award more than $33 million for a Christmas Day lottery glitch that mistakenly printed 42,000 winning tickets of a holiday game but not without lawsuits that could delay a final resolution for a long time, lottery officials told a legislative oversight panel Thursday.
Nearly $2 million in cash was paid before the error was discovered. If the state hands out the rest, advocacy groups could head to court because S.C. law says the lottery is not supposed to pay winnings for tickets printed in error. And if lottery officials decide not to pay out after the mishap, some of the "winners" would likely sue.
Lawsuits would all but guarantee the glitch won't be resolved any time soon. The whole episode is seen as damaging trust in the state's lottery.
"The lottery in our state has a lot at stake with our credibility," David Kornegay, a member of the lottery oversight panel, said Thursday. "It's problematic for me to say, 'These were misprints, and we're not going to pay.' "
Over two hours on Christmas Day, everyone who played Holiday Cash Add-A-Play won, because each ticket for a game that "plays like a child's tic-tac-toe" contained Christmas trees on all nine squares, instead of the maximum five that are supposed to be printed, said lottery Director Hogan Brown.
"This smells a lot like somebody's idea of being Santa Claus on Christmas Day" and hacking the system to make it happen, said Neil Robinson, chairman of the Education Oversight Committee and member of the lottery panel.
Gaming Laboratories International of New Jersey, hired by the lottery commission last month, officially began its investigation Thursday, Brown said.
Brown told the panel he doesn't anticipate the state bearing any fault. All of the game's equipment and technology belongs to Intralot, the Greek company contracted to handle South Carolina's online games over the past decade. The company, which is also responsible for monitoring the system, shut down the game after those two hours and informed lottery officials, Brown said.
By then, $1.7 million had already been paid by retailers, which are allowed to pay customers immediately for prizes up to $500.
Intralot initially reported the remaining prizes as worth $19.6 million, but that was based on a $1 bet on each of the 42,000 tickets that players can wage up to $5 on. The lottery agency's review of ticket sales determined the real remaining liability is $33.8 million, Hogan said.
Once the investigation is complete, the lottery commission will decide whether to pay the people holding winning tickets.
And if Intralot is found at fault, that company will have to cover all prizes awarded, said Tim Madden, an attorney hired by the lottery agency.
Regardless, it's highly unlikely to reduce what's available for college scholarships, school buses and other education programs funded through the lottery, they said.
"Other insurance policies could also come into play. It depends on how the investigation comes out as to when and where claims will be made, if any," Madden said.
Hogan said that's why the investigation is important.
"None of us would wish this had happened," he said. "We're trying every day to work hard to maintain the integrity of the lottery."