A friend and you bought Carolina Cash 5 lottery tickets jointly. He agreed to keep them. Your friend ghosted you big-time and now one of the tickets is a $1million winner. How will you get your half-million? The NC Education Lottery pays only those who have, signed, and submitted a claim for the ticket.
According to Billy Traurig (chief legal officer at the NCEL), these types of ownership disputes do occasionally occur.
The North Carolina State Lottery Act gives the NCEL the power to attempt to resolve these disputes. This team includes former officers of law enforcement who assist in investigating these cases. Traurig said, “We review the video of the person who purchased the ticket. We interview them to find out what statements they made. Interviews are done with other people to ascertain what they said.”
Although the security investigation team can usually determine the rightful owner in most cases, there are always unique facts patterns and legal issues when you pay out more than $6.7 million per day. Traurig and Eric Snider (legal counsel) step in to advise Mark Michalko, NCEL Executive Director, and in some cases other senior management personnel. In rare cases, the advice is to stop paying either party and let a judge decide who the NCEL should be paying. Even rarer cases are when the parties disagree with NCEL’s decision. In these instances, they can enjoin payment and litigate.
A Business Advisor
Traurig joined NCEL in April 2020 just as the pandemic was gaining momentum. He stated that sales rose during COVID, when people stayed home and enjoyed the excitement of playing the lottery and betting money they couldn’t spend.
Before joining the lottery, Traurig worked as sr. vice-president and general counsel at Hurricanes Holdings, LLC, which is the parent company to the Carolina Hurricanes, Gale Force Sports & Entertainment, and operator of PNC Arena. Traurig revealed in a 2016 interview that he was a glamorous worker, riding limos with Canes players, their girlfriends, and drinking endless champagne.
Traurig’s NCEL work is very similar to that of in-house lawyers, such as the policies, IP, contracts, and other projects. He did the same with the Canes.
He is increasingly viewed at the NCEL as both a business advisor, and a partner in business.
“I am someone who will help you achieve your business goals and not be an obstruction which legal and accounting were viewed historically as. What are you trying to achieve? Let’s figure out a way we can accomplish this, even though it may be different from what you have in mind. This is how I think the modern CLO should be operating.
At the main lottery office, you will find a Big Winners Room. Here you can see photos of winners and their huge checks, as well as all the hoop-la. Traurig was asked by the brand management and communications team to help make the room more glamorous.
Traurig stated that “our lease expires in 2026.” Traurig asked, “Is it worth the expense given that we’re coming up on 2023?” We can’t begin the project until July 1, 2023 because it will take us time to get bids. The timing issues were not an issue. I was just thinking about the return on investment.
Traurig’s inquiry led to the NCEL looking into a more modest refresh of the space.
Record Revenue
The record for FY 2022 was $3.88 billion. This is despite the fact that ticket sales have increased each year since its inception. Traurig stated that the sales are a sign of the state’s popularity with lottery games.
The lottery’s largest expense is the prize pool. Lottery players earned $2.54 billion last year in prize money, or 65 percent of the revenue. Players won 78 prizes worth $1 million or more. Lottery retailers earned $266 million in commissions for selling tickets. They received a commission of 7%.
The lottery administration expenses to operate the lottery, after prizes and retailer commissions, amounted to just 4% of the revenues.
Traurig explained that the lottery works as efficiently as it can because every dollar that isn’t spent on administrative expenses goes to education.
The lottery made a profit 24% by raising $928.8 millions for education at the end of the year. All the money raised was invested by the state into one of the supported education programs by the lottery.
930 Million is a Lot
The majority of complaints that NCEL receives don’t reach Traurig’s desk because NCEL’s security team responds to most of them. There are two types, however, of social media complaints that Traurig should be aware of. The first is that the drawings may be rigged.
WRAL in Raleigh broadcasts the games live. We were there to witness the three-time testing of both machines and their verification by a small group of lottery officials.
Another is “Well, the lottery should be funding education. So why is education in such bad shape?”
Traurig stated that although the lottery cannot pay for everything, $930 million is still a significant amount.
The lottery accounted for roughly 10% of the $13 Billion budget for NC public schools in 2018-2019. The majority of these funds were provided by federal, state and local governments.
You are a winner
The NCEL is usually contacted by winners of large prizes to inform them when they will be receiving their checks. Before claiming their prize, the lottery staff might recommend that the winner consult a lawyer or a financial advisor.
Although some winners prefer anonymity, the law requires that the public be notified about the winner’s name and details of the prize and game played. The date and place of purchase are also required.
There’s good reason. The integrity of our lottery is a major driving factor in how we operate. One way we can show that we have a clean lottery is to advertise the winners. The public would be able to question the legitimacy of the prizes if all winners were kept anonymous. This would dampen the enthusiasm for the lottery, which would decrease our sales and contribute to education,” stated Traurig.
We were greeted by a happy mood at the NCEL offices that day. Why not? Traurig smiled big and said, “These people hand out cash prizes to pay for kids to go school.” It’s not glamorous, but it’s entertaining and fulfilling.
The post The Fulfilling, But Unglamorous Life of NC Education Lottery Attorney Billy Traurig was first published on Attorney At Law Magazine.