High-Tech Security Stands Guard Over Arkansas Scholarship Lottery

by George Waldon  on Monday, Sep. 28, 2009 12:00 am  

Lance Huey, left, director of security for the Arkansas Scholarship Lottery, and Remmele Mazyck, deputy security director, watch over the launch of the state's first four games.

Some people were baffled to see the Arkansas Lottery Commission crank up the publicity machine and shine the spotlight on its west Little Rock distribution center.

Inviting the media to see officials break the seal on the first truckload of scratch-off tickets arriving on Sept. 14 from the Scientific Games International plant in Alpharetta, Ga., was a good promo opportunity.

But some wondered if the event wasn't a major breach in security protocol and questioned the wisdom of revealing the exact location of 26 million lottery tickets, conceivably worth $48 million in potential winnings.

"More than one person asked me, 'Isn't that kind of stupid to tell everyone where the tickets are stored?'" said Lance Huey, director of security for the Arkansas Scholarship Lottery. "The answer is no. If you break in and steal anything, it's just a bunch of worthless paper. The tickets have no value at all."

Thanks to the wonders of high-tech wizardry, a lottery ticket in the warehouse is only so much glossy wood pulp until its status is changed after passing through multiple security scans.

If someone tries to cash in a stolen ticket, a required scan will recognize the "winner" as a rogue and won't allow it to clear security.

The system also will trigger an alert at the lottery's downtown Little Rock data center informing Huey's office that someone at a specific location is trying to redeem a suspect ticket. The security staff also receives an automatic Blackberry alert on the situation.

The same scenario will thwart criminals with aspirations of hijacking a lottery truck or doing a smash-and-grab at a convenience store selling tickets. Huey said a stolen lottery ticket will leave a "Hansel and Gretel trail" for investigators to track and follow.

Lottery tickets can have up to 21 layers of specialized coatings and inks, including a layer that gives the cards fingerprint-like identities.

"We think if it's like other states, a thief will steal everything but a lottery ticket," he said.

'System Security'

Huey leads a five-member staff that coordinates background checks on lottery personnel and retailers, checks in lottery ticket shipments, oversees security at lottery facilities, investigates lottery complaints and works with local law enforcement personnel on lottery-related crime.

"People think this is physical security, but it's really system security," he said.

About 1,700 retailers have applied to sell lottery tickets and plug into the system. The first tickets, scheduled to go on sale Monday, will cost $1, $2 or $5, with cash prizes ranging from $1 to $100,000.

Despite weather delays in setting up the satellite-linked stations, lottery officials expect to have 1,500 outlets operational when the lottery starts play with four instant-win games: "Arkansas Riches," "Cash Bonanza," "Jumbo Bucks" and "3 Times Lucky."

"There are no deal-killers on the horizon to not launch on [schedule]," Huey said last week. "We'll probably have some snafus right off the bat, but we will have extra security measures in place to help work through the problems."

David Barden, vice president of gaming at the Arkansas Lottery, said the current rollout of equipment includes ticket-reading equipment, so customers can check their own tickets and verify their winnings.

"Without it, there's more of an opportunity for a bad retailer to not pay properly or not pay at all," said Barden, who came to Arkansas from South Carolina with Lottery Director Ernie Passailaigue. "It also keeps people from standing in line to have their ticket checked, so retailers don't have to spend any extra time with this.

"We didn't have that in South Carolina, and it was something we always wanted to do. We had started the process but hadn't finished."

The equipment is part of a $15 million-plus build-out of the state's lottery network by Intralot, with worldwide headquarters in Athens, Greece, and U.S. operations based in Atlanta.

The company operates a data center in North Little Rock's Northshore Industrial Park, which mirrors the lottery's data center in downtown Little Rock. Among other things, the Intralot facility serves as a system backup.

"We do our own firewalls," said Steve Beck, regional director for Intralot. "It's our proprietary software also. That includes accounting, licensing. Anything that has to do with a retailer comes through our office."

The company expects to build a staff of up to 40 that will include 13 field technicians and 20 programmers as part of its seven-year Arkansas contract. Intralot also has lottery contracts in Nebraska, Montana, Idaho, New Mexico, Ohio, South Carolina, Vermont, New Hampshire and Louisiana.

No Badges?

Lance Huey, the amiable former Grant County sheriff, was hired for his good rapport with law enforcement officials around the state as much as his law enforcement background.

His familiarity with Arkansas people was considered a boon to help connect the unfamiliar lottery with the state.

"That's why I was brought on, to bridge that gap," Huey said.

His third-floor digs overlooking Capitol Avenue have the vibe of a sheriff's office with a 10-point white-tail mounted on the wall behind his desk, a mallard on the wing frozen in flight on another wall and a healthy dose of plaques and photos dominated by family and law enforcement paraphernalia.

He and his staff can't arrest anyone, and they don't have any police powers. For now, Huey doesn't foresee a need for that to change either.

Louisiana is among the states that granted its lottery security staff police powers, but officials there used their badges only once, when a local sheriff refused to arrest a lottery criminal in his jurisdiction.

Remmele Mazyck, deputy security director, also came to Arkansas from South Carolina, where he was the No. 3 man in the lottery security chain of command. His experience with lottery security was among his chief qualifications.

Two part-time positions round out the lottery security staff. These two will work on the draws for the random number "Cash 3" and "Cash 4" games, with current plans calling for daily draws at 1 p.m. and 7 p.m.

Winners in these lotteries, which aren't scheduled to start action until Nov. 1, are chosen by a random number generator selected randomly from one of three machines.

The drawings will be held in a secure room on the restricted-access third floor of the Union Plaza building in downtown Little Rock. The room has a viewing window so that escorted visitors with security passes can watch a draw.

Both the third and first floors, home to the lottery claims office, are equipped with walk-in vaults. The vaults are leftover amenities from the building's former owner, Union National Bank, not a repository for mounds of lottery loot.

"We're not up here sitting on bagfuls of money," Huey said. "All prizes will not be issued in cash."

In fact, the claims office will only pay winnings by check. In-store cash payouts are limited to $500 or less.

A codified security feature spells out an ineligible player list that extends from lottery employees to their spouses, children, in-laws, parents, grandparents and even grandparents-in-law. The Arkansas lottery law is one of the strictest with this nod to anti-nepotism.

Huey said this part of his job was the source of some ribbing from his dad: "He said he wasn't happy that he wouldn't get a chance to recoup all the money spent raising me."



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