Lottery operators owe CNMI gov’t

Government coffers stand to collect an extra $37,729 from lottery operators because two of the companies either unconsciously understated their returns or remitted late their quarterly license fees during the third quarter of fiscal year 1999.

The findings were presented in a April 25, 2001 report submitted by the Office of the Public Auditor to Department of Finance Secretary Lucy Nielsen.

OPA’s report said an operator of one of the on-line games computed government revenues using a 26.5 percent compensation rate instead of the required minimum 35 percent rate.

Another operator, on the other hand, simply failed to remit quarterly license fees on the scheduled date, resulting in the government getting lower revenues during the quarter under audit.

After the computation error and late remittance were found out, OPA determined that government revenues for the said quarter should be increased from $123,603 to $161,332.

Subsequently, the OPA report said it was unable to determine the total number of tickets sold by operators from the two Number Game or Jueteng.

This was because Jueteng operators sold tickets with different number series as different colors and formats, making it impossible for the OPA to account for the actual numbers of ticket sold.

The OPA recommended four points to the Secretary of Finance to correct the operations of its lottery and Jueteng operations. The first called for Ms. Nielsen to request the company which miscomputed government share in the lottery operations to turn over the unremitted $7,584 owed to the DOF.

The second recommendation relates to the implementation of controls in the operation of Jueteng, which would allow government to better audit revenues generated by the game.

OPA also recommended that Secretary Nielsen seek the help of the Attorney General’s Office to put an end to the controversy regarding the awarding of lottery license to an agent of one of the lottery operators.

The last recommendation set by the OPA advised DOF to collect commissions from the lottery operators which failed to remit revenues on time.

The OPA letter report presented to the DOF was an audit of government revenues from the CNMI Lottery Operations for the third quarter of fiscal year 1999, ended June 30, 1999.