Lottery Tickets Used to Launder Money

One possibility: Make winner present some identification

The treasury and the Mifal Hapayis national lottery have agreed on binding articles designed to reduce money laundering through winning lottery tickets.

The purchase of winning lottery tickets is considered a prime loophole for money laundering.

Criminals establish contact with lottery winners - exactly how they do so is unclear - offering to buy the winning ticket for more than the lottery prize.

The winner gets more than he won, and the criminal holds a winning lottery ticket through which he launders ill-gotten money: Profits earned from drug dealing, prostitution, extortion and the like are presented as profits from the lottery.

To foil the criminals, the lottery will now be required to identify winners based on identity card number (teudat zehut), and to issue prizes via non-negotiable checks.

It will also be subject to official money-laundering supervision, and be required to appoint an official to be responsible for the matter.

However, Mifal Hapayis claims that these requirements are nothing new, and that it has been meeting them for years.

The lottery said that while the steps may have been codified as part of the written license, in practice it has been acting to stop money laundering for some time.

The lottery's spokeswoman said that the attempt to portray this as a new policy is intended to smear Mifal Hapayis.

Budgets director Kobi Haber is also demanding that the lottery take steps to further limit the transfer of winning tickets. Haber has asked the lottery and the authorities involved in preventing money laundering to discuss amendments to lottery tickets under which the purchaser's identification number would be recorded on the ticket before the lotto is drawn.

The lottery denied that such steps as requiring ID numbers on tickets were in the works, and that Mifal Hapayis operated according to international standards and norms.

TheMarker received two letters that Haber sent to the chairman of Mifal Hapayis, Shimon Katznelson, on the matter, requesting that the lottery make changes to prevent money laundering, including making changes in the tickets and the lottery's computer systems.