California State Controller Betty T Yee has ruled that the California Lottery didn’t ‘maintain adequate controls’ during a promotion that gave 30,000 scratchers tickets, worth more than $138,000, to ‘The Ellen DeGeneres Show,’ which handed most of them out as gifts to audience members.
On Tuesday, the report by Yee was released a year after an investigation was launched into the giveaway, which some called an inappropriate gift of public resources. The state controller recommended that the lottery changed its policies and practices to prevent similar problems in the future.
The report stated, according to the Los Angeles Times: “Our review determined that the lottery did not maintain adequate controls over The Ellen DeGeneres Show Scratchers ticket promotion’s approval process, agreement negotiations, security of promotional Scratchers tickets, and purchases of add-on media.”
Lottery officials disagreed with some of the controller’s findings, arguing that the scratchers, which were given to the show’s audience in December 2019, provided positive publicity that they believed boosted sales of lottery products and was worth more than the value of the tickets provided.
Every audience member was given a $500 bundle of 72 scratchers tickets as a way to promote the games. The total face value of the tickets was $212,500, but Yee’s office put the value at $74,000 less. A review was launched by the state controller after a whistleblower complaint filed by lottery workers said the giveaway was a ‘misuse of funds’ and that some of the 425 packets were not properly accounted for.
Critics of the giveaway also noted a 2019 video posted by YouTube personality Colleen Ballinger saying that a friend affiliated with ‘The Ellen DeGeneres Show’ gave her a $500 packet of Scratchers.
Yee’s report said the lottery lacked sufficient processes and procedures for the promotion’s approval and “did not adequately prevent the risk of promotional Scratchers tickets going to unintended parties.”
California Lottery officials said in a written response to Yee: “The lottery respectfully disagrees with this finding. No gift boxes from the promotion went to unintended parties and tickets were securely handled throughout the promotion.”
The controller said in her report that 35 gift boxes containing lottery tickets were found at the Warner Bros Studios lot and were retrieved eight months after the show was taped.
The review also said the lottery “lacked adequate supporting documentation to justify the purchase of add-on media, resulting in $100,000 in questioned costs”. The total expense for the promotion, including gift boxes and on-stage props, was estimated to be $449,000.
Yee recommended that the lottery developed better internal review policies and security for tickets.
Lottery officials said in their written response that the promotion was allowed by law and that proper procedures were followed. “The Ellen Show promotional program was fully reviewed and appropriately approved in a timely manner,” the statement read.