Since 2018, Max McNamar has claimed 1,589 winning tickets of greater than $600 on Video Lottery and another 127 on Keno, hauling in more than $4 million from the Oregon Lottery.

That makes him the lottery’s winningest individual from those games through April.

Together, Regina Cantere and her ex-husband Steven Bogart racked up even more wins and money during that span: 2,612 claims of greater than $600 for $6.8 million.

Jimmy Pearson similarly collected $2.1 million over a three-year period preceding his March 2021 murder. Since then, his daughter Tawnya has taken his spot, claiming 637 prizes totaling almost $1.5 million.

None of these individuals actually won big prizes that frequently. Experts say that would be mathematically impossible.

Instead, they and others are drawing attention from the Oregon Lottery by working as so-called discounters or ticket aggregators: individuals who buy winning lottery tickets from players at a significant discount, then cash them in for face value, taking the difference as profit, after taxes.

Some lottery players are willing to sell their winning tickets at a discount to avoid the debts they owe the state, which would be taken from the prize money if they cashed in directly with the Oregon Lottery. Reasons for selling vary, but not all are on the up and up.

State officials say they’ve known about the practice for years and acknowledge that, while it’s not illegal in Oregon, the shadow economy is problematic on several fronts. The scheme enables tax evasion. It allows some winners to avoid paying past due child support that would be garnished from their prizes. It can incentivize sketchy discounters to manipulate honest winners into selling tickets, lottery officials say, by falsely claiming the agency will verify citizenship before paying up. And in other states, it’s been tied to money laundering, with individuals using discounting to conceal the origin of illicitly obtained money.

Others, like Cantere, Bogart, McNamar and Pearson, simply see it as a straight-up business opportunity. Discounters like them make no bones about the outlines of their business model, with at least one launching a website that openly solicits tickets from people who may be looking to skirt their financial obligations. Cantere, Bogart and Pearson, just like her father, are pawn shop owners or past operators while McNamar is a free roving entrepreneur working out of his car.

Lottery officials say they have no way of knowing how widespread the discounting practice is because play is anonymous. The Oregon Department of Revenue said it doesn’t have enough information to estimate lost tax revenues.

“We don’t love it,” said Matt Shelby, a spokesperson for the lottery. “We don’t even like it. But how do you curb it?”

Indeed, discounting is a problem nationwide. Yet it appears few of the 45 states with lotteries have tried to limit the scheme, and enforcement can be challenging. The North American Association of State and Provincial Lotteries doesn’t track the issue, so The Oregonian/OregonLive contacted each lottery nationally about regulations, receiving responses from 22 states.

The newsroom identified four states that have policies or laws to prevent or prohibit lottery discounting, including Massachusetts, which identifies high-volume winners and can halt their collection of prizes. After failing to address the problem for years, that state’s lottery director publicly warned schemers in 2019 that “if you think the Massachusetts State Lottery is a place to engage in money laundering, tax evasion or avoiding child support, those days are rapidly coming to an end.”

Oregon Lottery officials considered creating a similar policy last year but pumped the brakes, questioning how much enforcement would cost and if it would be effective. Officials did take two smaller steps, sharing information about “high volume claimants,” including a small number of potential discounters, with the Oregon Department of Revenue each month and enacting rules to prevent only retailers or store clerks from buying winning tickets at a discount, similar to restrictions in a handful of other states.

Kate Cooper Richardson, administrator of Oregon’s Division of Child Support, said the agency’s special collection team was unaware of the discounting problem. She said she’s all in favor of closing the loophole and increasing collections. The Department of Justice has seized some $3.5 million in past due child support and other debt between 2019 and 2023 from lottery winnings.

“If someone is going to a discounter to avoid back child support, they fall into that evasion category,” she said. “If I can make those (garnishment) numbers bigger, that’s real money to real people.”

For now, however, neither the Oregon Lottery, the Department of Revenue, the Department of Justice nor the Oregon Legislature has formally proposed a solution. So the practice goes on.

“I’m a businessman,” McNamar, who drives down to the Wilsonville payment center to redeem winning tickets up to three time a week, told The Oregonian/OregonLive. Asked about the Oregon Lottery’s concern with his business model, he added, “I’m a broker for God’s sake.”

A business born

McNamar, a 74-year-old Vancouver resident, sat punching the buttons of a video lottery terminal one recent afternoon at Kelli’s Café in east Portland as he discussed his business with a reporter. He was taking a break from his regular rounds, cruising the city to meet customers with winning lottery tickets they wanted to sell.

He used to be a regular on the terminals himself, seven days a week. Then in 2012, he was playing at a bar in Jantzen Beach when a guy walked by with a $1,500 ticket he was looking to sell for cash. They agreed on a $1,000 price, and his business was born.

Over the last decade, McNamar said he’s handed out thousands of business cards to individuals and bartenders around the metro area. “I will pay you CASH NOW for your large winning slot/keno payout slip,” it reads, “so that you do not have to travel to Wilsonville.”

“Anyone in any of these places, they all know me,” he said.

There’s some wiggle room on price. But he said his standard payout for a winning ticket is 70 cents on the dollar – “a starting point that’s higher than anyone else,” he claimed, and better than the local pawnshops, which he claims typically pay 60 cents on the dollar. He also offers a 3% finder’s fee to bartenders who refer prize winners.

“I go where I’m called,” he said. “If it’s daylight and I’m not doing something else, I’m usually there in 45 minutes. Most people with a promise of $1,000 will wait around for 45 minutes.”

McNamar no longer bothers to ask but said, based on previous conversations, the top six reasons customers are willing to sell at a discount are that they “don’t want anything to do with taxes;” they have no I.D.; they have no fixed address; they have no transportation to get to a payment center; they don’t want their spouse to know about the winnings; or they want the cash immediately so they can keep gambling.

He documents each purchase on a small receipt that shows the date, the supposed name and phone number of the seller, prize value and the purchase price. If someone doesn’t want to identify themselves, he tells them to scribble something.

McNamar keeps those records to document his business expenses, in case the Department of Revenue or the IRS come knocking. He then writes off his purchase price for buying winning tickets, paying taxes on only the difference between his cost and the winnings.

If the original ticket holder cashed in, they’d be taxed on the full prize, costing the state of Oregon an unknown amount in tax collections.

McNamar’s business appears to be quite profitable. Over the last six years, a 30% cut of the winning tickets he has purchased and redeemed would equal about $200,000 a year. He knows the Department of Revenue frowns on his business, and said officials have started questioning his and others’ documentation in recent years, driving out some of his competition.

McNamar scoffs at the tax scrutiny.

He said he doesn’t understand why the state feels it should be collecting taxes on the full winnings, given the revenue it’s taking in from players, and the volume of losses the average player racks up before hitting a jackpot.

“Hopefully you have a limit and stick with it,” he said of those players. “That doesn’t happen with the addicts.”

A problem nationwide

Lotteries across the country have taken disparate approaches to curtail ticket reselling, with some far more aggressive than Oregon.

Texas law makes it a felony for a prize winner to sell their right to claim a prize or a discounter to claim the prize of another winner. California bans the assignment of a winner’s interest in a prize to another person, regardless of the reason. If it determines the claimant wasn’t the winner, it can reject the claim.

Georgia instituted a policy of investigating frequent winners in 2014. In the following three years, it denied some $17.1 million in claims, according to The Atlanta Journal-Constitution. Those included cases where claimants were suspected of cashing tickets for someone else, when they couldn’t prove when or where they bought a winning ticket, or when they failed to disclose relationships with store owners. The Georgia Lottery did not respond to requests for more updated information.

In Massachusetts, one of the state’s most prolific lottery winners, an 81-year-old man, was sentenced to two months in prison for tax fraud in 2019 after purchasing millions of dollars of winning tickets at a discount to help winners avoid taxes. And last year, a father and son team were sentenced to five years in federal prison in connection with a massive discounting operation that involved dozens of Massachusetts convenience stores and more than 14,000 lottery tickets worth $20.9 million cashed between 2011 and 2019.

Massachusetts since 1971 has prohibited the unlawful assignment of lottery tickets. That state doesn’t offer video lottery but scratch-off tickets are particularly popular.

That state’s lottery investigates anyone who claimed 20 or more prizes of $1,000 within a year and suspends prize-claiming privileges for winners with volumes that officials deemed “factually or statistically improbable.”

In the last year, Oregon had 32 such winners surpassing Massachusetts’s investigation threshold.

“The Massachusetts State Lottery has addressed the issue of high frequency cashers in multiple ways, including working with federal and state law enforcement, suspending individuals who are in violation of our policy, and utilizing our own investigative tactics to deny prize claims when we are able to determine that an individual who is presenting a ticket is not the proper claimant,” Christian Teja, a spokesperson for the lottery, said in an email.

Oregon Lottery officials did write a “rough draft” for rules loosely modeled on Massachusetts’s. Anyone claiming 10 prizes of $1,500 in a single month would lose their prize-claiming privileges for the remainder of the month. The draft rules also included exceptions to the suspension, potentially allowing claimants to cash tickets expiring in the current month and to challenge suspensions.

State lottery officials have yet to move forward on those draft regulations. Melanie Mesaros, a lottery spokesperson, said potential concerns include how much it would cost to track data, conduct investigations and move through appeals, and whether the regulations could be circumvented by sending in a revolving cast of characters to claim prizes.

“We need to think through the resources needed to implement the rule and how it might work in practice,” she said in an email.

At least nine states, including Oregon, have adopted rules or policies governing prize claims or discounting specifically by retailers or their employees. The Oregon Lottery Commission, the five-person board that sets policy, adopted its discounting ban for those workers in December after “receiving reports that staff at some locations have been either personally purchasing winning cash slips at a discount or working with discounters or pawn shops.”

The Oregon Lottery could provide only a single example preceding the new rule, from an incident three years earlier. An employee at the Packard Tavern in Pendleton bought a winning ticket at discount. The owner, Timothy Guenther, admitted it happened, infrequently, and told investigators he knew other retailers were purchasing tickets, too.

Since the passage of the rule, the state has not sanctioned any retailer for the practice. It received a complaint in March alleging that, among other things, the owner of the New Bridgeview Deli in Rainier was buying jackpot tickets won at her establishment and at others.

When the lottery completed a site inspection a week later, officials confirmed the validity of some of the other issues listed in the complaint. But “the owner was adamant the accusation about purchasing cash slips was not true,” Mesaros said. “Because we didn’t have a history of complaints about that practice for this retailer, it was not included in the warning letter” that was sent to the business.

Chee Fong Chan, the owner of the deli, told the newsroom that “a lot of people ask me to do it,” including individuals who admit they owe money and can’t cash the ticket themselves. “But I don’t,” she said. “It’s illegal.”

Max Williams, a dedicated Keno player and frequent winner from La Pine, said he’s regularly witnessed the practice at the bars he visits.

“A lot of the bars will buy the tickets from you. I know for a fact it’s happening. All they have to do is have someone else, an employee, mail it in” and claim the winnings, he said.

Despite the new rule, Mesaros acknowledged the lottery has no immediate means to verify whether those claiming tickets work for retailers.

The business continues

The reasons for selling a winning lottery ticket for cash are laid out plainly on lotteryticketbuyer.com, a website run by Portland gold dealer Oscar Morante. Among them:

“You get cash now.”

“No reporting.”

“No tax paperwork.”

“No child support situations.”

“No collections situation.”

Text Morante and he sends back a standard reply. In it, he tells prospective customers they are “better off” to claim the winning lottery ticket themselves “unless you have legal problems such as child support, divorce, bankruptcy, or are on social security income, disability, etc.”

Morante offers to buy winning tickets at just 55% of face value. He used to claim a tax deduction for the purchase price of the tickets he buys, but said he no longer bothers after being questioned about his deductions by the Department of Revenue and the IRS, and having to pay an accountant to deal with the issue.

That’s why his purchase price is low, he said. After taxes, he said he’s making about 10% of the prize value.

“It’s not like we’re taking advantage of people. It’s a service that they need,” he said, adding that he started buying tickets during the pandemic, when the lottery closed its payment centers and had a backlog of prize claims, and some of the customers of his gold business needed cash sooner.

Morante is not among those who appear on the monthly list the Oregon Lottery provides to state tax collectors. “I’d love to be,” he said, but he’s not buying tickets in that volume.

It’s unclear precisely how the Department of Revenue is using the information from the lottery’s list, if at all. Some are legitimate winners of large, single jackpots.

Robin Maxey, a spokesperson for the department, said officials can examine multiple tax returns that may be addressing the same item of income or deduction, such as if someone claimed a deduction for the purchase price of a lottery ticket, to see if the ticket seller reported the corresponding income.

But proving tax evasion is harder, he said, as the agency has to prove intent. And convincing the Department of Justice to prosecute is another thing altogether.

“They would have to agree with us that there’s reasonable intent and be willing to charge someone,” he said.

Pearson, the owner of Pawn Central in east Portland, said her father was a big gambler who started buying tickets from other players when he was out at the bars playing. A big chunk of her reported winnings, she said, came from cashing tickets her father had purchased but hadn’t redeemed.

After his death, people started calling her, and she’s continued buying tickets, either when she’s out gambling or by arranging for people to come to the store. She said she buys the tickets personally, and the price varies depending on how much cash she has at the time.

She said she’s friendly with employees at the lottery’s Wilsonville payment center.

“It’s never been brought to my attention that anyone had any concern,” she said, adding that “I pay all my taxes.”

Down at Central Point Pawn Plus, located off Interstate 5 north of Medford, owner Cantere doesn’t advertise a ticket-buying service but has plenty of business anyway.

Word must have circulated, she said, as people come from the coast to central Oregon looking to avoid traveling to the lottery’s Salem office.

“I’m surprised how far they come for it,” she said. “People want it now. They don’t want to mail it in or make the drive to Salem, which is three and half hours from our area.”

Cantere said she’s heard that winners are sometimes looking to avoid past due child support but she doesn’t ask. She said she buys the tickets at 80 cents on the dollar and takes the deduction for the ticket purchases on her personal taxes.

“We don’t make a ton of money on it, but it’s easy money,” she said. “A little of a lot adds up.”

Through April, Cantere had claimed nearly $2.3 million in lottery winnings during the previous year, including nearly $800,000 in March. Her ex-husband, Bogart, claimed winnings of $933,343 during the same span, although he’s no longer cashing in.

Cantere said she now owns the pawn shop and will continue buying tickets.

“It may not last forever,” she said. “But I’m going to do it while I can.”

- Ted Sickinger is a reporter on the investigations team. Reach him at 503-221-8505, tsickinger@oregonian.com or @tedsickinger

- Senior data specialist Mark Friesen contributed to this report

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