HOW TO AVOID THE LOTTERY SCAMS

LOTEO
LOTEO
Published in
4 min readMar 12, 2019

Surely you remember the recent article on how the blockchain technology can help to enhance the trust in the gambling industry including lotteries.

As we have described before, the blockchain has the potential to transform and disrupt the gambling industry and prevent its participants from frauds, scams and cheating by ensuring fairness, safety and transparency.

A lottery that operates on the blockchain allows for full transparency. Smart, self-executing contracts are built into the transaction, ensuring that the winner gets automatically the prize immediately after the drawing and that participants understand how their money is being pooled, how the number draw is being randomized, and how privacy is upheld.

Lotteries have been around for centuries, and, sadly, so too, have lottery scams. These scams cost millions annually and cause pain and suffering to unsuspecting victims. That’s the bad news. The good news, however, is that, generally speaking, these scams haven’t really changed much over the years and are therefore easy to spot, provided you know what to look for. Which is precisely why we’ve put together this list of the most common lottery-related scams and how to recognize and, therefore, avoid them also thanks to blockchain.

Basically we are going to teach the lottery participants how to spot the scams and this is the revolution we are bringing.

THE “CLASSIC” ADVANCE FEE

The advance fee scam is perhaps one of the most common lottery scams out there. In fact, it’s one of the most common online scams period. In essence, it’s not much different from the good old Nigerian scam where a message informs you that you have won a lottery that you never even entered.

You are then asked to pay some manner of processing fee, or provide sensitive financial data, in order to claim your fictitious winnings. According to a recent ACCC report, Australians lose 45 Million USD annually due to such scams.

With the transparency that the blockchain offers and audited smart contracts that send the prize to the winner automatically, you can easily check if you are the winner or not.

TICKET FRAUD SCAMS

Lottery tickets are worth money, so no wonder fraud and forgery are so rampant. Some lottery tickets, in particular scratchcards, aren’t always the easiest to forge but enterprising con artists have found lots of ways to alter or doctor them to suit the nature of their scam.

The big concern here is that it’s not always easy to tell whether your ticket has, indeed, been tampered with — which is just one of the reasons why we always recommend you play with reputable online lottery companies with all the data and transactions verified on the blockchain.

UNPAID PRIZES

MaxLotto is a case in point. Licensed in the Dominican Republic in 2001, the all-digital lottery advertised a worldwide jackpot of $100 million USD. By 2002, however, MaxLotto.com had disappeared from the face of the earth completely, along with its promised jackpot. None of the promised $100 million USD had been paid out.

Again, if the lottery has audited smart contracts impossible to be manipulated, this case could not happen.

RANDOM NUMBER GENERATOR MANIPULATED

Conventional lotteries are not much better in this regard: in 2017, Eddie Tipton, the former information security director of the American Multi-State Lottery Association confessed to rigging the random number generator and thus compromising lottery drawings in Iowa, Colorado, Wisconsin, Kansas and Oklahoma, gaining $2 million in illegal winnings before he was caught.

LOTEO is an innovative platform, the algorithms of which are completely built on Ethereum smart contracts. This is not everything we do in order to be fully transparent, we have an audit of the platform’s random number generator involving Trisigma, which is an accredited test laboratory specializing in software testing and certification in the gaming industry. Such a third party audit would prevent the manipulation in the last example.

Sadly, there are many other ways how to scam the participants because the fraudsters are always ahead in the online space with many fake lotteries and websites.

A serious project has its own whitepaper in which you can easily track the team behind and this is the starting point also for the LOTEO team how to demonstrate transparency.

Here are the features we recommend our community to check in order to avoid the fraudulent platforms:

· Audited smart contracts

· External audit of the Random Number Generator

· Open source code — Github commits

· Same code on the Ethereumblockchain–etherscan

These characteristics are priority for the LOTEO team and we take all these necessary steps to prevent any backdoor operations and possible manipulation. Our effort is currently in the process of being finalized!

The transparent LOTEO project is going to make a huge contribution to the lottery revolution.

Stay tuned for the next articles and educational videos to be published with the approaching launch!

For more questions do not hesitate to contact us as mentioned below or read the official whitepaper.

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LOTEO
LOTEO
Editor for

Loteo is digital automated lottery platform that uses blockchain and smart contracts to create a fully transparent lottery with bigger chances to win.