Appeals court reviews Lottery Commission's revocation standards in Rai brothers case
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Summary
The Rai brothers appealed permanent revocations of their lottery licenses tied to an alleged resale scheme; appellants called the agency’s 300-ticket threshold arbitrary and questioned reliability of cooperating witnesses (the Jafars), while the Commission defended its sanction, pointing to corroborating sales data and inconsistent accounts by the brothers.
The panel considered a challenge to the Massachusetts State Lottery Commission's imposition of permanent revocation against the Rai brothers, who were found by the Commission to have sold large numbers of tickets linked to a multi-year secondary-market scheme. Appellants argued the Commission's use of a 100/200/300+ 'tranche' system—where 300 or more linked sales triggered permanent revocation—was arbitrary and was imposed after the agency already had the data, effectively tailoring the standard to the result.
Counsel pressed that the Commission relied on written statements from cooperating witnesses (the Jafars) obtained after their own convictions and that those statements lacked sufficient indicia of reliability. "Those statements should not have been considered based on the corroborating evidence the lottery applied," appellant counsel said, noting the data spreadsheets did not show when or how tickets flowed to the Jafars.
The Commission defended its determination, urging the court to afford deference to agency sanctions and to the hearing officer’s credibility calls; counsel emphasized corroboration in the record, significantly higher ticket counts linked to the Rai stores than to other sales agents, and inconsistencies in the Rai brothers' explanations when confronted with documentary evidence. The panel questioned the fact-finding and standard-setting process; the matter was submitted for decision.