BY MALIA ZIMMERMAN AND JIM DOOLEY – Two vendors involved in an illegal gambling operation that extends from Palolo Public Housing to stores and restaurants in Chinatown and throughout Oahu have confessed to Hawaii Reporter that they sold lottery numbers in a black market operation, but said their motivation was love of gambling, not making money.
The two vendors said they booked wagers from overseas and provided other inside details of the underground business.
They are two of dozens of Southeast Asian vendors in an elaborate network of lottery number retailers selling chances to win a jackpot.
During a six-month undercover investigation into the network, Hawaii Reporter obtained video of several of these transactions at various restaurants and stores in Chinatown with the help of a team of reporters.
There are many other small businesses owned by Laotian, Thai and Vietnamese entrepreneurs, who in addition to their regular business operations, also sell lottery numbers. They reportedly operate out of Thai and Vietnamese restaurants, a travel agency, a hair salon, a food court, Asian grocery stores, and several vegetable and fruit stands. There also are salespeople who have no formal storefront, but sell numbers directly to customers including friends, relatives and foreign laborers.
In an hour-long meeting, the two vendors confirmed they worked for one of two Laotian sisters sometimes called the “Queens of Lottery.” The sisters, Khemma Pannga Xoumanivong, 63, and Bounkouam Khamphilavanh, 47, allegedly ran the lottery business from their apartments in publicly subsidized low-income housing at Palolo Valley Homes. The sisters receive welfare benefits and show few signs of wealth, other than a 2012 Mercedes Benz that one recently obtained. They also reportedly have financial and family ties to the Thai House restaurant in the Market City Shopping Center.
Federal agents and police raided the sisters’ Palolo apartments, the restaurant and several Chinatown locations two weeks ago in what the FBI said is an ongoing investigation of an illegal gambling operation.
The two vendors said they were recruited several months ago by one of the sisters. They agreed to participate, they said, because it was a sure way to have access to the game.
The two said they made little money, keeping 10 percent of all transactions and reinvesting those minimal earnings back into buying their own lottery numbers. They hoped to win the lottery, they said, because their businesses are struggling financially, and meeting expenses each month has been extremely difficult.
They asked to remain anonymous because they fear retaliation for sharing closely-held secrets of how the network operates, and also because they know they have broken the law. They are sorry for breaking the law, they said, and won’t sell the lottery any more.
Hawaii is only one of two states in the nation where any form of gambling is illegal, and in the case of this operation, it is unregulated, untaxed, and has no oversight to ensure winning bets are paid. The vendors said they don’t know of anyone who has won the lottery, and they never have, but held out hopes they would.
The vendors are more willing to talk about the network since the law enforcement raids April 30 and May 1. Agents from the Federal Bureau of Investigation, Internal Revenue Service and Homeland Security Investigations, along with Honolulu police, raided the Laotian sisters’ homes, cars and business on the evening of April 30, seizing a portable safe as well as records, receipts and ledgers.
The next morning, agents confiscated records and receipts from four lottery vendors in Chinatown’s Maunakea Marketplace, including Adam’s Mini-Market, Siamese Monster and a vegetable stand labeled “110-C.”
Hong Fa grocery store, outside the marketplace, was also raided.
The raids essentially halted the operation, at least for now, said the vendors. Since then, the sisters’ network has shut down, and the sisters have not communicated with their network about what to say to federal authorities or what to do next, the two vendors said.
There reportedly are similar networks that continue to sell lottery numbers for different organizers not tied to the Queens.
The vendors who spoke to Hawaii Reporter said most of their lottery customers are from Hawaii, they also included clients in Thailand and Laos, who placed bets over the phone. They said foreign customers believe it is more lucrative to participate in an American black market lottery rather than their own legal government lottery or illegal lotteries back home.
The vendors said they always checked with the Queens to see if lottery numbers clients wanted to buy – combinations of either two or three digits – were available. Only a certain number of combinations of each could be booked.
Superstition drives some customers to select numbers mentioned in the American or Thai news. For example, numbers containing entertainer Whitney Houston’s age (48) were quickly booked after news of her death broke February 11. Bettors in some cases added a 4 or 6 number before the 48 or 84, because 4 or 6 represent a woman (5 or 7 represent a man). Dreams about a specific individual can also influence wagers, the vendors said. Bettors may add the number 9 to the individual’s age in their next wager.
While there is no formal tie to the national lottery operated by the government of Thailand, the Hawaii version is a copy of that lottery. Winning numbers are drawn on the 15th and 30th of every month in Thailand and the numbers that win there are the numbers awarded here in Hawaii.
Two recent Hawaii lottery winners reportedly won cash prizes as high as $100,000 and $200,000.
FBI Special Agent Tom Simon confirmed with Hawaii Reporter on May 1, “The underlying investigation involves allegations of an illegal gambling operation.” Simon declined to discuss details of the case.
Simon confirmed on May 16, “No one has been charged with a crime or is being arrested at this time.”
Neither of the “Queens of lottery” could be reached for comment.
An employee of the Thai House restaurant said the owners aren’t commenting on the raid.
See our video reports