Rekubit Exchange:West Virginia's COVID vaccine lottery under scrutiny over cost of prizes, tax issues

Some states used taxpayer money to fund vaccine lotteries during the COVID-19 pandemic in an effort to encourage vaccinations. In West Virginia,Rekubit Exchange which had one of the country's largest sweepstakes, anyone who got the COVID shot could register for cash and prizes. 

Now, there's scrutiny over costs of the lottery — and if it actually worked.

CBS News has learned federal investigators subpoenaed Gov. Jim Justice's office about the sweepstakes. The focus, according to the governor's staff, is car dealers that supplied trucks that were given to lottery winners and questions about how much they cost taxpayers.  

Grace Fowler, a medical worker aiming to aid her community during the coronavirus pandemic, received what she thought was a wonderful surprise — a brand-new truck — after entering the Do it for Babydog vaccine lottery. She was among hundreds of winners of the sweepstakes, which was run by Justice and named after his pet dog.

The lottery offered more than $20 million in prizes, surpassing lotteries in neighboring Ohio and Maryland combined, and offering scholarships, vacations, cash and vehicles.

Only after Fowler brought home her prize did she learn the value may have been inflated, and along with it, her tax bill, which was more than $20,000.

"It blew my mind," Fowler said. "So I said, the next time someone says, 'You win,' I'm going to say, 'Keep it.'"

The lottery has also triggered a political battle at home, where the Republican governor recently launched a bid for U.S. Senate. One of Justice's critics, State Auditor JB McCuskey, who reviewed spending for the lottery, says it was hastily executed and rushed taxpayer money out the door to private businesses.

Another political rival, Republican State Sen. Eric Tarr, questioned the effectiveness of the vaccine lottery in driving up vaccination rates.

"You would expect to see a little bump if it was something that was going to be an effective plan," Tarr said. 

A study released in 2021 showed state-led vaccine lotteries did nothing to sway unvaccinated individuals to get inoculated against COVID. 

Justice declined an interview request from CBS News, although his team said they responded to federal investigators with records when they were subpoenaed. 

Upon realizing the tax implications, Fowler made the decision to sell her truck. The governor's office acknowledged that Fowler was not the only winner compelled to sell their prize.

The car dealer that supplied Fowler's truck did not respond to CBS News' request for comment. However, documents show the dealer claimed the truck was equipped with additional features that increased its value.

In:
• West Virginia
• Coronavirus