Ron Smith was surprised to learn in August that he was banned from claiming a $995 Illinois Lottery prize because he had been working a security job with the state agency that oversees horse tracks.

He continued to be amazed a couple of weeks later when a Lottery staffer called and asked him if he wanted to travel to Springfield and claim the cash on an apparent wink-and-nod basis. A telephone message later left at his house told him he could get the cash in Des Plaines, closer to his Will County house.

Smith, a retired suburban police chief, declined.

"I felt strongly it just wasn't right," said Smith, who spent 34 years as a Frankfort police officer, his last six months as chief before retiring in 2003. "If I deserve it and I should legally have it, then fine. ... I didn't want to do something as an employee that should not be proper."

Smith, 57, said he can't remember exactly who made him the first offer to "bring somebody in, sign over the ticket to them and we'll pay you the money." But his point is not that the woman committed an egregious wrong.

The employee, he said, sounded like she was trying to be accommodating when it comes to dealing with gambling rules that seem to defy logic for more than 2,000 Revenue Department employees.

No. 23 on checklist

The restrictions on who can gamble where (see chart below) were compounded in 2003 by Gov. Blagojevich's decision to consolidate operations of the state Racing Board and Lottery -- along with the state Liquor Control Commission -- into the Revenue Department to attempt to save millions of dollars.

That makes the Lottery off limits to all 2,050 Revenue Department employees -- something Smith said he wasn't aware of when he took his Racing Board job July 1, though he recalled signing a pledge that stated he would not bet at state horse tracks or own a horse in Illinois.

The Lottery information should have been No. 23 on a checklist Smith should have signed at employee orientation, Revenue Department spokeswoman Geraldine Conrad said. Regardless, Smith never should have been given an opportunity to claim the Lottery prize.

Complains about rules

"That is not Revenue Department policy, and whoever might have said that didn't reflect Revenue Department policy," Conrad said.

The department has begun reviewing policies on employees and gambling in the wake of a Chicago Sun-Times story about them earlier this month.

Smith, who has played the Lottery for years and once won $40,000 playing Little Lotto, said he isn't sweating the $995. He resigned from the Racing Board on Dec. 1 not because of the Lottery flap, but because his job as a security monitor required him to travel long distances to tracks such as Arlington and Maywood.

Still, "I've been in law enforcement 34 years. There should be a basis on which they make these [gambling] rules," said Smith, who complained to a Lottery official about them about a week after he initially was denied his claim. "That basis should be conflict of interest.

"I'm not sure what the conflict of interest would be" with the Lottery, he said. "I went around to the barns to check on horses and make sure they're not being doctored."

Ban Racing Board bets? 'Silly nonsense'

It would be "silly nonsense" for Illinois Racing Board members to be forbidden from placing bets at horse tracks because they're not only regulators of the industry but fans and boosters of it, too, the board's chairwoman said.

"It would be a shame to say that a horse-racing fan who loved the industry and was dedicated to the industry couldn't serve on the Racing Board because he couldn't bet," said Lorna Propes, who heads the 11-member panel. "This is about a sport. A 100-year-old sport that people love."