Hey bro,

I believe that you cashed that check following the guidelines set by your owner. I am amazed how cheap ass your owner is; to make an employee pay for such losses. 

You can play lottery as long as you pay for it. The owner can prosecute you if you are shown in the video playing lottery without paying, because that would be stealing. The owner won't report you to lottery commission because you played lottery. He is just scaring you, neither he will report to INS. He shouldn't be hiring you illegally in the first place. He will be in trouble by doing so.

Bottomline: Just ignore him and look for another job. He doesn't respect his employee.