Because the lettering seems intact, I'm wondering if the damage was done before the coin was completed.* *Sorry, I need to memorize all the coin-related terms!
alicechaos- Looks like a lamination error. Might command a slight premium, but you can't retire on it.
Pretty sure that is a lamination (a piece pealing off from the planchet). From the looks of its condition, it is worth as much in copper as to a collector.