Tuesday, June 10, 2008
Professor to sue Virginia Lottery
He claims the state continues to sell tickets even after all the top prizes have been won.
After a business finance professor tried a Virginia Lottery scratch game for the first time, he became suspicious about how the game was being run. It seemed to him that the rate at which Beginner's Luck paid out its $75,000 prizes defied the laws of statistics.
His concerns ultimately led him to conclude that the Virginia Lottery continues to sell tickets to its scratch games statewide even after all the top prizes for the game have been claimed.
Monday, a Roanoke law firm announced its intention to sue the lottery on behalf of Scott Hoover, an associate professor at Washington and Lee University who teaches applied business statistics. The letter that lawyer John Fishwick sent to the state claims the lottery has violated its contract with scratch ticket buyers by purposefully selling tickets that have no chance at all of winning a top prize.
"We estimate that since 2003, the state has sold over 26.5 million losing tickets in this way, pocketing an estimated $84.7 million in purchase prices from the shell game," Fishwick said. "The state cannot continue to boost revenues by knowingly selling its citizens defective tickets based on hollow promises of an opportunity that does not exist."
The letter, sent because state agencies must by law be notified of impending lawsuits, demands that the ticket purchases be refunded statewide.
Virginia Lottery spokesman John Hagerty said Monday afternoon that the agency could not comment on the firm's assertions because it had not yet received any documentation. "We are confident that all Virginia Lottery games comply with the expectations of our players, the regulations of the lottery and the laws of the commonwealth," he said.
At a news conference Monday at Fishwick's office, Hoover described how on July 27, 2007, he bought $5 scratch tickets for a game called Beginner's Luck, which offered top prizes of $75,000 and explicitly said so on the tickets.
Hoover began tracking the data the lottery posted on its Internet site about how often top prizes were given out in scratch games and realized "the numbers posted online violated basic laws of statistics."
Working with Fishwick's firm, he filed Virginia Freedom of Information Act requests and learned that by July 24, 2007, three days before he bought his tickets, all of the grand prizes had been given out for that particular batch. "When I bought these, there was zero chance to win the $75,000 prize," Hoover said.
Hoover alleges that the state has done the same thing in all its scratch games, leaving batches of tickets on sale after all the grand prizes from the batch are claimed, instead of telling retailers to pull the "stale" tickets and replace them immediately with a new batch.
When a game is popular, the state will in fact print a new batch of tickets, which has a new set of top prizes. Yet it will let the entire first run of tickets sell out, even if all of the top prizes for that run have been claimed, Hoover asserted. Thus it's possible for someone to buy a ticket from the old batch, thinking he's eligible for one of the new prizes, when that ticket has no chance of winning.
Fishwick said Monday that the lawsuit the firm is planning is intended to represent all Virginians who have lost money in this manner. Virginia courts do not allow class action lawsuits, but federal courts do. Fishwick indicated his firm has not yet chosen which venue to use.
A similar controversy enveloped the Texas Lottery last year after a San Antonio College mathematics professor publicly complained that the state lottery was continuing to sell its scratch tickets after there was no chance of winning any of the top prizes. A state senator took up the cause, and within three months the Texas Lottery announced it would start telling retailers to pull ticket runs as soon as all of the top prizes were claimed.
Devon Munro, another lawyer in Fishwick's firm, said the Virginia Lottery could do the same thing but has chosen not to, and showed no interest in doing so when contacted about Hoover's complaint.
News researcher Belinda Harris contributed to this report.




