Is Your Scratch-off Ticket Stale?

“It’s for the kids.” Ah, yes. The great justification for just about any government program. Of course, it’s the central justification in most states for the Lottery. Revenues are directed into the education department’s coffers for use in schools. That’s all fine and good, but the agreement the ticket purchaser enters into with the state is: I give you a dollar and you promise to give me a chance to win a prize.

Then there’s this:

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.”

Basically, the state gave away all the prizes, but kept selling tickets. Talking with WAMU today, Mr. Hoover said this gives rise to multiple claims against the state, the most serious of which is fraudulent inducement to purchase the tickets.

He’s filed a claim with the state (basically a notice stage required before filing a lawsuit) alleging that the state has misled citizens and that it must rectify the situation. His lawyer told WAMU that they aren’t necessarily looking for damages, but are primarily looking for the state to acknowledge it’s doing something wrong and change the process.