The Indianapolis Star reported yesterday on a class certified in a case filed in Marion County, Indiana against the Hoosier Lottery alleging that the lottery defrauded purchasers of its Cash Blast scratch game tickets by misrepresenting the odds of winning the top prizes after most of those prizes had already been awarded.
I haven’t been able to hunt down a copy of Judge Gerald Zore’s opinion, but based on the descriptions of the order in the Star article, there are a couple of potentially troubling aspects to the case. First, the court reportedly based the certification decision in part on 49 affidavits from people saying that they bought tickets “because they thought there were more prizes than existed.” Based on the Star’s description of the allegations in the case, the argument is that tickets continued to be sold with no change in the description of the odds even after most of the larger money prizes had already been claimed. However, it does not appear that this left purchasers without the opportunity to win any prize at all. Consequently, this does not appear to be the type of fraud case where the plaintiffs will be able to prove that no reasonable person would ever have bought a lottery ticket if the true odds had been made known. Common sense and experience suggests that there were probably thousands of people who bought tickets without a thought for the odds. If so, it is curious that the court would find relevant the fact that 49 affiants said that they did rely on the advertised odds in deciding to buy a ticket. Certainly, there would be some purchasers who relied on the published odds, and others who did not. Individualized reliance and causation issues would seem to come in to play in this case just as in most other consumer fraud class actions.
Second, one of the named plaintiffs, Jeff Frazer, reportedly paid $40,000 for 4,000 $10 tickets and considered his purchases an “investment” based on the advertised odds. His co-plaintiff, Jeff Koehlinger, paid another $2,470 for tickets. It’s hard to imagine how the court was able to get around the significant typicality and adequacy problems seemingly inherent in these individuals trying to represent a class of lottery scratch game buyers.
See this MSNBC link for more on Mr. Frazer’s story. The blog WalletPop has a commentary on broader societal implications that this case brings to light about the human cost of state-sponsored gambling.