Illinois Lottery Class Action Says Scratch-Off Winning Tickets Were Manipulated

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A group of Illinois lottery players have lodged a proposed class action lawsuit against the state’s former lottery operator, Northstar Lottery Group, for allegedly manipulating winning tickets.

The Belleville News-Democrat reports that the players are accusing Northstar of defrauding businesses that sold scratch-off tickets as well as lottery customers by manipulating the number of winning tickets available for purchase and misrepresenting the chances of winning.

To prevent players from hitting the jackpot with large payouts, they alleged Northstar intentionally discontinued scratch-off games before tickets were sold.

The lawsuit, which was filed Monday in St. Clair County, points to the drop in winning lottery tickets sold since Northstar took charge of the Illinois state lottery in 2010 during a move to privatize the agency.

“These practices were designed to inflate the profitability of the Lottery at the expensive of purchasers and retailers, all to result in increased revenues for Northstar,” the lawsuit alleges. “The practices had this effect.”

Specifically, the plaintiffs say that for the six years prior to Northstar’s management, Illinois awarded 87.5 percent of lottery grand prizes. However, once Northstar took over, that percent drastically dropped nearly 30 percent.

“This figure is comparable with the award percentages of other state lotteries,” the lawsuit contends. “Under Northstar, the Lottery award rate dropped to 59.6 percent. An award rate decrease of this magnitude is not explainable as happenstance or attributable to a lack of interest in the Lottery — indeed, ticket sales were up under Northstar. Rather, it reflects Northstar’s implementation of a practice of discontinuing games early when the profitability of the game was statistically maximized.”

Additionally, the lawsuit asserts that Northstar intentionally ended lottery games early so as to decrease the amount of prizes given to lottery players – this in an effort to maintain high profits.

“Because Northstar knew with a reasonable degree of certainty how many tickets had been sold for a game at any given time, how many prizes (and grand prizes) had been claimed for the game, and what the commensurate profitability of the remaining unsold tickets was, Northstar was in a position to, and did, discontinue games before winning tickets could be sold,” the lawsuit says.

The lawsuit further states that Northstar’s profits were “tied to the Lottery’s net income, thus giving Northstar an incentive to generate as much revenue as possible while paying out as little as possible in prizes and commissions. In short, Northstar had a profit motive in the Lottery.”

Among the seven grievances brought against NorthStar, which include tortious interference, violation of Illinois’ Consumer Fraud and Deceptive Business Practices Act, unjust enrichment and fraud, the plaintiffs are asking $50,000 for each of the counts.

The plaintiffs are seeking to certify the lawsuit as a class action representing two Classes of customers: retailers who sold tickets and customers who bought tickets.

The lottery players are represented by Robert Sprague of Sprague & Urban, Tor Hoerman, Kenneth Brennan and Tyler Schneider of Tor Hoerman Law LLC, Derek Brandt of Brandt Law LLC and Timothy Hoerman.

The Northstar Lottery Manipulation Class Action Lawsuit is Raqqa Inc., et al. v. Northstar Lottery Group LLC, Case No. 17L51, in the Circuit Court for the Twentieth Judicial District of St. Clair County, Illinois.