Lotteries: Is there a scratch-off ripoff?

Posted: July 01, 2008

"WIN UP TO $1,000,000! WIN UP TO 25 TIMES!" proclaims Jack of Spades, a $10 scratch-off ticket sold in New Jersey.

Problem is: The $5,000 second prize is the biggest payout left.

Here's a good bet: Many instant-lottery players across the country don't realize they have no chance to win the top prize for some games.

Because it's already gone.

But some states, like New Jersey, keep selling such tickets - even though critics, plaintiffs and even other state lotteries, like Pennsylvania's, oppose the the practice as unfair to consumers.

"It's flat-out false. It's deceptive," said Rob Carey, a Phoenix attorney who has fought instant lotteries in Arizona, California, Colorado and Washington state.

Yesterday, the practice was brought further into the spotlight when a Virginia attorney released copies of an $85 million lawsuit filed last month over that state's instant lottery system.

Virginia should repay everyone who bought any of about 26.5 million "defective" tickets over the last five years, according to the suit by Washington and Lee University professor Scott Hoover.

The tickets make promises they can't deliver, he contends.

"10 PRIZES FROM $50,000 TO $100,000!" declares a Price Is Right game sold in Pennsylvania.

All 10 of them, however, have been claimed, according to Pennsylvania Lottery's website, www.palottery.state.pa.us.

The state's Golden Hearts game had 10 prizes of $50,000 but they've all been won.

In fairness, though, these two games are exceptions in Pennsylvania, which generally pulls games after the top prizes are gone.

"The lottery starts the process of closing out the process immediately," said spokeswoman Stephanie Weyant. "Within three weeks, they can completely close out a game."

So Golden Hearts will end July 18.

The Price Is Right is being kept alive only because it still has big non-cash prizes left - two trips to Hollywood, she said.

In Jersey, on the other hand, of the almost 80 active instant games, 15 - including three touting $1 million prizes - have played out their highest payouts, according to the state lottery's website, www.njlottery.net.

The state has no hard-and-fast policy for ending games, according to lottery spokesman Dominick DeMarco.

"Basically, we treat everything on a case by case basis," DeMarco said this morning. "... If they're selling, the retailers will keep ordering."

Warehoused tickets could even be shipped to retailers after the top prizes are gone, he confirmed.

"We've got no control over what retailers order. ... That's the economic end of it," he said.

The state took in $1.19 billion from instant-lottery games for the year ending June 2007, he said.

Concerned players, DeMarco advised, can go to the website, and click on "Instant Games," to find a complete rundown, including which prizes remain.

Visitors can see, for example, that all three $1 million windfalls are history for Explosion, which costs $20 a ticket. Only two second prizes are left, worth $10,000 each.

The third no-more-$1 million game, Gold Dust, had one $250,000 second prize left, as of Monday of last week.

Players might also stick to the newer games, DeMarco said.

Jack of Spades, Gold Dust and Explosion, which is being retired July 21, date back to last year.

Two of this year's cards, Lucky Spin and $1,000,000 Fortune, each had three $1 million bonanzas left.

"Keep in mind, we're putting new games at least twice a month," he said.

New Jersey may be having second thoughts.

Midafternoon, DeMarco called back to say, "We're aware that things can always be improved, and we're reviewing our policies and procedures in relation to the instant ticket games."

Attorney Carey calls the situation "unbelievable," especially since lotteries are "rigged" to guarantee a bigger percentage take than casinos make.

If a business engaged in such deceptive practices, the legal system wouldn't stand for it, he said.

"But because it's a state, not only does the attorney general turn the other way, but the courts do," he said.

So far, though, no court has ruled against an instant lottery on this issue, he said.

Pennsylvania, which took in $1.7 billion from instant games in the year that ended last June, tries to be fair to its players, Weyand said.

"The general thinking is that when people buy a ticket, they think they have a chance to win the top prize, and when that prize is gone, the lottery believes it's in the best interest of its players to close the game," she said.

Virginia decided to update its practices, to make sure retailers stop selling old tickets, after learning of the impending lawsuit, according to lottery director Paula Otto.

"We want to reassure our players that scratch tickets at retailers have top prizes as well as plenty of smaller prizes," she said.


Contact staff writer Peter Mucha at 215-854-4342 or pmucha@phillynews.com.

The Associated Press contributed to this report.

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