Jerry Kopel

Lottery Cheats the Public

May 9, 2008


By Jerry Kopel

Can Colorado's government cheat the public as long as the state Supreme Court calls it a tort instead of a contract violation?

"Tort" is defined by Black's Law Dictionary as a private or civil wrong or injury independent of contact; a violation of some duty owed to plaintiff arising by operation of law and not by mere agreement of the parties."

Lavonne Robinson was a lottery scratch game ticket player. Eight years ago she brought a lawsuit against the Colorado Lottery Division basically claiming the lottery was cheating her and other scratch game ticket players.

A Colorado Supreme Court decision on March 24, 2008 provides us with this background:

"Robinson alleges the Lottery sells instant scratch game tickets for a significant period of time after all the represented or advertised prizes (the grand prize) are awarded or claimed.

"Thus the Lottery is selling instant game scratch tickets when the players have no chance of winning the grand prize. Robinson also alleges the Lottery is aware that the represented and advertised prizes are not available when these tickets are being sold and that the Lottery condones or encourages such sales.

"Robinson states that by ignoring the fact that it is selling scratch tickets that cannot win the prize used to induce purchase, the Lottery brings in millions of dollars per year in revenue from tickets that would not have been purchased if the players had been aware that the represented and advertised prizes were no longer available.

"Robinson contends that because of such 'wrongful conduct', the Lottery receives money from instant scratch game players hundred of times per day without providing those players with the chance to win what they were promised and for which they contracted.

"For example, Robinson alleges that she purchased 'Luck of the Zodiac' scratch game lottery tickets on July 24, 1998, and that the ticket was emblazoned with the words 'Win Up to $10,000'.

"However, the Lottery had already awarded the last $10,000 grand prize seventy-two days earlier. Robinson further states in her complaint that for the last five years she has purchased various instant scratch game tickets on a regular basis and that she played with the expectation that she could win the advertised and represented prizes."

We may never know whether Robinson's allegations were valid, since the Supreme Court held her breach of contract and unjust enrichment claims were or "could" be tort claims, and tort claims against the lottery are barred by the Colorado Governmental Immunity Act (CGIA) CRS 24-10-101 to 120.

Can future scratch game lottery players be protected? The state auditor is required by lottery law CRS 24-35-218 to do a thorough review of the lottery in 2008. Some member of the House-Senate legislative audit committee should make the state auditor aware of the Robinson case, to then determine how often players are putting in money with no chance of winning a large prize.

Of course, there are times when an unclaimed ticket could render the Lottery ignorant that all major prizes have been taken, but otherwise, the lottery statute should include a requirement that a game be ended when the Lottery knows there is no major prize for the ticket holders to win.

Instant scratch games are the major source of gross lottery revenues each year. More than 40 games are closed every fiscal year including games which still hold prizes not yet won, according to a yearly independent audit report required by statute.

It would not require any change in process to end games with no major prizes still available.

While the Lottery could lose some revenue by an early exit, it would gain more from the credibility of honest playing with the customers.

Does this issue fit under the audit language? CRS 24-35-218 (c) (X) provides: "Whether administrative or statutory changes are necessary to improve the operation of the lottery in the best interests of the state's citizens."

Any changes should be by statute and not by rule, so that decisions are not based on the discretion of a lottery director.

(Jerry Kopel served 22 years in the Colorado House.)

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