A class-action lawsuit filed Monday in St. Clair County alleges the company that managed Illinois’ lottery defrauded businesses that sold scratch-off lottery tickets as well as individuals who purchased them.
The suit accuses Northstar Lottery Group of manipulating the number of winning tickets available for purchase and discontinuing scratch-off games before large payouts, depriving customers from jackpots.
The company misrepresented the actual chances of winning jackpots, the suit alleges, and violated contracts with ticket vendors, who would have earned commissions and bonuses from sales.
“We allege that when Northstar realized that it was ahead of the consumer in a particular game, meaning it had sold a number of tickets that did not include the winner, it would stop the game and lock in its profits. The winning ticket never got sold,” said Derek Brandt, one of the attorneys on the case, with Brandt Law of Edwardsville.
The plaintiff attorneys are asking the court to certify the suit as a class-action representing two classes of customers: retailers who sold tickets and customers who bought tickets.
For now, the only named plaintiffs are:
▪ Raqqa Inc., which owns Fairview Lounge in Fairview Heights;
▪ Michael Cairo, of Cook County;
▪ Jason Van Lente, of Cook County; and
▪ John Bean, of St. Clair County.
Retailers buy tickets with their own money, earn back the expense in commissions on a small percentage of sales, and are commonly credited when tickets go unsold, according to Brandt, who represents Raqqa Inc. The vendors, however, also have the same incentive as people who buy the games, as they may also receive bonuses from selling winning high-dollar tickets.
Gov. Bruce Rauner fired Northstar as the state’s private lottery manager in 2015. Northstar continues to run the Lottery under the provisions of its contract until a replacement is found.
The suit alleges that Northstar “knew that some grand prizes would never be awarded and/or that the stated odds of winning were false or materially misleading.”
The suit says Northstar’s compensation “was 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.”
The suit seeks compensatory damages for the plaintiffs, but does not specify an amount.
A Chicago Tribune investigation in December found that for the lottery’s 17 biggest scratch-off games beginning in 2011 and ending in 2015 under Northstar’s management, the lottery did not award more than 40 percent of the grand prizes designed into the games.
The Illinois Lottery declined to comment.
Northstar representatives were not immediately available for comment.
The law firms filing the suit are Sprague & Urban, of Belleville; TorHoerman Law, of Edwardsville; and Brandt Law, of Edwardsville.