Texas Lawsuit Charges a "Civil Conspiracy" Exists Among the TLC, Gtech and Scientific Games ...

Story As It Appeared in the
San Antonio Express News

Players file class action lawsuit
TLC named As "Co-Conspirator"

Posted: Wednesday, June 9, 2004

Scratch-off game policy rubs some the wrong way
Web Posted: 06/09/2004 12:00 AM CDT

John MacCormack
Express-News Staff Writer

When she can afford it, Elva Espitia buys up to $75 worth of scratch-off lottery tickets a week, hoping for the big payoff, like the $500 a week for five years offered on the latest Club Casino card.

"It's my vice. I don't smoke or drink," she said Monday as she left Lucky's, a downtown San Antonio convenience store, with a fresh Club Casino ticket in hand. "I've won $1,000 once and $500 about 10 times."

Like many of the customers who pump $2 billion a year into the Texas Lottery Commission's scratch-off games, Espitia had never noticed a fine-print disclaimer on the back of each ticket.

It reads: "A Scratch Off game may continue to be sold even when all the top prizes have been claimed."

In other words, when Espitia bought that Club Casino game card Monday, all the $500 a week jackpots might already have been claimed, leaving her playing only for lesser prizes.

"It's not fair," she said when the disclaimer was pointed out. "It's a come-on. I'm buying tickets. I'm thinking I'm going to hit it, but it's already gone."

According to a lawsuit filed this week in Corpus Christi, the Texas Lottery Commission (TLC) and two companies involved in the scratch-off games have been playing Texans as chumps for years.

The suit names Gtech and Scientific Games International, which manufacture and run the lottery games under lucrative contracts with the state.

It seeks class-action status for everyone who bought a scratch off ticket in Texas since 1999, a group that could comprise hundreds of thousands of people or more. A judge has yet to address that issue.

"People buy the scratch-off games to win the prize (shown) in the big pretty pictures on the card," said lawyer Mitchell Clark of Corpus Christi, who filed the suit on behalf of a Nueces County resident.

"This case is about the TLC and its contractors and retailers cheating the consuming public. They are not allowing a game of chance to be a game of chance. For some consumers there is no chance, and that's not right," he said.

Among scratch off games now advertised on the TLC Web site are Monte Carlo, with a $250,000 top prize; Corvette Cash, with an "instant win car," and 10 Times Lucky with a $25,000 prize.

And, according to the suit, the TLC will sell tickets for these games even after it knows all those top prizes have been claimed.

The lottery commission is immune from being sued, but the lawsuit names it a "co-conspirator."

TLC officials referred questions about the suit to the Texas attorney general's office where a spokesman declined to comment.

Gtech, the world's largest lottery company with more than $1 billion in revenues last year, designs and operates the Texas Lottery.

It earns a small percentage of all lottery sales.

Scientific Games prints the scratch-off cards.

Lawyers for these two firms also declined comment.

The lawsuit charges a "civil conspiracy" exists among the TLC, Gtech and Scientific Games because all three have an interest in selling as many scratch-off tickets as possible.

"The scheme between the Defendants and the TLC produced a deliberately organized process wherein scratch-off tickets were sold ... with no chance of being able to win the top prize for a particular game," reads the suit.

It originally was filed last year in Nueces County but was refiled this week to incorporate the conspiracy claim after other legal theories Clark had advanced were shot down.

In their responses to the original suit, both Gtech and Scientific Games denied any responsibility or role in the scratch-off game issues, saying any consumer beef lies with the lottery commission.

Clark estimated up to $100 million worth of scratch-off tickets per year may have been sold whose top prizes already had been claimed.

He said the lottery commission and Gtech became concerned about liability several years ago, and after an "emergency meeting" decided to add the disclaimer.

But, he said, the advisory is meaningless because consumers can't read it until they buy the ticket, and the ticket can't be returned.

Bobby Heith, a TLC spokesman, said the disclaimer was placed on the scratch-off cards in 2002.

He said players can readily figure out which games have top prizes available.

"The Web site is updated weekly, the fliers go out every two weeks, and they can call the 1-800 number," he said.

"I think the staff feels we are doing all we can to put out all the information we can regarding the instant tickets," he said.

But Heith also said the TLC, which communicates regularly with all lottery retailers through computer links, could notify them after the last top prize in any contest has been claimed, but does not do it.

"Technically, that option is available, but as a policy perspective, it might get into a contract issue, pulling the tickets after the top prizes are awarded," he said.

Any such decision would have to be made by the lottery commission, he said.

Clark's suit asks that the TLC be forced to "remedy the defect" in its scratch-off games, and also seeks unspecified compensatory and punitive damages.

However, not everyone who is familiar with the games thinks scratch-off customers are being cheated.

Fernando Cabello, an assistant manager at Lucky's, which last year sold $1.1 million in scratch-off cards as the top San Antonio outlet, said most players are well aware when the top prizes are gone.

"I've got people who come in here with printouts of what prizes are left. There's nothing dishonest about it. You're taking a chance. You inform yourself," he said.

But another manager at Lucky's said most players are clueless.

"Some know it and some don't. Some are keeping up with the figures, but the majority are not," said the manager, who asked not to be named.

Special Note From Dawn Nettles - Publisher of LottoReport.com

Many of you have been asking if we couldn't file a class action lawsuit against the TLC and it's employees. Well, I'm about ready to seriously check into this as the District Attorney of Travis County has just recently notified me that the DA has no jurisdiction in the matter of not considering comment for rule changes. We did however discuss another avenue to which the DA may have jurisdiction and I will submit that complaint in coming days. In the meantime, for those of you who wish to participate in a class action lawsuit should I find that avenue to be advantageous to us, then send me an email with your name and address and I'll notify you when and if the time comes. Here is an email link

The Lotto Report
Dawn Nettles
P. O. Box 495033
Garland, Texas 75049-5033
(972) 686-0660
(972) 681-1048 Fax

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