A major scandal has erupted in Ontario in recent weeks following reports that some lottery retailers have for years been cheating their customers out of winning tickets, instead cashing in the tickets themselves. Now the law firm of McPhadden, Samac, Merner & Barry has filed a would-be class action lawsuit on behalf of all persons who bought lottery tickets since 1975, charging that the lottery failed to exercise its responsibility to prevent cheating, and demanding C$1.1 billion including C$100 million in punitive damages.
Perhaps the most interesting question raised by the legal action is: assuming a remedy cannot be had against the rogue retailers, what is a suitable remedy against the allegedly negligent lottery authorities? According to CTV, the law firm has proposed to hold a “free lottery”, or, perhaps more precisely, a lottery that would compensate for past unfairness by enabling Ontarians to buy a ticket which would be eligible for a payoff above the usual. (Those who could prove they had played the lottery in the past would be entitled to one free ticket.) (“Class-action suit launched against lotto agency”, Mar. 28).
Details of the proposed “remedial” lottery are hazy in the CTV account, but a couple of practical difficulties immediately come to mind. Start with the assumption that a “remedial” pot would be fixed at a certain lump sum intended to punish the province for its past negligence — let’s say C$100 million — and that such a sum greatly exceeds a typical lottery pot. Since there is no upper limit to the number of tickets that purchasers could buy in pursuit of the extra-large pot, the province might in fact wind up making money on its penitential lottery, even taking into account the obligation to dispense a certain number of free single tickets to persons who could bring in the paperwork to show they were past lottery players. Alternatively, assume that the province undertakes to run a one-time penitential lottery with a higher payout than usual — say, 95 percent rather than the usual 40 or 60 percent or whatever. Again it’s possible that by stoking player interest in a much-publicized “good-odds” lottery, the authorities will come out ahead (perhaps having hooked many novices into buying their first lottery tickets).
The practical difficulties if the province is so rash as to promise a lottery with a payout of, say, 110 percent of the money put in, will be left as an exercise to the reader.