What Are The Odds?Jun 12, 2008
What are the odds the Virginia Lottery has not been square its fellow Virginians on the actual odds of winning its scratch-off games? Scott Hoover, a Washington & Lee University business statistics professor, says at least even money. Hoover is suing the state gambling agency for refunds of $84.7 million for continuing to sell "scratcher" instant lottery tickets even when the top prize tickets get sold out (click here for an AP report on his suit). By law, The Lottery Department must publish the odds of winning for all of its games. Unlike the lotto games, where on the number of people who can select the winning numbers, the scratcher games are printed with a finite number of winners per batch. When a grand prize is won, those odds get steeper, yet the original published odds stay the same.
Hoover gives the "Beginner's Luck" scratcher game from last summer as an example. It had six grand prizes of $75,000. But when the last grand prize was sold on July 24, it continued to sell the tickets — 241,000 of them to be exact. Hoover knows this from his own investigation — he tracked the payouts from the game on the Lottery Department's Web site and received information from the department via a Freedom of Information Act request. In essence, the Lottery Department was sanctioning, according to Hoover, the selling of tickets in which the already infinitesimal odds of winning were reduced to absolute impossible because there were no more grand prizes left! In other words, a shell game!
The galling thing is, if all true, is that the Lottery orders new batches of the scratchers with the same original odds when the grand prizes are claimed. But instead of scrapping the remaining tickets and substituting the new batch, it continues to sell the old tickets to suck money out of unsuspecting and hopeful participants while the potential winning tickets are sitting in boxes!
This isn't like the two clowns on the classic television series Gunsmoke who couldn't figure their way out of a paper bag. By Hoover's analysis, the Lottery Department sold 36.8 million tickets after the grand prizes were gone in more than 47 scratch-off games since 2003. In his suit, Hoover asks not only for the refunded money, but that the Lottery Department be barred from selling "defective" tickets in the future.
If the professor is correct about all this, it will have implications beyond this particular form of state-sponsored gambling. There are many in the General Assembly who are hoping the impasse over tax increases for transportation and the thirst for more money will lead to their solution: The expansion of state-sponsored gambling in the form of "historical" horse racing — basically, video slots for horse racing.
We don't know what their odds of success will be. But the way the Lottery has been apparently fooling us all these years, don't think defeating it will be a sure bet.