(Photo Image courtesy of The Illinois State Lottery)

The management company that runs the Illinois State Lottery has been defrauding both lottery players and lottery ticket sellers by abruptly canceling games before winning tickets were purchased, according to a lawsuit filed Feb. 6 in St. Clair County’s 20^th Judicial Circuit Court.

The law suit alleges Chicago-based Northstar Lottery Group, the private management company retained by the State of Illinois to administer the lottery program, has a record of discontinuing special, limited-time scratch-off ticket games with virtually no notice after substantial sales levels had been achieved but before tickets for the largest payouts were sold.

The practice deprived ticket purchaser of large promised jackpots and also effectively misrepresented the true chances of winning cash lottery prizes — particularly the largest ones, the suit alleges.

It also deprived lottery ticket sellers of potential cash awards, the lawsuit continues.  Under their agreement with the Illinois Lottery, ticket sellers receive a small commission on each ticket sold but also receive a bonus when they sell the winning tickets for major prizes; generally based on a percentage of the winning ticket’s payout.

An investigation by the Chicago Tribune in December 2016, found that under Northstar’s management, the Illinois Lottery collected hundreds of millions of dollars from selling tickets to instant games in which it did not hand out all the grand prizes and sometimes awarded no grand prizes before a game ended.

The newspaper found over the period 2011-15, the lottery did not award 23 grand prizes, or more than 40 percent, of those offered by its 17 “scratchers” or “instant” games.

While lotteries across the country sometimes do not hand out all grand prizes in every game, Illinois’ award rate was significantly lower than any state the newspaper studied.

The Tribune also found that, because instant games have often ended ahead of schedule, the Illinois Lottery has often paid out a lower percentage of game revenue as prizes than anticipated.

Again, the newspaper found that Illinois’ total lottery payout rates were lower than in other states.

Northstar is compensated in part based on the lottery’s net income; meaning the firm has a motivation to maximize lottery profits, the lawsuit notes.

Gov. George Rauner officially terminated the Northstar Group as the lottery administrator in 2015.

However, under the terms of its contract with the state, Northstar is continuing to run the lottery until state officials can retain a new management firm.

Although the lawsuit does not seek specific damages, it raises the prospect of an award potentially totaling millions of dollars for thousands for lottery ticket purchaser across Illinois and adjoining states, as well a hundred of ticket sellers across Illinois.

The trio of Metro-East law firms that file the suit last week as seeking class action status; meaning virtually all purchaser of tickets for scratch-off ticket games from 2011 to present could file for damages, as could all ticket sellers.

Listed as the initial plaintiffs in the suit are:  Raqqa Inc., which owns the Fairview Lounge in Fairview Heights and John Bean, of unincorporated St. Clair County, as well as Michael Cairo and Jason Van Lente, who are both identified as residents of Cook County.

Filing the suit on behalf of the plaintiff were the law firm of Sprague & Urban of Belleville, TorHoerman Law of Edwardsville, and Brandt Law of Edwardsville.

Neither Illinois Lottery officials nor Northstar representatives have issued comment on the lawsuit.

However, legal observers note the case has the potential become one of the largest and most high-profile cases ever in Metro-East; where courts have long had a reputation for large cash awards in class action lawsuits.

The State of Illinois is not named as a defendant in the lawsuit.

North Lottery Group is described on its company website as “a fully integrated consortium of best-in-class companies that have come together to serve the State of Illinois as its Private Lottery Manager. Northstar includes IGT Solutions Corporation, “the world’s leading providers of operations management, technology solutions and innovative lottery products,” the website continues.

Illinois officials began looking seriously into Northstar’s operations in June 2013 when company officials informed them they were cancelling the lottery’s new and highly popular “Birthday Surprise” game after selling two-thirds of tickets but having not yet awarded either of the game’s promised two grand prizes.

— St. Clair Co. class action suit charges fraud in Illinois Lottery —