In one of my favorite movies, “The Flim-Flam Man,” actor George C. Scott plays a swindler who justifies his stealing by blaming the greed of victims who gambled and lost to his tricks.
“You can’t cheat an honest man,” his character, Mordecai Jones, instructs a protégé. But as the plot unfolds, not everybody who gets hurt deserves it. And honesty wins out. Mostly.
A vaguely similar morality play is slowly unfolding for real in federal court in East St. Louis. The accused flim-flam artist is the private contractor that since 2011 has operated the Illinois State Lottery.
The company, Northstar Lottery Group, isn’t blaming the victims. It insists there aren’t any. As in many lawsuits, the defendant is battling to keep allegations from ever coming before a jury.
A ruling this week by Chief District Judge Michael Reagan in a complicated clash over jurisdiction may slow the pace, although trial in his court is not set until late 2018.
The lottery is a variation of the illicit “numbers racket” run by gangsters. People placed bets on which three-digit number, unknowable in advance, would come up. The winning number would be based on something like a newspaper report of the total money wagered that day at a particular race track.
Eventually, states stepped into the mob’s role to operate legal lotteries. Illinois started in 1974.
In big lotto games, players pick their own numbers and the pot grows, based on ticket sales, until somebody wins.
The class-action suit at issue is about myriad instant games, created to generate more sales using lower prizes but better odds. The lottery prints a finite number of scratch-off tickets, with a fixed number of winners randomly mixed in.
According to the suit, each ticket carries a warning that you may be buying it after the big prizes already have been claimed. But there is no warning that the game might be abruptly ended before all — or even any — of the top-prize-winning tickets have been sold.
That’s what Northstar kept doing, to enrich itself by increasing the state’s profit, the suit claims. Court documents say Northstar got up to 30 percent of the net income — tickets bought minus winner payouts and costs.
Still, in 2015, Gov. Bruce Rauner fired Northstar — effective at the start of 2017 — for failing to meet revenue targets. But the firm continues to operate the lottery under a contract extension.
Northstar would cut off ticket sales after “profitability of the game was statistically maximized,” according to the suit, which followed a Chicago Tribune investigation of low payouts. A similar class-action suit is pending in Chicago.
Among examples cited in the downstate case was the 2010 “Birthday Surprise” game, which offered two top prizes of just over $3 million. One-third of the $5 tickets, apparently including one of the two big winners, were not yet sold when the game was halted.
Northstar started a virtually identical game 10 weeks later, then shut it down with fewer than half the tickets sold and no grand prize winners, the suit says.
It claims that in the six years before Northstar, the Illinois lottery paid out 87.5 percent of prizes offered, in line with other states, but that under private control the number dropped to 59.6 percent.
The suit was filed Feb. 6 in St. Clair County Circuit Court by Raqqa Inc., owner of the Fairview Lounge, in Fairview Heights, which sells lottery tickets, and three regular lottery buyers, including John Bean, of St. Clair County.
Raqqa complains it was deprived of an opportunity to collect a bonus on winning tickets it never has a chance to sell. The buyers allege that they were cheated out of a chance to win. The suit seeks in excess of $50,000 on each of seven counts.
Northstar, which has not yet laid out a full defense, had the case moved to federal court because it involves parties in different states (Northstar is rooted in Rhode Island, Delaware and Georgia).
Now, Northstar is seeking a dismissal of the case, claiming a “fatal flaw” that Raqqa and the individuals cannot meet the legal requirement of proving they were actually harmed. The plaintiffs, meanwhile, are asking to have the suit returned to state court.
Each side wants its motion heard first, perhaps in belief that dismissal of the federal case would harm the plaintiffs’ chances in St. Clair County too.
Reagan decided that the issues are too inter-connected to consider separately, and on Monday ordered lawyers to prepare briefs on both.
If the allegations are true, it sure feels as if the games were unfair. But can you win a lawsuit on a claim of being deprived of a chance to win something that was a long shot to begin with?
Going to court may be as much of a gamble as buying a lottery ticket.