Democratic and Republican senators and legislators have called for an investigation into how the Illinois Lottery worked in regard to major prizes not being awarded for instant win games after a Chicago Tribune report that came out online Friday and in the newspaper Sunday.

Northstar Lottery Group, majority owned by world lottery heavyweight IGT in association with Scientific Games Corp is being questioned about instant win games that didn’t deliver the promised return to player percentages (RTP) due to the games being pulled before enough tickets were sold to award major prizes.

Although the odds of winning on any ticket were the same for the first, last, and any unsold tickets – one game, The Good Life, should have seen 78 percent of revenue returned to players in prize money. The game was pulled after only about 15 percent of tickets had been sold. At that time, due to no major prize winners, the return was only a little over 60 percent.

Some $38 million in smaller prizes had been awarded when the game was pulled, but two behemoth jackpots stayed unsold or at least unclaimed. For the price of a $30 ticket, two random players were promised a chance to win $30,000 per year for 30 years, or $46 million each. Those prizes were never awarded.

An analogy that may help differentiate between “odds” and “RTP” and whether the practice was fair, is to imagine playing a slots game with a progressive jackpot that must trigger by a certain dollar amount. In that scenario, a small percentage of every bet goes to feed the progressive jackpot. The base game may return as low as 85% to players in smaller prizes, while the massive multi-million dollar progressive being awarded might bring the overall RTP up to 95%. If that game were pulled before the progressive jackpot was won, players who had contributed to the rising big prize may feel they didn’t get their money’s worth.

In the case of The Good Life, “approximate odds” were met, according to a statement attributed to IGT by the Tribune.

Another game, Birthday Surprise, also claimed two large grand prize awards were available to be won, and they were, as long as the tickets were on sale, but that game ended before all winning tickets were purchased.

According to the report, the Tribune found that more than 40 percent of grand prizes, 23 jackpots in total, were not awarded in Illinois – a much higher incidence than other state lotteries have reported.

Northstar Lottery Group became the first private firm in the United States to run a state lottery, rather than the state itself, when Illinois granted a contract to the long time rivals, working together as Northstar in 2011. The consortium failed to deliver promised profit margins to the state. Although unrelated to Northstar, in August 2015 we reported that a state budget impasse was keeping any lottery jackpots from being paid out – that situation continued until a December 2015 bill authorized $1 billion to fund the lottery. September 2015 saw reports that an agreement had been reached to end Northstar’s contract with the state due to not meeting profit projections. In July 2016, it was reported that Illinois was seeking a new private firm to manage the state’s lottery.

At least one powerful lawmaker is concerned about the lasting impressions left with players. The Tribute quoted Senate President John Cullerton as saying, “If the players are not treated fairly, then they’ll stop buying it, and then we’ll lose money,” said Cullerton.

The Tribune reportedly studied thousands of pages of data and determined among other things that Northstar printed more than three times the number of tickets for one of the games than the state normally would have for similar games, and that ticket buyers lost interest in the games before the biggest prizes were awarded – prompting Northstar to pull the games from retailer’s shelves.

Only one of the two Grand Prizes for Birthday Surprise was awarded before the game was pulled and then reintroduced with virtually the same framework of prizes and number of tickets printed. In the first instance of the game, only 64 percent of tickets were sold. According to the Tribune report, only 49 percent of the second game’s tickets had been sold when it too was retired after only 10 months.

IGT and Scientific Games defended their positions in statements to the Tribune and pointed to an increase in overall player wins since Northstar took the helm with the news outlet confirming an average increase in payouts of $340 million per year – on increased sales of an extra $490 million per year.

In the days before online casino regulators of any merit, such as the United Kingdom Gambling Commission, several operators tried to pull progressive jackpot games without compensating players who had contributed to the jackpots. Most often the player community would go up in arms and call for blacklisting the operator or software supplier, who usually held the funds in a sort of escrow.

The common solution, when the operator was responsive or when the game was pulled with advance notice by a reputable game supplier, was to roll the unclaimed funds into another game by seeding the jackpot higher than normal. It’s unclear whether a similar solution may be possible in Illinois by increasing the odds on  ‘reintroduced’ lottery games even if it pushed the odds over 100% for players. History has shown that major lottery companies don’t feel the need to answer to players, so ticket buyers who feel slighted for investing in a game with a promised grand prize that was never delivered will need to rely on Illinois lawmakers whose revenues may depend on the games always appearing as fair and winnable in order to assure future ticket sales.

Illinois lawmakers seek investigation into lottery practices; Grand Prizes not awarded was last modified: December 18th, 2016 by Lars Jones