FTC complaint filed against NY Lottery for deceptive advertising

May 13, 5:38 PMNY Libertarian ExaminerJim Lesczynski

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Take Five advertising: a little luck or a little lie?

“With odds of winning of one in nine, all you need is a little bit of luck,” claims the nebbish spokesman for the New York Lottery’s Take 5 game. But a closer look shows that the true odds of winning any money are far higher than the advertisements claim. In an effort to put a stop to these deceptive ads, on Wednesday I filed a formal complaint with the Federal Trade Commission against the NY Division of Lottery.

When consumers are told that the odds of winning the Take Five game are 1 in 9, it would be reasonable for them to assume that those are the odds of winning a cash prize. However, the 1 in 9 odds are based on the free game ticket awarded for picking two out of the five game numbers correctly, according to the NY Lottery website. The odds of winning the lowest cash prize – for picking three out of five numbers correctly – are 1 in 109. The odds of picking all five numbers correctly and winning the top cash prize are 1 in 575,757.

As if the exaggerated odds weren’t bad enough, the state’s takeout from the prize pool is excessive even by lottery standards. The expected prize amount for selecting all five number is only $57,575.70, or 10% of the odds of the true odds. (By comparison, Las Vegas and Internet casino games typically pay out at over 90% of true odds.)

A lottery player on Staten Island, identified in court filings as M. McKee, filed a class action lawsuit in federal court against the New York Lottery in May 2008. The suit alleged that consumers were spending millions of dollars purchasing Take Five tickets under false pretenses because the state agency exaggerates the odds of winning. However, that suit was withdrawn by the plaintiff two months later.

The FTC enters all complaints it receives into Consumer Sentinel, a secure online database that is used by thousands of civil and criminal law enforcement authorities worldwide. The more complaints that the FTC receives, the more likely it is that action will eventually be taken against the New York Lottery. Readers can quickly file their own complaint against the New York Lottery by using the FTC’s online Complaint Assistant.