Beginner's Luck: Potential Fraud by the Virginia Lottery
The Virginia Lottery offered scratcher games for which consumers could instantly win an array of prizes. In the summer of 2007, finance professor Scott Hoover determined that the lottery's website had provided false information about the number of prizes outstanding for some scratcher games. After a ten-month investigation, Hoover and a team of attorneys had gathered evidence to support a specific allegation of fraud. The lottery was selling scratcher tickets for which no grand prizes were possible, yet, its website posted information indicating that grand prizes were, in fact, still outstanding. Hoover and his attorneys worked behind the scenes to seek reform and remedies from the lottery, but those efforts were unsuccessful. He wonders whether he should go public with his allegations and file a lawsuit against the lottery. Several important ethics-related questions are posed. Does Hoover have a moral obligation to inform consumers of the apparent fraud? Should Hoover demand a return of the lottery's alleged illegal gains when those gains have purportedly benefited Virginia's educational system? Are there other approaches that do not involve Hoover going public that might motivate the lottery officials to correct the information?