Canadian Gaming Association Joins ‘Three-Card Monte’ Case Against Atlantic Lottery Corp

Canada’s Supreme Court has permitted the Canadian Gaming Association (CGA) to intervene in a longstanding class-action lawsuit that seeks to ban the Atlantic Lottery Corp’s video lottery terminals (VLTs).

The lawsuit, originally filed in 2012, compares the machines to the perennial con game Three-card Monte, while invoking an archaic colonial claw-back law that could put the lottery on the hook for hundreds of millions, or more.

“VLTs are inherently deceptive, inherently addictive, and inherently dangerous when used as intended,” claim the plaintiffs.

In 2017, the Newfoundland and Labrador Provincial Court cleared the way for a class action, a decision that was challenged by ALC, but ratified by an appellate court later that year.

Last December, the Supreme Court agreed to hear the case, which argues that VLTs are illegal because they violate the prohibition on Three-card Monte in the Criminal Code.

Ancient Games, Ancient Laws

Three-card Monte, or Find the Lady, or the cup/shell and ball game, date back at least to the 15th century, and still exist in tourist hotspots around the world today as a method of parting the unwary with their money.

The point is, while the game appears to be simple, there is really no way to win for the player, thanks to tricksters’ sleight of hand. The plaintiffs argue that this is also the case with the Lottery’s VLTs.

They cite a third-party study that claims the odds of winning the $500 maximum prize from a VLT in Newfoundland and Labrador are around 270,000 to 1. That means a player could mathematically expect to lose $30,000 before hitting the jackpot — odds astronomically inferior to even the stingiest of casino slot machines.

Joining the class action are around 30,000 people in Newfoundland and Labrador (around 5.7 percent of the population) who played the Lottery’s VLTs any time after April 2006.

The Statute of Anne is famous for being the world’s first copyright act, but — according to the plaintiffs — it also refers to the Gambling Act of 1710, which was primarily designed to prevent young British aristocrats from wagering away their land and titles, all too common at the time.

The claw-back law has long fallen into abeyance, while the 1710 Gambling Act itself has been completely repealed in Britain. But the plaintiffs are gambling that it still flies in 21st century Canada.

The Supreme Court has made it clear that it will be up to the plaintiffs to explain why this should be the case.

CGA On Board

For its part, the Canadian Gaming Association hopes its “deep expertise in the gaming industry” will craft “a compelling submission to the Supreme Court” in defense of ALC.

“This will be an important appeal for the gaming industry as a whole, and an excellent opportunity to persuade the Supreme Court to implement a clear and balanced approach to this part of the Criminal Code,” said Paul Burns, President and CEO of the Canadian Gaming Association.

Burns is hoping the court will “adopt a principled framework that benefits the industry as a whole.”