A new case that could have massive consequences for the future of video lottery terminals in Canada is going ahead.

The suit alleges that video lottery terminals that Crown owns are deceptive and also are in violation of the Criminal Code in Canada. This class-action?suit is being heard in the Newfoundland and Labrador Court of Appeal, but it could have consequences for the rest of the country.

The Atlantic Lottery Corporation, which oversees operations in the four Atlantic provinces, tried to block the suit but the court dismissed its objections.

Details of this lawsuit

This claim, initially filed in 2012, claims: “VLTs are inherently deceptive, inherently addictive and inherently dangerous when used as intended.” It wasn’t until 2017 that this lawsuit became a class-action suit.

One of the reasons given that these machines should be illegal is that they are not definable as part of the Criminal Code. They do not fall under the definitions for lottery schemes, fair games of chance, or slot machines.

Instead, the plaintiffs claim that the terminals are closer to the gambling card game known as three-card monte. This is the game in which the dealer moves three cards around and the player has to try and track a given card. It is effectively a con game where the dealer uses sleight of hand to manipulate the outcome.

The lawsuit argues that the video lottery terminals use similar tricks via cognitive distortions to change the player’s perception of the chances of winning. This is an acceptable legal argument, according to the appeal court, and is a basis for a class-action lawsuit.

Kirk Baert, lawyer for the plaintiffs, said: “The point of having this provision in the Criminal Code … was to prevent people from being deceived by charlatans and tricksters who use sleight-of-hand to make people lose their money.”

Effectively, the argument goes, a traditional carnival type game is now being done using a machine now. The defendant in the case claims that these games are very well regulated and that only chance governs their outcome.

How might this case turn out?

The appeal court did reject claims from the plaintiffs that these terminals violate the federal Competition Act, as well as the Status of Anne, which is a long-standing British law that aims to stop deceitful gaming practices.

There has been no indication given as to whether the defendant will appeal this decision through the Supreme Court. The class-action lawsuit includes more than 30,000 people in Newfoundland and Labrador who have been gambling through these machines since 2006.

They want to obtain damages that are equivalent to the supposed unlawful gain that the Atlantic Lottery Corporation has been making during this period. In addition to the damages, the plaintiffs also want an injunction that would stop the use of these terminals. They are claiming that the video lottery terminals are not a permitted lottery as per federal law.

The knock-on effect of these claims is that other such claims will be seen all across the rest of Canada. This would be a massive blow for the provinces and operators alike, as significant revenue comes for these terminals each year. A lot of establishments, particularly racetracks rely on these funds to stay in operation throughout the year.

However, there are some worrying figures for the defendants. A third-party study shows that the maximum prize of $500 (￡293.5) on these terminals in Newfoundland and Labrador comes with odds of 270,000 to 1. Therefore, if you were playing these terminals in the long run, you would on average lose almost $30,000 (￡17,601) before winning the $500 jackpot.

This is certainly not very indicative of a game of fair chance, and the authorities across Canada will be sitting up and watching this with close attention. It could be necessary for the operators of these terminals to make the odds more favorable to the player, or the suit may bring about a blanket ban.