Mifal Hapayis lottery sued over 'shrinking prizes'
National lottery alleged to have reduced their payouts by hundreds of millions.
A class-action motion has been filed against Mifal Hapayis, claiming that the national lottery misleads players in respect to the nature of prizes they stand to win.
The class-action motion touches only on people who have belonged to the lottery's subscriber plan. People who happen to buy tickets occasionally aren't part of this action.
How does the lottery mislead its subscribers? They think they are subscribing to a certain level or set of awards, but the actual level is lower, claims the lead plaintiff. For instance, an award dating from 2004 described as being worth NIS 19 million turned into 180 Chevrolet cars that cost Mifal Hapayis NIS 15.5 million, he claims. In another instance, in 2007, a NIS 3 million award allegedly morphed into 600 television sets with 42" screens that cost the lottery NIS 1.8 million.
The conversion of awards into objects in 2006 and 2007 cost players NIS 55 million, the plaintiff estimates.
Altogether, by its gambits from converting awards into objects and other things, the loss to the community of Mifal Hapayis subscribers between the years 2003 to 2009 amounts to NIS 246 million, the plaintiff claims.
Mifal Hapayis began its subscriber program in 1982. Subscribers pay NIS 60 a month and get six fixed numbers that automatically participate in 60 lotteries a year. They also get to take part in special non-cash lotteries giving away holidays and so on.
In 2006 Mifal Hapayis reported netting NIS 700 million. In 2008 its net profit climbed to NIS 800 million and in 2009, to NIS 850 million. Meanwhile, it hasn't increased its payouts, says the plaintiff, who argues that it's been increasing its profit in part by reducing its awards.
Gambling is illegal in Israel. The only body licensed to provide services for those who bet is Mifal Hapayis, through the lotteries. The plaintiff argues that the company is abusing its monopolistic power to increase its profits.
Mifal Hapayis' profits serve not only to pay its management, and to fund public causes such as building schools and community centers.
A spokesperson for the lottery commented that it is studying the lawsuit and will be filing a defense.