Does the Georgia Lottery Have to Pay for a Winning Ticket? The Lottery Says “No,” but the Courts Say “Yes.”

Brent W. Herrin

Welcome to 2020.  This year we will try to regularly update this section of our website with short articles about recent cases or developments in the law.  Check back often for updates. 

Years ago, my family began a tradition of giving a couple of scratch-off lottery tickets as Christmas stocking stuffers.  I have often wondered what would happen if we won a big prize on a ticket.  While none of us won any big prizes last week at Christmas, I thought I would start this year’s legal update blog with two recent cases involving the Georgia Lottery Corporation’s refusal to pay on winning lottery tickets.

The first case (which has resulted in three Georgia Court of Appeals cases – Ga. Lottery Corp. v. Patel, 349 Ga. App. 529 (2019) (Patel I); Patel v. Ga. Lottery Corp., 350 Ga. App. 883 (2019) (Patel II); and Ga. Lottery Corp. v. Patel, 2019 WL 6242104 (Nov. 22, 2019) (Patel III)) the Georgia Lottery Corporation refused to pay the winner of a $5 million scratch-off ticket claiming the ticket was not a written contract.  The ticket was purchased by a daughter and given to her mother as a birthday gift.  After the Lottery refused to pay the mother, the mother sued for breach of contract and for an injunction under the Georgia Uniform Deceptive Trade Practices Act barring the Lottery from selling any further tickets unless it warns consumers that lottery tickets are not written contracts.

In the second case (Ga. Lottery Corp. v. Vasaya, 2019 WL 5616681 (Oct. 31, 2019)), the ticket purchaser sued after the Lottery refused to pay the prize on a “$7,500 a Week for Life” scratch-off lottery ticket.

In both cases, the Lottery claimed it was immune from lawsuits based upon the defense of sovereign immunity.  The defense of sovereign immunity provides that unless waived, the state (and any of its subdivision (including the Lottery)) may not be sued.  A majority of the panel of judges from the Court of Appeals in Patel I, Patel II, and Vasaya ruled that the Lottery’s claims of sovereign immunity failed because lottery tickets are written contracts and that Georgia has waived sovereign immunity for contract claims.  However, the dissent argues that lottery tickets are not written contracts and therefore the Lottery is immune from lawsuits.  In Patel III, the Court of Appeals in a unanimous decision ruled the Lottery is immune from claims under the Georgia Uniform Deceptive Trade Practices Act.  While Patel I, Patel II, and Vasaya are not binding authority because the decisions were not unanimous, their logic should be persuasive in future cases.

These cases are cautionary tales of what can happen when the Lottery refuses to pay on a claim.  If you have a winning lottery ticket of significant value, you may want to seek legal advice before making your claim.

Brent W. Herrin is the managing partner of Small Herrin, LLP.  Brent focuses his practice on Family Wealth Planning and Tax, Litigation, and Higher Education and Accreditation.

Copyright © 2020, Small Herrin, LLP and Brent W. Herrin.  This article does not constitute tax, legal or other advice from Small Herrin, LLP, Brent W. Herrin, LLC, or Brent W. Herrin, which assume no responsibility with respect to assessing or advising the reader as to tax, legal or other consequences arising from the reader’s specific situation.  This posting includes general information about legal issues and developments in the law.  Such posting is for informational purposes only and may not reflect the most current legal developments.  The reader should contact a lawyer licensed in their jurisdiction for advice on specific legal issues and should not act upon the information contained in this posting without first consulting an attorney licensed in the appropriate jurisdiction.  The views set forth herein are the personal views of the author and do not necessarily reflect those of Small Herrin, LLP.  To the extent this blog post may be considered attorney advertising, the following statement is required by Rule 7.2 of the Alabama Rules of Professional Conduct: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers."