Video lottery terminal suit bound to fail, court rules

OTTAWA — A class-action lawsuit aimed at video lottery terminals cannot proceed because it is bound to fail, the Supreme Court of Canada ruled Friday.

The high court overturned a Newfoundland and Labrador Court of Appeal decision that had cleared the way for the class action, which alleged the Atlantic Lottery Corp.’s VLT games are inherently deceptive, addictive and illegal. The action included as many as 30,000 people in Newfoundland and Labrador who paid the corporation to gamble on VLT games from 2006 to 2012, when the claim was filed.

The lead plaintiffs, retirees Douglas Babstock and Fred Small, were seeking damages equal to the alleged unlawful gain obtained by the lottery corporation through VLT revenue.

The corporation said the plaintiffs could not possibly show the VLT games fall within the Criminal Code’s prohibition against three-card monte — a game in which a player tries to follow one of three cards through a series of manipulations, then bets on his or her ability to locate the card.

Plaintiffs pursuing a class action must first go through the certification stage and demonstrate that the pleadings reveal a valid cause of action. Once a class action is certified, it can proceed to trial. In its decision, the Supreme Court set aside the certification order in the VLT action and struck out the statement of claim in its entirety.

Atlantic Lottery Corp. said it was satisfied with the outcome, adding it “provides its players with a responsible and regulated video lottery program.”

Kirk Baert, a lawyer for Babstock and Small, said the decision means “the issue of the alleged deceptive practices of the Atlantic Lottery Corp. will not be further explored. That is unfortunate.”