But the ruling only covers a 14-month period and otherwise upholds the province's so-called voluntary self-exclusion program, meaning gambling addicts who ask to be barred from casinos for their own good will still be forced to turn over their winnings.
The lottery corporation started its voluntary self-exclusion program in the late 1990s. In April 2009, the corporation introduced a policy that prohibited people in the program from collecting jackpots — a rule that typically comes into effect for prizes of $10,000 or more.
Hamidreza Haghdust and Michael Lee, who have each enrolled in the program at various times, filed a class-action lawsuit asking that the entire scheme be thrown out.
Haghdust was denied two jackpots together worth $35,000, while Michael Lee was denied one jackpot worth $42,500.
A judgment released on Thursday said the lottery corporation didn't have the power to withhold jackpots when it introduced the policy in April 2009.
On June 3, 2010, the provincial legislature made changes to the Gaming Control Act that cleared the way for the jackpot rule. Consequently, the judge said the lottery corporation has been allowed to withhold jackpots since then, and anyone who lost their winnings in the past four years won't be getting that money.
"Certainly, rewarding people who violate their (voluntary self-exclusion program) commitments with jackpots is anathema to any public policy concerns about dissuading gambling by those people in the first instance," wrote Judge John Savage.
The lottery corporation issued a statement Thursday that said it would pay out jackpots that were withheld between April 2009 and June 2010 worth about $450,000.
"The jackpot disentitlement rule is intended as a deterrent for those who have voluntarily self-excluded," the statement said.
"External reviews of BCLC's voluntary self-exclusion program, as well as feedback from program participants themselves, have highlighted the need for disincentives such as these."
The plaintiffs asked for the policy of withholding jackpots to be thrown out entirely. Their lawyer, Paul Bennett, said he was still considering whether to appeal the judge's conclusion that the program has been valid since June 2010.
Haghdust will now be eligible to collect the $15,000 jackpot he won before June 2010 but not a jackpot of about $20,000 he won on June 15, 2010 — less than two weeks after the cutoff set by this week's court ruling. Lee won his $42,500 jackpot in January 2010, meaning he will be able to recover that money.
Critics of the self-exclusion program have complained that the B.C. Lottery Corp. and other provincial gambling regulators with similar programs don't do enough to prevent banned gamblers from entering casinos. They argue that because jackpots are withheld, the program is only enforced when gamblers are winning, not when they're losing.
Earlier this year, a B.C. Supreme Court judge rejected another lawsuit related to the self-exclusion program.
Joyce May Ross sued the lottery corporation for $78,000, which is the amount she gambled away over a three year period while enrolled in the self-exclusion program.
The judge dismissed the case after concluding Ross was "the author of her own misfortune."
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