Suit alleges Jordan's, Alpha Omega promos were lotteries

Joseph Frate was convicted in the 1980s of running an illegal lottery game. Now he is using the knowledge gained from that painful experience to sue two local retailers he says are breaking the law.

Frate, who lives in Medford, has filed civil lawsuits in Middlesex Superior Court against Jordan's Furniture and Alpha Omega Jewelers Inc., alleging both companies ran Red Sox promotions that qualify as illegal lotteries.

Under an unusual state law that allows third parties to recover money wagered on illegal gambling activities, Frate is asking for damages equal to three times what consumers spent on the Jordan's and Alpha Omega promotions. The retailers haven't said how much was spent on their promotions, but both have indicated they were extremely popular.

"These are blatantly lotteries," Frate said. "I learned the hard way. We're going to find out if there's a double standard."

Jordan's Furniture, a division of Berkshire Hathaway Inc., and Alpha Omega, which has stores in Boston, Burlington, Cambridge, and Natick, declined comment on the lawsuits and have not formally responded to the suit. Previously, officials at both companies denied the promotions were illegal lotteries.

In late April, I reported that several lawyers specializing in retail law believed the promotions being run by Jordan's Furniture, Alpha Omega, and others met the definition of an illegal lottery. But a spokeswoman for state Attorney General Martha Coakley said her office wasn't taking action because the law on lotteries was murky and consumers weren't being harmed.

Coakley's spokeswoman, Amie Breton, said last week that the attorney general's position has not changed. "We continue to monitor the situation and, if it seems consumers are being harmed in any way, we will reevaluate."

A lottery is an illegal gambling activity in Massachusetts and most other states, except when it is being run by a state. Lotteries include three key elements -- a prize, an element of chance, and consideration, usually the payment of money. Since retailers find lottery-style promotions are good for sales, many use them, but avoid legal concerns by dropping one of the three elements. For example, the element of chance can be eliminated by creating a game where skill predominates, like shooting baskets or writing an essay. Consideration can be eliminated by allowing people to play without paying, which is why many companies add the tagline, "no purchase necessary," at the end of their promotions.

Jordan's Furniture promised customers who purchased certain types of furniture between March and April a full rebate if the Red Sox were to win the World Series this year. The lawyers contacted by the Globe saw the furniture purchase as the consideration, the full refund as the prize, and the Red Sox World Series win as the element of chance.

The Alpha Omega promotion was slightly different. It promised discounts or full refunds to consumers who bought an engagement ring on a day when one of three things happened at a Red Sox game. The customer would receive $500 back if a Red Sox player hit a home run, $1,000 if a player hit a grand slam, and a full refund if the Red Sox pitcher threw a no-hitter.

Frate's attorney, Lisa Siegel Belanger, argues in her complaints that her client is entitled to damages equal to three times what consumers spent on the promotions because of a state law whose "main objective was to penalize individuals and businesses who promote a lottery without the authorization of the Commonwealth."

Frate was convicted in 1987 of operating an illegal lottery and possessing gambling devices, which he installed at several locations. The device was described in court documents as resembling a "slot machine. A player would insert a coin, lights would flash, and numbers would be electronically generated. Sometimes coins would be disgorged as prizes." Players could use the numbers to play the real state lottery.

Frate was sentenced to two years of probation and a $300 fine. He said the decision was financially crippling. "It nixed my future. A conviction shows up on your record no matter what you do."

The case was appealed in 1989 to the state Supreme Judicial Court, which upheld Frate's conviction on operating an illegal lottery, but overturned his conviction on possession of a gambling device. The court said the vending machine didn't qualify as a gambling device because it didn't include a "reel or a drum."

Frate said he decided to file his lawsuit after seeing Jordan's Furniture and Alpha Omega advertisements for the promotions and reading in the Globe that law-enforcement officials weren't going to do anything. "If I couldn't do it, why should they look the other way with these people?"

Bruce Mohl can be reached at mohl@globe.com.