Even then I have not heard form anyone here if they had won a lottery. Few of my friends also play at freebitco and they also did not win any big prize. I wonder if this lottery system is fair ?

Recap how many people you know who have won in the standard lottery of your state? I am quite sure it's "none", would you call the States lottery unfair, too? Regarding the freebitco.in lottery: There are millions of players all over the world, chances that you know someone who has won in the lottery personally are extremly low, just do the math.
Not just states, that is USA, let me ask this; how many people in freebitcoin (used globally) have ever met a lottery winner? You can literally live anywhere in the world and respond to this question, unfortunately lottery is not something people win that easily, it is won by 1 out of millions of tickets and that means the odds are so little that there is a big chance you will never met with a winner ever.
It is just as regular as regular fiat lottery that we have in the world for YEARS now, there is literally a lottery every week in my nation as a nation wide thing and I have never met with any of the winners or ever seen a winner. I have seen some news of lottery winners spending all of their money and becoming poorer than before in the newspapers couple of times but that's it, never face to face.