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Lawsuit: Lottery players should get refund for rigged games

IOWA CITY, Iowa (AP) ” Hundreds of thousands of lottery players who were allegedly cheated by an insider’s long-running scheme to rig jackpots should be reimbursed for their losing tickets, according to a lawsuit filed Wednesday that seeks class action certification.

Lawyers filed the consumer fraud case against the Multi-State Lottery Association, the Iowa-based nonprofit that helps administer games that are offered by state lotteries. It alleges the association failed to prevent games from being rigged and failed to operate them in accordance with their own rules.

The association’s former security director, Eddie Tipton, is charged with installing software on lotteries’ random number generators that allowed him to predict winning numbers on three days of the year.

Prosecutors say Tipton worked with his brother and a longtime friend to buy winning tickets worth millions between 2005 and 2011 in Colorado, Wisconsin, Iowa, Kansas and Oklahoma. The alleged scheme unraveled after Tipton was caught on surveillance video buying a winning $16 million Hot Lotto ticket in December 2010 that others would unsuccessfully try to cash a year later.

The plaintiff in the lawsuit, 53-year-old insurance salesman Dale Culler of Burlington, Iowa, kept the $45 in tickets that he played in that drawing, along with a detailed ledger of all games he plays.

“While I know the odds aren’t great, I never expected that the games were fixed and my chance was zero,” he said in a statement.

The lawsuit, filed in Iowa district court in Des Moines, argues that Culler should serve as the representative for a class that would consist of all those who bought tickets for games on dates in which winning numbers were made predictable by Tipton’s software. It alleges that hundreds of thousands of lottery players lost money and should be reimbursed plus interest.

Allowing them to join as a class would be more economical than pursuing individual lawsuits because the amount each player lost is relatively small compared to the expense of suing the association, the lawsuit argues. The games known to be at issue include Hot Lotto, Colorado Lotto, Wisconsin Megabucks and Kansas 2X2, but the litigation could uncover others, said one of the plaintiff’s attorneys, Nicholas Mauro.

He said the lawsuit will ask a judge to find the association liable for the rigged games first, and to certify the group as a class later. He said that players who did not keep their tickets should be allowed to join the class by filing a sworn statement of their participation, a form of proof allowed in some jurisdictions.

Investigators say Tipton installed software on the random number generators that worked as intended 362 days of the year, but directed them to produce predictable numbers May 27, Nov. 22 and Dec. 29 if the drawings also occurred on Wednesdays or Saturdays after 8 p.m. Even then, Tipton wouldn’t know the precise winning combinations but that they’d be predictable.

Investigators alleged in a filing last month that Tipton supplied his friend, Texas businessman Robert Rhodes, with several index cards with potential winning combinations written on them and instructed him to play them all for a Wisconsin Megabucks game to be drawn Dec. 29, 2007. After driving around Wisconsin in a rental car buying them at different stores, Rhodes won and split the $783,000 cash jackpot with Tipton, the filing says.

The association has argued that Tipton, who was fired after his arrest, acted alone. Still, the group’s board ousted longtime executive director and founder Chuck Strutt in the wake of the scandal and has also made numerous security improvements.

The lawsuit is the first potential class action to arise from the jackpot-rigging allegations and the second suit overall. The first was filed on behalf of Iowa financial planner “Lucky” Larry Dawson, who won a $9 million jackpot in 2011 but contends it should have been worth $25.5 million had the prior drawing not been rigged. A judge ruled in October that the case can move forward.

Lawsuit: Lottery players should get refund for rigged games IOWA CITY, Iowa (AP) ” Hundreds of thousands of lottery players who were allegedly cheated by an insider’s long-running scheme to rig

Frequently Asked Questions

1. How does the Lottery verify a person claiming a prize is who they say they are? To claim a prize, a person must present valid photo identification. The Lottery also requires a social security number for US citizens. The social security number is used to check the State of Florida owed debt database. The Lottery has recently entered into a pilot program with the Internal Revenue Service which allows the Lottery to check social security numbers with the IRS database. 2. What is the Lottery’s policy on retailer wins? Florida law does not prohibit retailers from purchasing lottery tickets. When the Department of Lottery was first established, Florida Statutes made it unlawful for retailers and their employees to purchase lottery tickets. That provision was amended in 1988, by the Florida Legislature, removing the prohibition. 3. Have you found instances of people cashing in winning tickets worth $600 or more for other people? A winning ticket is considered a “bearer” instrument and the person presenting a winning ticket for payment is the one paid. If, however, changes have been made to the player Information area on the back of a ticket through the use of correction fluid, overwriting, or obliterating a prior entry, an investigation is conducted by the Lottery Division of Security to determine the rightful owner of the ticket. The Division of Security has a forensic lab and document examiner who is able to conduct investigations and inspections of lottery documents critical to making these determinations. 4. What does the Lottery do to track players who have an excessive number of wins? The Lottery has an internal database that tracks multiple winners and looks for irregularities that may exist. This extensive tracking is conducted by the Lottery’s Office of Inspector General and Division of Security. 5. Does the Lottery proactively investigate their retailers, how often, and what would cause a retailer to be investigated? The Lottery makes game security a top priority. The Lottery’s Division of Security and Office of Inspector General has conducted at least three extensive retailer sting operations since 2009. Some were initiated as a result of player complaints and some were random investigations to ensure that retailers are complying with the rules and laws governing the sale of lottery tickets. If wrongdoing is found, the Lottery will cooperate with and support law enforcement and the judicial process. 6. What does the Lottery do to prevent retailers/clerks from stealing customer’s tickets? The Retailer Integrity program is one way the Florida Lottery proactively works to ensure retail clerks are following the law in dealing with our customers. We encourage players to contact the Lottery if they feel a clerk has been deceptive. The Division of Security follows up and investigates every complaint received. In addition, prior to being authorized to sell Lottery tickets, retailers are provided extensive training on how to properly generate and validate tickets. In addition, the Lottery has 7,076 self service validation terminals installed at high volume retailers which prevent theft of customer’s tickets. 7. How do I know Florida Lottery drawings are not rigged? The Lottery is a fair and honest business that is highly scrutinized, audited and observed. The utmost in security and auditing procedures are in operation with each drawing to ensure the highest level of integrity possible. Drawings are conducted under strict security guidelines and procedures to ensure that every player is guaranteed a fair chance to win. Additionally, all Lottery drawings are monitored by an independent auditor and a Lottery draw manager. When a drawing is not taking place, all equipment is under lock and key in a secured location. 8. What are the Lottery’s powers to discontinue sales for a retailer? The Lottery may immediately suspend a retailer without prior notice if the Lottery determines that immediate suspension is necessary to ensure the integrity, security, honesty, or fairness of the operation of the Lottery.

Based upon Chapter 24.112, Florida Statutes, the Lottery has the authority to suspend or terminate a retailer’s contract for reasons not limited to the reasons below:
1. A violation of Chapter 24 or any administrative rule filed by the Lottery;
2. Failure to accurately account for lottery tickets, revenues or prizes as required by the Lottery;
3. Commission of any fraud, deceit or misrepresentation;
4. Insufficient sale of tickets;
5. Conduct prejudicial to public confidence in the Lottery; and
6. Any material change in any matter considered by the Lottery in executing the contract with the retailer.

Additional information can be found in Rule 53ER07-15 Suspension and Termination of Retailer Contract, Florida Administrative Code. The reasons include:
1. Retailer has jeopardized the integrity, security or efficient operation of the Lottery;
2. Retailer has sold a lottery ticket or paid a prize to any person under 18 years of age;
3. Retailer has violated any rule or regulation promulgated by the Lottery;
4. Retailer’s reputation is no longer consistent with the protection of the public interest; and
5. Retailer has violated the Lottery’s ethics rules or policies. 9. What should I use to sign my ticket? The Florida Lottery recommends signing tickets using a pen, but any writing instrument or signature stamp is acceptable. Mailing labels or postage stickers are not acceptable. 10. How should I sign my name on my ticket? Players should sign the back of the ticket in the same way they would sign a check or any other legal document. 11. Do ALL tickets presented to the clerk to be checked/cashed have to be signed? No, but the Lottery recommends that players sign the back of all tickets. Signatures are only required for tickets of $600 or more, which must be claimed at a Florida Lottery district office or Headquarters. When a player signs the ticket, it ensures he/she is the rightful owner of the ticket and is entitled to any prize won on the ticket. 12. Will the retailer give non-winning tickets back to the player? Yes, retailers will offer to give back any non-winning tickets or dispose of them. If the retailer does not offer to give back your non-winning tickets, you may request them. If a retailer refuses, please contact the Florida Lottery’s Division of Security. 13. If players mail their tickets to the lottery to be checked/cashed, do they have to be signed? No, but the Lottery recommends that players sign the back of all tickets before mailing them. By signing the ticket, players ensure they are the rightful owner of the ticket. 14. If a group of players purchase tickets together, do all the members have to sign the tickets? No. The players must designate one person to sign the ticket on behalf of the group. The Lottery encourages the designated player to sign his/her name along with the group’s name.

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Frequently Asked Questions 1. How does the Lottery verify a person claiming a prize is who they say they are? To claim a prize, a person must present valid photo identification. The Lottery also