Multistate Lottery Association Settles with Winner who Sought Bigger Prize Due to Hot Lotto Fraudster

Posted on: November 25, 2019, 05:34h. 

Last updated on: November 25, 2019, 06:18h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

The Multistate Lottery Association (MUSL) has settled with a 2011 lottery winner who argued that his $9 million jackpot would have been almost three times as big had the previous week’s Hot Lotto draw not been fixed by notorious fraudster Eddie Tipton.

MUSL
“Lucky” Larry wins the lottery again after MUSL pays out on his claim that he would have won a bigger prize had Tipton not fixed the previous week’s draw. (Image: Iowa Lottery)

“Lucky” Larry Dawson – so known because of his golf game, not his lottery win – only learned of Tipton’s interference in 2017, when the former director of IT security at MUSL was sentenced to a decade in prison for rigging at least six draws in at least five different states.

The final rigged draw, which proved to be Tipton’s undoing, occurred a week before Dawson’s windfall.

Dawson argues that had Tipton not fixed the event, the $16.5 million prize would have rolled over and he would have got that too.

The financial advisor from Webster City, Iowa sued MUSL for $10 million, which is the size of the lump sum cash option, plus interest.

The settlement, for an undisclosed sum, was reached just weeks before the case was due to go to trial.

Tipton’s Downfall

Tipton used his position at MUSL to install a self-destructing hack program into the lottery system’s random number generator so it would generate a preset group of numbers known only to him on three days of the year.

But when the winner of the December 2010 Hot Lotto jackpot made several attempts to secure the prize via a third party just days before the claim was due to expire, lottery officials became suspicious.

And when police released surveillance footage of a man purchasing the winning ticket from a Des Moines convenience store, MUSL workers were shocked to identify their colleague, Eddie Tipton.

The $16.5 million Tipton ultimately failed to claim was redistributed among the state lotteries that make up MUSL’s membership, while the Iowa lottery plowed its share into promotional activities.

Keeping the MUSL on Tipton

This is the second time this year MUSL has settled legal claims resulting from Tipton’s fraudulent activities.

In September, the organization agreed to establish a settlement fund of $4.3 million to resolve a class-action lawsuit for lottery players who believe they lost out due to Tipton’s tampering with Hot Lotto draws on certain dates between 2005 and 2013. The fund will reimburse the cost of eligible non-winning tickets.

Lawyers for the plaintiffs in that case had attempted to depose Tipton to testify in a bid to prove that MUSL was allegedly neglectful of its duty to ensure the games were fair, something MUSL likely wished to avoid at all cost.

Tipton told police after his arrest that he had tried to warn his superiors that there were exploitable flaws in the system, but claims he was ignored. According to The Des Moines Register, he continues to claim to this day the system remains vulnerable.