The winner of a $9 million state lottery jackpot can continue a lawsuit that contends he would have won millions more if the prior drawing had not been rigged by a rogue insider, an Iowa judge has ruled.
District Court Judge Karen Romano rejected requests Wednesday to dismiss the case, which is the first filed against the Multi-State Lottery Association over a major jackpot-rigging scandal inside the organization.
She ruled that the association and the Iowa Lottery are not immune from the lawsuit and that Larry Dawson of Webster City, Iowa has the legal standing to bring the case.
Dawson, a financial adviser nicknamed "Lucky Larry," won a Hot Lotto jackpot worth $9 million in May 2011. He contends that the jackpot should have been worth $25.5 million had the prior jackpot in December 2010 not been fixed by association security director Eddie Tipton.
A jury convicted Tipton last year of fraud for allegedly tampering with the random number generator that picked the digits for the $16.5 million drawing at the association's suburban Des Moines headquarters. Investigators say that Tipton then bought the winning numbers himself and worked with associates in an unsuccessful attempt to claim that prize. The Multi-State Lottery Association ultimately sent the money back to the 16 state lotteries that offer the game as an unclaimed prize.
Dawson's lawsuit, filed earlier this year, contends the prize pool should have rolled over to subsequent drawings under Hot Lotto's official rules since there was no legitimate winner. He won the game's next jackpot, and contends it should have been much larger.
The lawsuit alleges that lax security measures at the association allowed Tipton to carry out his scheme undetected for years. He has since been charged with working with associates to claim jackpots worth millions in Colorado, Wisconsin, Oklahoma and Kansas. Tipton has pleaded not guilty to those charges and is appealing his earlier conviction.
Before answering Dawson's lawsuit, the Iowa Lottery and the association filed motions to dismiss the case based on several legal theories, including that they are legally shielded and that Dawson's injuries were too speculative.
In a statement, Dawson's attorneys said they were pleased with the ruling and look forward to continuing the case.
"Lottery players across the country, including Iowans, were defrauded as a result of rigged lottery games," said the attorneys, Jerry Crawford and Nick Mauro. "This ruling allows us to focus on learning why and how the Iowa Lottery and (the association) allowed this to occur. More important, it provides the opportunity to hold them accountable for their conduct."
Timeline of the biggest crime in US lottery history
The following is a compilation of Lottery Post news coverage chronicling the Hot Lotto mystery and subsequently discovered crime.
We start the timeline with a news story indicating that only 3 months remained for the $16 million Hot Lotto jackpot to be claimed.
- Iowa Lottery security chief bent on determining identity of jackpot winner, Jan. 10, 2012
- NY lawyer in lottery mystery travels to Iowa this week, Jan. 17, 2012
- Iowa Lottery security chief to grill NY lawyer over Hot Lotto ticket, Jan. 17, 2012
- Representative of Hot Lotto winner named in lawsuit, Jan. 20, 2012
- Hot Lotto trust representative won't name winner, Jan. 20, 2012
- Iowa Lottery threatens to deny jackpot payout if winner stays anonymous, Jan. 23, 2012
- Lawyer gives up $14 million Iowa lottery ticket claim, Jan. 26, 2012
- $14.3 million Hot Lotto prize claim withdrawn, Jan. 27, 2012
- Iowa Legislators satisfied with Lottery's handling of mystery jackpot winner, Feb. 1, 2012
- Iowa Lottery to give away millions from jackpot mystery, Feb. 26, 2012
- Iowa Lottery director: 50-50 that Hot Lotto mystery will be solved, Aug. 9, 2012
- Iowa officials trying to solve lotto mystery, may release surveillance video, Aug. 19, 2012
- MUSL employee arrested in Hot Lotto jackpot mystery, Jan. 15, 2015
- BOMBSHELL: MUSL employee might have rigged Hot Lotto computerized drawing, Apr. 13, 2015
- Texas man charged in Iowa lottery case contests extradition, Apr. 20, 2015
- Extradition trial begins this week in $16.5M Hot Lotto fraud case, Jun. 7, 2015
- Inside the biggest lottery scam ever, Jul. 7, 2015
- Trial underway in world's biggest lottery fraud case, Jul. 14, 2015
- Lottery security chief: Rigging computerized game "sadly" possible, Jul. 15, 2015
- Prosecution rests in Hot Lotto trial, Jul. 16, 2015
- Defense quickly wraps up in Hot Lotto trial, Jul. 16, 2015
- Hot Lotto case moves to jury for deliberations, Jul. 17, 2015
- Former lottery security employee guilty of rigging $14.3M drawing, Jul. 20, 2015
- MUSL security worker who rigged drawing gets 10 years, Sep. 9, 2015
- HOT LOTTO DRAWING CHEAT CHARGED WITH RIGGING MORE JACKPOTS, Oct. 9, 2015
- Texas authorities had previously investigated brother of lottery cheat, Oct. 14, 2015
- Another $1.2M Hot Lotto jackpot rigged by Tipton, officials say, Nov. 21, 2015
- Jackpot-fixing investigation expands to more state lotteries, Dec. 18, 2015
- Prosecutors say Tipton rigged two jackpots he purchased tickets for in Kansas, Dec. 21, 2015
- Maine gives names of Hot Lotto winners to Iowa team looking into rigging scheme, Dec. 23, 2015
- S.C. Lottery assures public no computerized drawings used in state, Dec. 23, 2015
- Kansas lottery players questioning game's integrity, Dec. 23, 2015
- MUSL CHIEF OUSTED OVER JACKPOT-RIGGING SCANDAL, Dec. 23, 2015
- Lottery scandal unlikely to affect New Mexico, official says, Dec. 26, 2015
- Tipton granted delay in next trial until July, Dec. 29, 2015
- Iowa Lottery CEO Terry Rich to answer lottery player questions live Monday evening, Jan. 11, 2016
- First lawsuit in state lottery-fixing scandal seeks millions, Feb. 4, 2016
- MUSL seeks to dismiss lawsuit over rigged jackpot, Apr. 1, 2016
- Lottery scammer's brother facing criminal charges, Apr. 6, 2016
- Investigators find Tipton's software code to rig computerized lottery drawings, Apr. 7, 2016
- Lottery rigging scandal prompts security audit in South Dakota, Apr. 13, 2016
- Preliminary hearing rescheduled for Tommy Tipton in lottery rigging case, Apr. 22, 2016
- Third suspect surrenders in national lottery rigging scandal, Apr. 28, 2016
- Lottery scam investigation comes to Tennessee, May 11, 2016
- Investigators find another friend of Tipton who cashed rigged lottery prize, May 11, 2016
- Convicted computerized drawing fraudster argues Iowa court appeal, Jun. 16, 2016
- US Senate panel demands info in lottery scandal, Jun. 22, 2016
- Lottery rigging trial to be moved out of Des Moines, Jun. 27, 2016
- Eddie Tipton's new trial delayed until 2017, Jul. 1, 2016
- Iowa court reverses part of Tipton's lottery fraud conviction, Jul. 28, 2016
- Internal investigation concludes Tipton acted alone to rig lottery drawings, Aug. 10, 2016
- Prosecutors say 2 more men may be linked to lottery riggings, Aug. 24, 2016