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Iowa Lottery wins International Gaming-Compliance award for work in lottery rigging investigation

Apr 19, 2018, 10:29 am

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Iowa Lottery

Long-running case culminated in 2017 guilty pleas from three men

The Iowa Lottery has won an international gaming-compliance award for its work in the long-running lottery jackpot investigation that uncovered fraud against U.S. lotteries and resulted in guilty pleas from three men.

GamblingCompliance on Wednesday named the Iowa Lottery its 2018 recipient for outstanding achievement in compliance. The organization's annual awards that recognize excellence in 11 categories focused on regulatory compliance and responsible gaming were presented in London. The lottery was one of five finalists worldwide for the gaming-compliance award.

"I'm enormously proud of the work we put in and the perseverance investigators showed through the years in bringing this long-running case to a successful conclusion," Iowa Lottery CEO Terry Rich said. "This was a crucial opportunity for us to pinpoint security enhancements and new technologies that we could bring to our operations. I'm confident in the integrity of our games and know we will continue to aggressively monitor and make improvements to protect against vulnerabilities identified."

GamblingCompliance, with headquarters in London and its U.S. hub in Washington, D.C., provides independent legal, regulatory, and business intelligence to the global gambling industry.

The jackpot investigation case began with a lottery ticket purchased in Des Moines in December 2010 and culminated in 2017 with guilty pleas from three men who admitted they illegally claimed prizes by rigging lottery drawings in five states. (See Timeline of the biggest crime in US lottery history below, which outlines how the case went from a search for the winner of a big jackpot to suspicion of wrong-doing to a prosecution of a vast criminal enterprise.)

Eddie Tipton, the man at the center of the investigation, installed malicious computer code that allowed him to predict winning numbers in some lottery drawings.

Tipton's plan took advantage of the primary weakness of computerized drawings: unlike traditional ball drawings, it is impossible for a human being to witness how the numbers are actually generated inside a computer. The computer code was secretly programmed by Tipton to produce certain predictable combinations to occur on specific days of the year.

And according to a recent report, Tipton says that today computerized drawings remain fatally flawed.

Tipton pleaded guilty to three felony charges in Iowa and Wisconsin and was sentenced in August 2017 to up to 25 years in prison. He had conspired with friends and family to claim lottery prizes in Colorado, Kansas, Oklahoma and Wisconsin and attempt to claim a Hot Lotto lottery jackpot in Iowa, which ultimately was not paid. (Hot Lotto has since been discontinued and replaced with the new Lotto America game, which does not use computerized drawings.)

Tipton's younger brother, Tommy Tipton, also pleaded guilty in the case, as did Tipton's long-time friend, Robert Rhodes.

"It's appalling that the person at the center of the case once worked at a lottery-industry vendor organization and willingly committed crimes," Rich said. "He was brought to justice and we have moved forward with an even greater understanding that we must trust but verify in all areas of our operations. We're pleased that this international award recognizes the team for that effort."

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.

2011

2012

2013

2014

2015

2016

2017

2018

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