A class-action lawsuit to benefit potentially millions of owners of losing tickets linked to the largest lottery scam in U.S. history has been settled for $4.3 million, according to a statement sent by an attorney in the case.
The settlement will refund the cost of tickets purchased in nine specific drawings dates for games sold in 33 states, the Virgin Islands, Puerto Rico and Washington, D.C., between Nov. 23, 2005 and May 23, 2013. A settlement website will be set up to assist people who seek refunds.
Proof of purchase — primarily, copies of losing tickets — is not required to submit a claim for up to 10 non-winning tickets but settlement administrators have the right to request verification to prevent fraud. The cash refund will vary based on value of the ticket, whether someone has proof of purchase and the number of valid claims submitted, the Register was told by attorneys in the case. Online court documents were not filed as of Monday at noon.
The settlement is a coda to the decade-long saga springing from a computer-assisted scam Eddie Tipton, the former IT director for the Multi-State Lottery Association in Urbandale, ran with the national lottery. Tipton added a secret code to "random" number-generating computer software in 2005 that allowed him to narrow drawing winning odds in multiple games from as great as 5 million to 1 down to 200 to 1.
Tipton's scam went undetected for years and the code was replicated in lottery computer software across the nation. He hijacked at least five winning drawings totaling more than $24 million in prizes in Colorado, Wisconsin, Iowa, Kansas and Oklahoma, court records show.
In 2017, he was sentenced in 2017 to up to 25 years in prison.
The lottery association — commonly referenced as MUSL — is an umbrella organization that is owned and operated by 36-member lotteries, including the Iowa Lottery. Its executives previously have said they no longer use computer programs Tipton designed.
Iowa man who spent $63 on tickets filed lawsuit
Burlington resident Dale Culler is among at least three people who have filed lawsuits naming MUSL in connection with the rigged games. Polk County District Court Judge Michael Huppert in January granted Culler's effort to seek damages on behalf of potentially hundreds of thousands of players.
MUSL has denied and continues to deny any gaming wrongdoing, according to the settlement statement sent to the Register by Blake Hanson, an attorney for Culler. The association chose to settle based on expected litigation expenses and uncertain risks should the lawsuit go to trial, according to information shared with the Register.
Court documents show Culler spent $63 to purchase tickets in two games he believes were affected by Tipton's scam. MUSL has agreed not to oppose paying 30 percent of the settlement — $1.29 million — for Culler's legal fees as well as a $20,000 "incentive award" for spearheading the lawsuit. Those payments will be deducted from the $4.3 million available for refunds.
The class-action lawsuit was initially linked to at least 7.2 million lottery tickets but some of the games were removed from the list because they did not use Tipton's software. The settlement agreements do not indicate how many losing tickets remain eligible for refunds.
The statement issued by Hanson on Monday offered no further comment other than: "MUSL remains committed to the integrity and fairness of the multi-jurisdictional and state lottery games that its members offer."
Both parties declined further comment.
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
- Judge: winner's lawsuit in lottery-fixing case can continue, Oct. 13, 2016
- Alleged lottery scandal conspirator to enter new plea, Nov. 14, 2016
- Accused lottery rigger Eddie Tipton facing new Wisconsin charges, Dec. 22, 2016
- Man files lawsuit over rigged lottery jackpots, Jan. 4, 2017
- Trials for Tipton brothers charged in lottery scandal delayed, Jan. 8, 2017
- Former MUSL official received severance amid lottery jackpot scandal, Jan. 10, 2017
- Texas man pleads guilty to fraud in lottery scandal case, Jan. 11, 2017
- Iowa Supreme Court hears lottery rigging case, Feb. 14, 2017
- Kansas files lawsuit against accused lottery rigger, Mar. 16, 2017
- Best friend to testify against Tipton at July lottery rigging trial, Mar. 31, 2017
- Mastermind of lottery fraud will explain how he rigged jackpots, Jun. 12, 2017
- FBI missed rigged jackpot in 2006 before lottery scheme grew, Jun. 19, 2017
- The 5 lottery jackpots Tipton and his friends stole, Jun. 20, 2017
- Lottery jackpot rigger's Iowa convictions dismissed, Jun. 23, 2017
- IT'S OFFICIAL: Tipton pleads guilty to rigging computerized lottery drawings, Jun. 29, 2017
- Lottery rigging accomplice used Wisconsin payout for offshore tax scam, Jul. 6, 2017
- Hot Lotto multi-state lottery game to end in October, Aug. 9, 2017
- Lottery rigging mastermind sentenced to 25 years in prison, Aug. 22, 2017
- Winner sues Colorado Lottery 12 years after rigged drawing, Oct. 5, 2017
- Lottery scammer rigged more drawings than first thought, records show, Feb. 19, 2018
- How a gaming geek with a checkered past pulled off the biggest lottery scam in U.S. history, Mar. 16, 2018
- Infamous lottery scammer says US computerized lottery drawings remain fatally flawed, Mar. 19, 2018
- Iowa Lottery wins International Gaming-Compliance award for work in lottery rigging investigation, Apr. 19, 2018
- The man who cracked the lottery, May 3, 2018
- Memo: Iowa Lottery kept selling games after security warning, Aug. 1, 2018
- Investigation finds lottery scamming Tipton brothers have repaid virtually nothing, Dec. 27, 2018
- Lawyers seek to depose lottery fraud mastermind in prison, Jan. 21, 2019
- Iowa lottery lawsuit granted class action, affecting 7.2 million tickets in 19 states, Jan. 28, 2019
- Colorado man who unwittingly split a $4.8M jackpot with scammer is fighting the Colorado Lottery, Apr. 15, 2019
- Lottery-scamming brothers avoid asset seizures by transferring property to their mother, Apr. 29, 2019
- Lottery winner can seek bigger prize at trial, judge rules, May 17, 2019
- Court rejects Colorado man's claim to full $4.8M lottery jackpot he unwittingly split with scammers, Jun. 21, 2019