Lottery scam investigation comes to Tennessee

May 11, 2016, 7:56 am (39 comments)

Tennessee Lottery

Includes video report

NASHVILLE, Tenn. — The Tennessee Education Lottery is cooperating with investigators as they look into one of the most elaborate lottery scams in U.S. history.

The scam was the work of Eddie Tipton, a former security director with the Multi-State Lottery Association.

Tipton has been convicted of fraud and sentenced to ten years in prison.

But his brother and his old college roommate were recently arrested as the jackpot fixing investigation expanded.

Prosecutors in Iowa say surveillance video from an Iowa convenience store shows Eddie Tipton buying a winning ticket worth $14 million back in 2010.

The Assistant Director of Iowa's Division of Criminal Investigation (DCI) said the scam sounds like something you would see in a movie.

"This new to me in my career. I have not seen anything like this," David Jobes said.

Investigators say Tipton used his security clearance to install software on lottery computers.

The software enabled him to manipulate winning lottery numbers in at least six states.

"We continue to work on this case. The agents keep looking at jackpots in different locations," Jobe said.

That includes Tennessee.

The President and CEO of the Tennessee Education Lottery, Rebecca Hargrove, confirmed they provided the names of those who won certain lottery games to investigators.

They are reviewing those names to see if winners have ties to Tipton.

"We feel as confident as we possibly can that Tennessee was not impacted," Hargrove said.

But Tennessee lottery officials confirmed to Newschannel 5 Investigates that Tipton visited the offices of the Tennessee Lottery back in 2004 while he worked for the Multi-State Lottery Association.

"He had no access what-so-ever to our facilities since we started using random number generated drawings," Hargrove said.

Investigators are not focused on games like Mega-millions or Powerball because they use ball drops to pick winning numbers.

They are focused on games like Hot Lotto which use computers — called random number generators — to pick winners.

Tipton's brother actually won jackpots in Oklahoma and Colorado. An investigator was asked could anyone be that lucky?

David Jobe responded, "I wouldn't think so. I know I'm not."

Hargrove said the timing is critical — the state didn't start offering Hot Lotto until 2013 — after Tipton had been caught buying that ticket in Iowa and his scheme began to unravel.

She doubts Tennessee will be impacted by the lottery scam.

"We didn't use any random number generators from the gentleman who provided them," Hargrove said. "Our random number generators have never come from that source."

VIDEO: Watch the report

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.

NewsChannel5, Lottery Post Staff

Comments

mypiemaster's avatarmypiemaster

Boy, this stuff is turning into a virus and the Dragon Lady thinks she is immune.

destinycreation

The GOOD THING about this Nationwide RNG Investigation, is that it EXPOSES the Obvious Security Vulnerabilities and FRAUD that can happen in the game of Lottery using RNG drawings rather than Mechanical Ball Drawings.

FRAUD is EASIER for Hackers with Computer Generated RNG lottery games.

haymaker's avatarhaymaker

So it seems we are just scratching the surface, hopefully this is the beginning of the end for RNG !

Todd's avatarTodd

Quote: Originally posted by haymaker on May 11, 2016

So it seems we are just scratching the surface, hopefully this is the beginning of the end for RNG !

I'm with you: I wish this was the beginning of the end for RNG.  Unfortunately it doesn't appear that the states are getting it. 

Did you watch the video and notice Ms. Hargrove laughingly dismiss the possibility that the Tennessee Lottery's RNG was affected?  Rather than taking a serious tone and assuring people that the lottery is carefully investigating everything, she nearly does an eyeroll as she blows off the reporter's question.

For the life of me I can't understand the lotteries' need to cling to computerized drawings as if they are the lifeblood of the games, when in fact the opposite is true.  I can see how people could conclude that vendors of these drawing machines are "somehow" persuading lotteries to stick with them.

The Texas Lottery demonstrates on a daily basis what I consider to be some of the best, most transparent, lottery drawings, and they are done with modern robotic camera technology that minimizes the costs involved.  I can tell you that if I ran a lottery, I would absolutely adopt their approach.  Too bad the computerized states refuse.

music*'s avatarmusic*

I Agree! with Todd.  People need to vote with their dollars and their voices. Stop playing RNG games and let your legislature know why.

noise-gate

You got to love Priscilla's answer: "We did not get our rng from that guy."

Todd's avatarTodd

Quote: Originally posted by noise-gate on May 11, 2016

You got to love Priscilla's answer: "We did not get our rng from that guy."

Yeah, as if that is the only computerized drawing system on Earth that could have been hacked.

noise-gate

Quote: Originally posted by Todd on May 11, 2016

Yeah, as if that is the only computerized drawing system on Earth that could have been hacked.

My thought exactly Todd.

Ron5995

Quote: Originally posted by Todd on May 11, 2016

I'm with you: I wish this was the beginning of the end for RNG.  Unfortunately it doesn't appear that the states are getting it. 

Did you watch the video and notice Ms. Hargrove laughingly dismiss the possibility that the Tennessee Lottery's RNG was affected?  Rather than taking a serious tone and assuring people that the lottery is carefully investigating everything, she nearly does an eyeroll as she blows off the reporter's question.

For the life of me I can't understand the lotteries' need to cling to computerized drawings as if they are the lifeblood of the games, when in fact the opposite is true.  I can see how people could conclude that vendors of these drawing machines are "somehow" persuading lotteries to stick with them.

The Texas Lottery demonstrates on a daily basis what I consider to be some of the best, most transparent, lottery drawings, and they are done with modern robotic camera technology that minimizes the costs involved.  I can tell you that if I ran a lottery, I would absolutely adopt their approach.  Too bad the computerized states refuse.

It's mystifying, especially given the national news coverage the Hot Lotto RNG hacking scandal has received. And yet Hot Lotto is still associated with MUSL, still uses computer RNG, and many are still buying! Crazy.

Personally, I'd never buy any MUSL associated RNG game, such as 2x2, Hot Lotto, etc. Heck, I'm leery of even buying a Powerball or Mega Millions ticket these days, despite being ball drawn, unless the jackpot is record breaking high.

Unless numbers sales drop sharply, it's likely many lotteries, such as Tennessee Lottery, will downplay the hacking issues, and continue / expand the use of RNG.

I couldn't find past sales data on the Hot Lotto page. Be interested in knowing whether Hot Lotto ticket sales dropped much / overall sales history ... that data would likely shed much light on the lack of concern regarding RNG / hacking by most lotteries. If Hot Lotto sales, long-term, weren't affected much, that could explain it.

Stack47

Hargrove said the timing is critical — the state didn't start offering Hot Lotto until 2013 — after Tipton had been caught buying that ticket in Iowa and his scheme began to unravel.

Then why is MUSL wasting time investigating Tennessee Hot Lotto winners?

Tipton's brother actually won jackpots in Oklahoma and Colorado.

But can they prove Eddie Tipton rigged those drawings?

RJOh's avatarRJOh

Quote: Originally posted by Stack47 on May 11, 2016

Hargrove said the timing is critical — the state didn't start offering Hot Lotto until 2013 — after Tipton had been caught buying that ticket in Iowa and his scheme began to unravel.

Then why is MUSL wasting time investigating Tennessee Hot Lotto winners?

Tipton's brother actually won jackpots in Oklahoma and Colorado.

But can they prove Eddie Tipton rigged those drawings?

Sounds like anyone who wins a jackpot of a MUSL game is a suspect because they have accomplished the impossible.

bobby623's avatarbobby623
IMHO, I doubt that any lottery official who went to great lengths to convince the politicians that they would have more money to spend if they dumped the ball machines is going to admit to being wrong.
Lottery directors are seen as financial wizards who don't make mistakes.
Switching back to ball machines would require funds that the political class is not about to give up without a fight. 
A recommendation that players stop buying tickets is ludicrous. There is no way on earth or Hell that such an effort be seriously organized and put into effect.
Like it or not, the RNG computers that are now in place are here to stay.
rca1952

No NoAll said and done, but why isn't the third person's face, The Collage Room Mate, posted for all to see!!! Sounds fishy to me...

Technics's avatarTechnics

I just wish people were sharp enough to fall back from playing in cases where these scams come out. You can get the results you want simply by NOT funding it by playing. Don't play and they will make changes. People's greed and addictions to the hope of winning have a grip on their logical thinking. Confused

KY Floyd's avatarKY Floyd

"People need to vote with their dollars and their voices.:

Your voice doesn't mean a thing if you don't back it up with your wallet, and the lotteries have an enormous amount of evidence that people don't do that. How many people said they were going to cut back or even completely stop buying PB tickets when MUSL increased the odds a few months before selling over a billion dollars worth of tickets for a single drawing? The lottery waves a bunch of money in the air and people buy tickets to try and get it.

"But can they prove Eddie Tipton rigged those drawings?"

If they can find the code and prove that it was used for those drawings it's possible. That's a different question than "Can they convince a jury that Eddie Tipton rigged those drawings?" When they tell the jury how improbable it is that  somebody who knew Tipton won through random chance the jurors may be perfectly willing to believe he rigged those games. Then on the way home they'll buy some lottery tickets with the firm belief that there's a realistic chance that they  might win.

"I just wish people were sharp enough to fall back from playing in cases where these scams come out."

Yeah, and you wish you'd win the lottery, too, but it's not very likely. Tipton's scam (there's really just one) didn't do anything to decrease your chances of winning. It just would have reduced your share if you had played the same combination. There's actually a potential advantage in having the drawing rigged by an individual who's in it for themselves. I'm assuming that Tipton used combinations that he thought were less likely to be picked by other players, in order to reduce the chances of sharing the  prize. That would then mean that all players who chose less likely combinations would have a somewhat better chance of picking the same one Tipton had programmed to win. I'd rather have a (big) jackpot to myself, but sharing one with other people would put more money in my pocket than any ticket I've bought so far.

The flip side of that (and I wonder if he's thought about it in hindsight) is that if he had deliberately used combinations that were more likely to have been played by others his wins may have been easier to hide. At the extreme, imagine the authorities trying to investigate the thousands of people who would have won if 1,2,3,4,5,6 had been the winning combination. Even if they find that somebody with a connection to Tipton was one of the winners who played 5,10,15,20,25,30, what's their argument when so many other people played that same combination and a bunch of similar ones?

lejardin's avatarlejardin

Quote: Originally posted by mypiemaster on May 11, 2016

Boy, this stuff is turning into a virus and the Dragon Lady thinks she is immune.

I am going to ask a dumb question. 

I remember RDGRNR used to call the woman in charge of TN lottery the Dragon Lady, can someone tell me why she is called that?

LiveInGreenBay's avatarLiveInGreenBay

Quote: Originally posted by lejardin on May 11, 2016

I am going to ask a dumb question. 

I remember RDGRNR used to call the woman in charge of TN lottery the Dragon Lady, can someone tell me why she is called that?

Because she looks like Hillary Clinton?

lejardin's avatarlejardin

Quote: Originally posted by LiveInGreenBay on May 11, 2016

Because she looks like Hillary Clinton?

ONG, Hahahahahahahahahahahahahahaha not exactly the answer I was expecting, about fell off my chair.

You sir, have a wicked sense of humor, I am still dyin here.......

Kingdarius615

She was with Georgia lottery ,, they let go and tn gave her a big signing bonus,,,,, look @ tn payouts ,,,, somethings don't add up

Todd's avatarTodd

Quote: Originally posted by rca1952 on May 11, 2016

No NoAll said and done, but why isn't the third person's face, The Collage Room Mate, posted for all to see!!! Sounds fishy to me...

Nothing fishy, the roommate's mug shot was already posted previously:  https://www.lotterypost.com/news/302838

Check the scrolling section at the bottom of this news story for all the previous articles about the scandal.

TnTicketlosers's avatarTnTicketlosers

Anyone that is Flamboyant is a dragon .......she is the queen ,if this answers your question,she was fired for being so flamboyant,,,,,take notice to me Im the queen of the lottery....blah blah blah....she is more of a scammer than Tipton..we all know it,you cant win nothing here...

sully16's avatarsully16

Tipton has never been involved with Tennessee lottery scandals....

Stack47

Quote: Originally posted by RJOh on May 11, 2016

Sounds like anyone who wins a jackpot of a MUSL game is a suspect because they have accomplished the impossible.

LOL

Stack47

Quote: Originally posted by KY Floyd on May 11, 2016

"People need to vote with their dollars and their voices.:

Your voice doesn't mean a thing if you don't back it up with your wallet, and the lotteries have an enormous amount of evidence that people don't do that. How many people said they were going to cut back or even completely stop buying PB tickets when MUSL increased the odds a few months before selling over a billion dollars worth of tickets for a single drawing? The lottery waves a bunch of money in the air and people buy tickets to try and get it.

"But can they prove Eddie Tipton rigged those drawings?"

If they can find the code and prove that it was used for those drawings it's possible. That's a different question than "Can they convince a jury that Eddie Tipton rigged those drawings?" When they tell the jury how improbable it is that  somebody who knew Tipton won through random chance the jurors may be perfectly willing to believe he rigged those games. Then on the way home they'll buy some lottery tickets with the firm belief that there's a realistic chance that they  might win.

"I just wish people were sharp enough to fall back from playing in cases where these scams come out."

Yeah, and you wish you'd win the lottery, too, but it's not very likely. Tipton's scam (there's really just one) didn't do anything to decrease your chances of winning. It just would have reduced your share if you had played the same combination. There's actually a potential advantage in having the drawing rigged by an individual who's in it for themselves. I'm assuming that Tipton used combinations that he thought were less likely to be picked by other players, in order to reduce the chances of sharing the  prize. That would then mean that all players who chose less likely combinations would have a somewhat better chance of picking the same one Tipton had programmed to win. I'd rather have a (big) jackpot to myself, but sharing one with other people would put more money in my pocket than any ticket I've bought so far.

The flip side of that (and I wonder if he's thought about it in hindsight) is that if he had deliberately used combinations that were more likely to have been played by others his wins may have been easier to hide. At the extreme, imagine the authorities trying to investigate the thousands of people who would have won if 1,2,3,4,5,6 had been the winning combination. Even if they find that somebody with a connection to Tipton was one of the winners who played 5,10,15,20,25,30, what's their argument when so many other people played that same combination and a bunch of similar ones?

Iowa Assistant Attorney General Rob Sand alleges that Tipton installed software known as a root kit that enabled him to manipulate numbers in computers that were supposed to randomly generate number combinations for several lottery games. The program would then self-destruct leaving no trace. Tipton denies that allegation.

They prove to the jury it was Tipton that bought the Iowa ticket, but proving a self-destructing program existed might be very difficult. If the AG could replicate the self-destructing program it might be more convincing to a jury, but knowing it's possible should be the end to RNG drawings.

TheMeatman2005's avatarTheMeatman2005

Had Tipton not bought the tickets (and ordered food) himself, they might not have caught him and he could still be rigging the numbers.

He got caught because he got GREEDY!!!! Red DevilMadEvil Looking

haymaker's avatarhaymaker

Quote: Originally posted by Todd on May 11, 2016

I'm with you: I wish this was the beginning of the end for RNG.  Unfortunately it doesn't appear that the states are getting it. 

Did you watch the video and notice Ms. Hargrove laughingly dismiss the possibility that the Tennessee Lottery's RNG was affected?  Rather than taking a serious tone and assuring people that the lottery is carefully investigating everything, she nearly does an eyeroll as she blows off the reporter's question.

For the life of me I can't understand the lotteries' need to cling to computerized drawings as if they are the lifeblood of the games, when in fact the opposite is true.  I can see how people could conclude that vendors of these drawing machines are "somehow" persuading lotteries to stick with them.

The Texas Lottery demonstrates on a daily basis what I consider to be some of the best, most transparent, lottery drawings, and they are done with modern robotic camera technology that minimizes the costs involved.  I can tell you that if I ran a lottery, I would absolutely adopt their approach.  Too bad the computerized states refuse.

Had to go back and watch again, yep, the arrogance of ignorance !

TnTicketlosers's avatarTnTicketlosers

Flamboyant you mean.

patricks6's avatarpatricks6

bring back the balls n quit controlling ur low payouts

ekem6078's avatarekem6078

Quote: Originally posted by music* on May 11, 2016

I Agree! with Todd.  People need to vote with their dollars and their voices. Stop playing RNG games and let your legislature know why.

I Agree! If everyone would stop playing the RNG games, and only the ball games, this would stop this.  The RNG games is just one way the lottery knows who's playing what and how many people is on a certain number.  Just think about, if ex:5000000 people were playing ex: 123 in the pick3, with a 1.00 exact order in their state( and they all ran their tickets thur the machine,  do you think by using the RNG machines, the lottery officials are going to drop that number?   H  NO.!!  IF they did the lottery will soon go BROKE. This is why they use these machines.  Think about it.   That's why I know It's not random.  Not with the RNG machines it's not.  Now Powerball and Mega Million maybe, but look at the odds.  jmo.

Subscribe to this news story