A U.S. Senate oversight panel demanded Wednesday to know how state lotteries are increasing their security measures after an insider allegedly rigged jackpots for years to enrich himself and associates.
Sen. John Thune, chairman of the Committee on Commerce, Science and Transportation, said the allegations of fraud in lottery games offered for sale around the country raise serious concerns. Yet he said it's not clear what the Multi-State Lottery Association, an Iowa-based nonprofit that administers the games, is doing to address them.
In a letter to association leaders, Thune said his committee wants to know by July 7 what steps the group has taken to prevent additional fraud in games that rely on random number generators to pick winning combinations. The Republican fromSouth Dakota said the committee wants the results of any internal investigation conducted into the fraud and details on the assurances the association gives customers about the integrity of games. The committee, which has subpoena power, wants a briefing by July 15.
Investigators say the association's former security director, Eddie Tipton, installed software code that allowed him to predict winning numbers on specific days of the year. They say he then worked with associates to purchase winning tickets with those numbers and collect the prizes. A jury convicted Tipton last year of rigging a $16.5 million Hot Lotto jackpot after he was caught on security camera purchasing the winning ticket at a Des Moines gas station.
Efforts to collect that jackpot failed, but investigators say Tipton and his associates were successful in collecting three others that paid about $2 million in cash in Colorado, Wisconsinand Oklahoma. Tipton also allegedly bought two winning scratch tickets worth $44,000 in Kansas. He is awaiting trial on charges linking him to those prizes.
Tipton's brother, a former Texas justice of the peace, and his friend, businessman Robert Rhodes, are also awaiting trial.
The association is governed by a board that includes the directors of lotteries in 37 states and U.S. territories. It runs the popular Powerball game, which hasn't been implicated in any of the fraud allegations.
Prosecutors say Tipton's scheme relied on his access to random number generators located at the association headquarters and individual state lotteries. They say he installed code after the machine had been audited by a security vendor that directed it to not produce random numbers on certain days and instead use an algorithm that he could predict. All six prizes linked to the alleged fraud were drawn on either Nov. 23 or Dec. 29 between 2005 and 2011.
In his letter, Thune noted that a recent rule change has meant soaring Powerball jackpots, including a record $1.58 billion drawing in January. He said some critics believe "that the excitement about increasingly large jackpots has eclipsed reports of insider fraud and what MUSL is doing to address the issue."
The association fired Tipton after his arrest last year and replaced the machines he worked on. Its board also suspended its founder and longtime director, Charles Strutt, who retired March 31 amid an ongoing search for his replacement.
An oversight committee of the Iowa Legislature launched a similar inquiry earlier this year, and lawmakers say they were convinced that key security changes have been made.
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
- Deadline for claiming $16.5M Hot Lotto jackpot nears, Sep. 21, 2011
- Unclaimed Iowa lottery jackpot to expire Dec. 29, Dec. 1, 2011
- Iowa $16.5M Hot Lotto winner claims prize with two hours to spare, Dec. 29, 2011
2012
- 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
2013
- 1 year later, Iowa Lottery still hunting for suspicious no-show winner, Jan. 30, 2013
- Inquiry in Iowa Lottery mystery touches Canada, Jul. 26, 2013
- Lottery jackpot probe heats up after immunity deal, Oct. 8, 2013
2014
- Iowa Lottery still hunting mystery Hot Lotto winner [video], Oct. 10, 2014
2015
- 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
2016
- 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
Thank You, Todd Northrop, for keeping us updated and informed about the latest news on this crime.
I know it is serious when the Federal Government gets involved.
This could influence RNG's in our games. Will they be halted and replaced?
Sen. John Thune, chairman of the Committee on Commerce, Science and Transportation, said the allegations of fraud in lottery games offered for sale around the country raise serious concerns. Yet he said it's not clear what the Multi-State Lottery Association, an Iowa-based nonprofit that administers the games, is doing to address them.
It happened almost five years ago and the last time I looked the Hot Lotto game uses the same RNG. We all would like to know why MUSA did nothing about it (and we're not running for re-election).
I hope that MUSLA has changed the policy of who can access the computers. But, I am with Todd when he says, Stop the RNG games.
When Terry Rich was on here a few months ago he made it pretty clear that RNG draws were not going away.
Maybe now that will change after all.
Who's watching the watchers?
The ancient Romans would say, "Who guards the guards?". In Latin or Greek.
Quis custodiet ipsos custodes? is a Latin phrase found in the work of the Roman poet Juvenal from his Satires (Satire VI, lines 347–8). It is literally translated as "Who will guard the guards themselves?", though is also known by variant translations.
I wonder if Eddie Tipton had not purchased the "winning" ticket himself, would he have been caught?
Thank You for your educated reply.
We can learn from the ancients and do not need to re-invent the wheel. So to speak.
The biggest fraud that is perpetrated on the lottery, which should actually be A BIG SCANDAL, is the taxation of lottery wins. I bet nobody in the senate wants to talk about that.
I can not take the credit. It wasn't an educated reply, it was GOOGLE
So that tells me that TIPTON fixed the Tennessee computers when he visited in 2004,,,why no one ever wins or shown on line as winners......interesting....I cant wait till it all goes down..and certain people are caught.
If they could tax it at 100 percent....They would.
My guess is he wouldn't have been caught. I assume his other accomplices gave him part of their winnings. His downfall was greed. His share of the others wasn't enough, he had to go for more. And he was too greedy to share it with a frontman on the last one so he bought it himself.
Had he stopped after he had accumulated a few million and called it good, he almost certainly wouldn't have been caught. If he had shared the last 12 mil ticket with a frontman, he still probably wouldn't have been caught, but who knows? Greed, greed, greed.