‘Lucky’ Larry Dawson will get his day in court

Webster City lottery winner is granted jury trial over jackpot dispute

DES MOINES — “Lucky Larry” may have a shot to win millions more — this time from a jury.

A judge has ordered a trial in a lawsuit filed by Iowa lottery winner Larry Dawson, of Webster City, who contends a $9 million jackpot that he won in 2011 should have been nearly three times as big.

Dawson filed his lawsuit in 2016 after an investigation revealed that lottery contractor Eddie Tipton rigged the previous $16.5 million jackpot, bought the winning ticket himself and unsuccessfully worked with associates to claim it.

Dawson’s lawsuit against the Multi-State Lottery Association and the Iowa Lottery contends the $16.5 million should have carried over to the jackpot that he won under Hot Lotto’s rules.

Judge Carla Schemmel ruled earlier this month that the association and the lottery are not immune from liability under state law. She says that a “full hearing of this matter” is required to sort out the complex case.

The case is set for trial Dec. 2.

Financial planner “Lucky” Larry won a $9 million jackpot in 2011, but contends it should have been worth $25.5 million had the prior drawing not been rigged.

A lawsuit filed in 2016 sought class action certification. It was the first potential class action to arise from the jackpot-rigging allegations and the second suit overall

Lawyers filed the consumer fraud case against the Multi-State Lottery Association, the Iowa-based nonprofit that helps administer games that are offered by state lotteries. It alleges the association failed to prevent games from being rigged and failed to operate them in accordance with their own rules.

The association’s former security director, Eddie Tipton, rigged the lotteries’ random number generators to allow him to predict winning numbers on three days of the year.

Tipton installed software on the random number generators that worked as intended 362 days of the year, but directed them to produce predictable numbers May 27, Nov. 22 and Dec. 29 if the drawings also occurred on Wednesdays or Saturdays after 8 p.m. Even then, Tipton wouldn’t know the precise winning combinations but that they’d be predictable.

In 2016, the Multi-State Lottery Association argued that Dawson does not have legal standing to sue because his “claimed injury is merely speculative and hypothetical, and therefore cannot be redressed.”

Dawson filed his lawsuit in February 2016.

After a Tipton-rigged jackpot, the Hot Lotto prize reset to its $1 million base. Dawson won the game’s next jackpot, worth $9 million, in May 2011. He argues that, under the rules of the game, the money from the rigged drawing should have rolled over and created a $25.5 million pool for the jackpot he won rather than being shared by the states as an unclaimed prize.

In a legal brief, the association argued that Dawson’s claim that the prize money would have continued to carry over until he won is “complete speculation and conjecture.”

“Had the December 29, 2010 Hot Lotto game not been allegedly rigged, different numbers would have been drawn on that date and may have resulted in a different jackpot winner,” association attorneys wrote. “Moreover, had the jackpot continued to progressively increase following the December 29, 2010 drawing, the player pool for all drawings would have increased as well, resulting in more number combinations being purchased for each drawing, until a jackpot winner was chosen.”

Therefore, the likelihood of someone winning the jackpot before Dawson would have increased and the $9 million jackpot he won “may very well have been less,” they wrote.

One of Dawson’s attorneys, Nicholas Mauro, said at the time that Dawson’s injuries weren’t hypothetical.

“There is nothing speculative about the fact the December 2010 drawing was rigged, or the fact Mr. Dawson was the next legitimate winner,” he said. “According to the rules of the game — in which the lottery asks the public to put its faith — his jackpot should have included the December 29, 2010, prize money.”