Lotto do-over? Hot Lotto scandal improperly shrank next jackpot, winner says

Five years ago, Larry Dawson of Webster City won a Hot Lotto jackpot worth up to $9 million.

Wednesday, he said the lottery owes him much more.

The reason: more fallout from convicted Hot Lotto fraudster Edward Tipton.

Dawson filed a lawsuit Wednesday against the Iowa Lottery and the Multi-State Lottery Association asserting unjust enrichment, negligence and breach of contract over a Dec. 29, 2010, jackpot scandal he says affected his winnings in a later drawing.

At issue is what lottery officials did with the jackpot that was eventually found to be fraudulent. The money was returned to the participating state lotteries as an unclaimed prize, the suit says. But it instead should have been rolled over to make subsequent prizes bigger, the suit alleges.

And so when Dawson won the very next Hot Lotto jackpot in May 2011, his attorneys argue, the prize should have had a $16 million cash value instead of the $6 million cash value his winning ticket got.

'This amounts to unjust enrichment to the lotteries because the Dec. 29, 2010, drawing was not legitimate and did not result in a winner according to the lottery's own rules,” said Jerry Crawford, one of Dawson's Des Moines attorneys. 'When people buy a lottery ticket, they understand that their odds are 1 in 29 million or worse, but they don't think for a moment that their chances (are) 0 in 29 million because the game was rigged.”

The suit asks that a judge void the December 2010 jackpot and award the money - plus interest to be determined - to Dawson.

Nice try, the Iowa Lottery said in response.

'It is impossible to rewrite history. No one can know what would have occurred in this case had any event in it been charged,” Iowa Lottery chief executive Terry Rich said in a statement. 'We believe that Mr. Dawson rightfully was paid the jackpot to which he was entitled.”

Tipton, of Norwalk, was director of security for the Multi-State Lottery, of which Iowa is a part and which runs the Hot Lotto game.

Investigators say Tipton tampered with lottery equipment by installing a self-deleting computer program that would enable him to manipulate the outcome of the Dec. 29, 2010, Hot Lotto drawing. As an employee of a lottery vendor, Tipton was prohibited by law from playing Iowa Lottery games.

Authorities grew suspicious that something with the jackpot was amiss after attempts where made to collect the prize by corporations or people whose stories did not check out. The ticket was traced to Tipton with the help of store surveillance.

Tipton, who is appealing his conviction, has since been linked to rigged lotteries in other states and faces an additional felony charge, of money laundering.

Lottery executive Rich said law enforcement and lottery officials have taken 'actions necessary to ensure the integrity and security of lottery games today.”

But Dawson's attorneys say the Multi-State Lottery had lax security at the time and should be held accountable. Moreover, they said, Dawson, a financial planner, 'in no way should he be seen as greedy” for filing the claim - that he used his winnings to grow his business and support charitable causes.

His suit, filed in Polk County District Court, asks for a jury trial.