Precisely three years ago, the Iowa Lottery’s then-Vice President of Security Steve Bogle made a “strong recommendation” to Lottery Chief Executive Officer Terry Rich that the lottery should suspend sales of the Hot Lotto, Pick 3, Pick 4 and All or Nothing games because an audit indicated a lack of security and oversight. However, the Iowa Lottery kept marketing the four games to the public.
Bogle wrote, “We cannot allow the citizens of Iowa to continue playing these games.” He said sales should resume only after the lottery could assure customers “they are being conducted using security protocol best practices and with the highest level of integrity.”
Rich rejected Bogle’s recommendation to halt sales of the four games after speaking with the author of an audit of the Multi-State Lottery Association,
which built the random number generators that picked combinations for the four games. The audit author said there were potential vulnerabilities but no evidence that they were being exploited at that time, said Lottery spokeswoman Mary Neubauer.
By then, the association’s former Security Director Eddie Tipton had been fired and all machines built by him had been removed from, she said. He was convicted on lottery fraud charges for allegedly rigging a $16.5 million Hot Lotto drawing for which he purchased the winning ticket and tried to have associates claim the prize. Later Tipton was linked to rigged jackpots worth millions of dollars between 2005 and 2011 and sentenced to prison.
The four games accounted for $24.2 million in ticket sales in Iowa during fiscal year 2016, according to a Lottery report.
The Lottery and the association have refused to release any information about the audit, claiming that would jeopardize security. However, recently Judge Karen Romano ordered the Lottery to release Bogle’s memo following the Des Moines Register‘s request to unseal it. The newspaper made the request as part of an ongoing lawsuit filed by a former Hot Lotto winner, “Lucky” Larry Dawson, who alleges his jackpot would have been millions of dollars larger if Tipton hadn’t rigged the previous drawing.
