On October 9, the Multi-State Lottery Association informed its directors it would pay Webster City, Iowa resident Larry Dawson $1.5 million as a “full and final settlement” of his claims that a $9 million jackpot he won in 2011 would have been larger if the previous jackpot had not been rigged by an insider.
Multi-State Lottery Association Executive Director J. Bret Toyne said the group admitted no wrongdoing in the settlement, which contained a confidentiality provision. MUSL’s mediators and insurance carrier negotiated the settlement with Dawson’s attorneys. A trial had been scheduled for later this month in Des Moines.
Dawson, a financial adviser won a $9 million Hot Lotto jackpot in 2011 and claimed the $6 million pre-tax cash payout. Later he learned the game’s previous $16.5 million jackpot had been rigged by MUSL’s former Information Security Director Eddie Tipton.
Using an exclusive code, Tipton was able to him narrow the drawing’s winning odds from 5 million to 1 to 200 to 1. Over time, it allowed him to hijack at least five winning drawings totaling more than $24 million in prizes in Colorado, Wisconsin, Iowa, Kansas and Oklahoma—the biggest lottery scam in U.S. history. Tipton was sentenced to 25 years in prison.
Dawson originally sought $10 million, alleging the money from the previous prize should have carried over to the prize he won.
