Lottery probes shouldn't shake players' faith, officials say

| Sunday, Jan. 3, 2016, 9:00 p.m.

Despite allegations that a former Midwest lottery executive rigged games in five states so he and associates could cash in, Americans' most popular form of gambling remains a safe and fair bet, state and national officials say.

“I think everyone would agree that the processes and procedures that are used to conduct these games, wherever they are, have been examined and the games are safe and secure everywhere,” says Jeff Anderson, director of the Idaho Lottery and president of the Multi-State Lottery board of directors.

Says Pennsylvania Lottery spokesman Alan Zieglar: “The Pennsylvania Lottery has developed high-standard protocols, which are modeled by lotteries across the United States and around the globe. By aggressively protecting the integrity of drawings, players are assured the fair outcome they expect and deserve.”

Lottery players throughout the country can be forgiven for having their doubts because of the investigation involving Eddie Tipton, former security chief of Multi-State Lotteries, operator of Powerball, Mega Millions and five other games. Multi-State is owned and operated by lotteries of 37 states and territories, including Pennsylvania and West Virginia.

In September, Tipton was sentenced to 10 years in prison for his conviction in Iowa on fraud charges for rigging a 2010 Hot Lotto game offering a $14.3 million prize. Prosecutors say he programmed the winning numbers in advance into a Multi-State Lotteries computer and later bought a ticket specifying those numbers. Lawyers tried to cash the winning ticket on behalf of a trust, but Iowa requires that lottery winners be identified, and the prize was not awarded.

Tipton is free on bond while the conviction is appealed. Prosecutors say they have linked Tipton and associates to winning tickets sold for other games in Kansas, Colorado, Oklahoma and Wisconsin. The Des Moines Register reported Dec. 28 that the scandal led Multi-State to strip Charles Strutt of his duties as executive director. Strutt had held the post since the association's founding in 1987.

The allegations against Tipton involve games that use a random number generator to pick winning combinations. RNGs are workhorses in traditional and online casinos, used in slot machines, automated card shufflers and drawings involving virtual entry tickets.

“Any time a game is based on an RNG, there is that doubt” about honesty, says Eliot Jacobson, gaming consultant and former owner of Certified Fair Gaming, which evaluated games worldwide on behalf of casinos, players, regulators and game developers. He now operates Jacobson Gaming and apheat.net, a web forum devoted to advantage play and beatable table games and casino promotions.

“When you have stories about cheating online software or lottery issues like this, it does undermine confidence, which is already shaky,” Jacobson says.

In 1981, Pennsylvania Lottery announcer Nick Perry, a Pittsburgh native, was convicted of weighting selected balls in the “Triple Six Fix” scheme involving several associates and a $1.2 million payout. In the 1990s, computer programmer and Nevada Gaming Control Board employee Ronald Dale Harris was arrested in New Jersey for fraudulently winning $100,000 on a keno game and charged in Nevada with rigging slot machines.

Jacobson says the key to regaining players' trust is holding the criminals accountable.

“This is white-collar crime, and this type of crime tends not to get punished as severely as the guy who sells crack cocaine for $20. It's hard to regain trust when these guys are so wealthy to put on stellar defenses and get off with a slap.”

Anderson tells Player's Advantage that the RNGs previously used at Multi-State Lottery have been replaced and the new ones thoroughly vetted. The Powerball and Mega Millions games do not use an RNG to pick numbers.

“People can have faith in (Multi-State Lottery) games,” he says.

Zieglar says the Pennsylvania Lottery uses a RNG for the midday and second-chance drawings, and the RNGs are not used by any other state or organization. “The RNG used in Pennsylvania is different than the one used by Tipton and is independently certified on a regular basis,” he says. Other safeguards include camera monitoring, certifications, software with PIN safeguards and independent auditors.

“Our mission is to benefit seniors,” he says. “If we don't have trust from players, then we cannot achieve (our) goals.”

Mark Gruetze is the Tribune-Review's gambling columnist. Reach him at players@tribweb.com.

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