DISTRICT COURT, DENVER COUNTY,

COLORADO
1437 Bannock St.
Denver, Colorado 80202

Plaintiff: AMIR MASSIHZADEH,

vs. COURT USE ONLY

Case Number:
Defendants: LAURA SOLANO, in her official capacity
as Colorado Lottery Director, and;
COLORADO STATE LOTTERY
DIVISION, an agency of the State of
Colorado.
Div.:
Co-Counsel for Plaintiff Amir Massihzadeh:
Ctrm:
Thomas M. Rogers, III, Atty. Reg. #28809
Conor A. Flanigan, Atty. Reg. #48748
Lewis Roca Rothgerber Christie LLP
One Tabor Center, Suite 3000
1200 Seventeenth Street
Denver, Colorado 80202
Tel: 303.623.9000
Fax: 303.623.9222
E-Mail: trogers@lrrc.com
cflanigan@lrrc.com

Robert R. Duncan, Atty. Reg. #5733

The Law Office of Robert R. Duncan, LLC
3900 E. Mexico Avenue, Suite 300
Denver, CO 80210
T: 720.606.6793
rduncan@rrd-llc.com
COMPLAINT AND JURY DEMAND

Plaintiff Amir Massihzadeh (Mr. Massihzadeh), through his undersigned counsel,

submits the following Complaint against Defendants Laura Solano, in her official capacity as
Colorado Lottery Director, and the Colorado State Lottery Division (together, the Colorado
Lottery or the Lottery), and states:

102007498_4
 INTRODUCTORY STATEMENT

For years, along with many of other Coloradans, Amir Massihzadeh played Colorado
Lottery games. He would often buy a few tickets and hope for the best. All he expected in return
for his money was that the Lottery would pay as agreed if he should be so fortunate as to win.

When Mr. Massihzadeh checked his quick pick ticket against the winning numbers for
the November 23, 2005 Colorado LOTTO drawing he was shocked and thrilled to see that he
was a winner! His ticket matched all six winning numbers. Within a few days, Mr. Massihzadeh
collected one-third of the jackpot (a lump sum payment of $568,990 after tax withholding). The
other two-thirds went to the holders of the two other tickets that had matched all six numbers.
The numbers on these two tickets were selected by the players, as contrasted to the computer in
the case of Mr. Massihzadehs quick pick.

Ten years later, in October 2015, Mr. Massihzadeh received a visit from agents of the
Colorado Bureau of Investigation. They explained that the two other claimants for the 2005
jackpot he shared in may have been part of a criminal conspiracy to cheat the Lottery system.

Those agents were right: in June 2017, the former Director of Information Security at the
Multi-State Lottery Association (MUSL), Eddie Tipton, and his brother, Tommy Tipton, plead
guilty to various criminal charges stemming from Eddies manipulation of the computer
programs used to choose the winning numbers for lottery games in several states. The Lottery
contracts with MUSL for computers and software used to draw the winning numbers for
Colorado Lottery games, including the LOTTO. After manipulating the lottery computers, Eddie
and Tommy then conspired with others to buy winning lottery tickets and collect the resulting
winnings, including two-thirds of the proceeds from the November 23, 2005 Colorado LOTTO
drawing. As part of their plea agreements, the Tipton brothers agreed to repay every penny the
Colorado Lottery paid on the two tickets purchased using the winning numbers Eddie Tipton
supplied.

It is well-settled law that by purchasing a lottery ticket, one enters into a contract with the
lottery agency. Here, Mr. Massihzadeh entered into a contract with the Colorado Lottery when
he bought a ticket for the November 23, 2005 Colorado LOTTO drawing. He held up his end of
the bargain by paying for his ticket. The Colorado Lottery, however, has failed to hold up its end.

Because the two other tickets were procured through the Tiptons criminal conspiracy,
the claims for two-thirds of the prize based on those tickets are invalid and Mr. Massihzadeh is
the only legitimate winner. Mr. Massihzadeh is entitled to the other two-thirds of the prize for
that drawing. Despite this fact, and even though the Tiptons have agreed to repay the money they
received from the Lottery, the Lottery has refused to honor its obligation to Mr. Massihzadeh.
The Colorado Lotterys failure to pay him his full due breached their contract and necessitated
this lawsuit.

102007498_4 2
 PARTIES

1. Plaintiff Amir Massihzadeh is a Colorado citizen residing at 5886 Flagstaff Road,

Boulder, CO 80302.

2. Defendant Colorado State Lottery Division is an agency of the State of Colorado

within the Colorado Department of Revenue headquartered at 225 N. Main Street, Pueblo, CO
81003.

3. Defendant Laura Solano is a Colorado citizen who currently serves as Director of

the Colorado Lottery at 225 N. Main Street, Pueblo, CO 81003.1

JURISDICTION AND VENUE

4. This Court has personal and subject matter jurisdiction pursuant to C.R.S.
13-1-124 and COLO. CONST. art. VI, 9 because the Lottery transacted business within this
state.

5. Venue is proper in this Court pursuant to C.R.C.P. 98(b)(2) because this is a suit
against public officials for acts done or failure to perform acts in public office and the acts which
gave rise to Mr. Massihzadehs cause of action occurred in Denver County, Colorado. See
Executive Dir., Colorado Dep't of Corr. v. Dist. Court for Boulder Cty., 923 P.2d 885, 887
(Colo. 1996); 7 Utes Corp. v. Dist. Court In & For Eighth Judicial Dist. (Jackson Cty.), 702
P.2d 262, 266 (Colo. 1985).

6. All conditions precedent to the maintenance of this action have been performed or
have occurred.

GENERAL ALLEGATIONS

The Colorado Lottery

7. The Colorado General Assembly is authorized to establish a state-supervised

lottery under the Colorado Constitution, section 2 of article XVIII.

8. Pursuant to this grant of authority, the General Assembly created the Colorado
State Lottery Division within the Colorado Department of Revenue under C.R.S. 24-35-
202(1)(a).

1
On information and belief, Defendant Solano was not employed as Lottery Director in 2005 during the events
alleged herein. On information and belief, the individual who served as Lottery Director at that time is no longer an
employee of the Colorado Lottery and no longer serves in an official capacity as Lottery Director. Accordingly,
Defendant Solano has been named as that individuals successor in her official capacity as the current Lottery
Director. See C.R.C.P. 25(d).

102007498_4 3
 9. The Colorado State Lottery Division is authorized to establish, operate, and
supervise the lottery authorized by section 2 of article XVIII of the state constitution, as
approved by the electors under C.R.S. 24-35-203.

10. Pursuant to Colorado Constitution article XVIII, section 2, the General Assembly
also established the Colorado State Lottery Commission within the Colorado State Lottery
Division under C.R.S. 24-35-207(1), which is authorized to promulgate rules governing the
establishment and operation of the lottery as it deems necessary . . . . under C.R.S. 24-35-
208(1)(a).

The LOTTO

11. Pursuant to its grant of authority, the Colorado State Lottery Commission
promulgated 1 CCR 206-1-10 (Rule 10), which sets forth the basic requirements for all
Colorado Lottery In-State Jackpot Games including sale of tickets, payment of prizes, [and]
method for selecting and validating winning tickets . . . A copy of Rule 10 is attached hereto as
Exhibit 1.

12. According to Rule 10, a Jackpot Game means an individual Lottery game as
described in specific game playing rules that utilizes a computer system to administer plays and
in which a player or the computer system selects a combination of digits, numbers, or symbols.
See Exhibit 1, 10.2(n).

13. For each Jackpot Game, the Colorado Lottery will conduct periodic drawings to
determine the winning combination(s) in accordance with the Specific Game Playing Rules . . .
Id.

14. A Drawing is defined by the Colorado Lotterys Rule 10 as the procedure by

which a random selection process of a winning combination of, but not limited to, digits,
numbers, or symbols, is conducted in accordance with the rules of the game as set forth in the
Specific Game Playing Rules. See Exhibit 1, 10.2(h).

15. A Winning Combination is defined as one or more digits, numbers, or symbols

randomly selected by the Lottery in a drawing that has been certified. See Exhibit 1, 10.2(ee).

16. A Certified Drawing means a drawing that complies with all requirements of
C.R.S. 24-35-208(2)(d). See Exhibit 1, 10.2(f).

17. Under C.R.S. 24-35-208(2)(d), all drawings shall be held in public and
witnessed by an independent auditor employed by a certified public accountant firm, and all
drawing equipment used in such public drawings must be examined prior to and after each public
drawing by an independent auditor employed by a certified public accountant firm.

18. The Colorado Lottery also created Specific Game Playing Rules for the purpose
of governing each individual Jackpot Game. See Exhibit 1, 10.2(aa).

102007498_4 4
 19. One such Jackpot Game is the LOTTO Jackpot Game, the specific rules for
which are established under 1 CCR 206-1-10A (Rule 10A). A copy of Rule 10A is attached
hereto as Exhibit 2.

20. Rule 10A sets forth the basic rules of the LOTTO:

A Lotto player must select six numbers in each play. A winning

play is achieved only when 3, 4, 5, or 6 of the numbers selected by
the player match, in any order, the six winning numbers drawn by
the Lottery.

See Exhibit 2, 10.A.4(A).

21. A player wins the LOTTO First Prize the jackpot where the six numbers on
the players ticket match all six winning numbers. See Exhibit 2, 10.A.5(A).

22. Jackpot winners are provided the option of receiving their share of the Jackpot
through a 25-year annuity, with the initial payment made by the Lottery on the date of claim and
24 additional payments made yearly on the anniversary of the first payment, or in a one-time
lump sum payment equal to fifty percent (50%) of their share of the jackpot amount. See
Exhibit 2, 10.A.6(B).

23. A player may play the LOTTO in four ways: (1) manual, (2) play slip, (3) quick
pick; and (4) partial quick pick. See Exhibit 2, 10.A.4(B).

24. In a manual play, the LOTTO retailer may enter the players selected numbers
via the keyboard on the Jackpot Game terminal. See Exhibit 2, 10.A.4(B)(1).

25. In a quick pick, the LOTTO retailer create[s] ticket(s) using the Jackpot Game
terminal where the play has been created using a random number generator operated by the
Jackpot Game terminal. See Exhibit 2, 10.A.4(B)(3).

26. LOTTO drawings are held as scheduled by the Colorado Lottery Director and as
indicated in the Drawing Guidelines. See Exhibit 2, 10.A.8(A).

27. LOTTO drawings must be conducted by Lottery officials and must comply with
the Colorado Revised Statutes. See Exhibit 2, 10.A.8(B).

28. Pursuant to Rule 10A:

Each drawing shall determine, at random, six winning numbers in

accordance with Drawing Guidelines. Any numbers drawn are not
declared winning numbers until the drawing is certified by the
Lottery . . . . The winning numbers shall be used in determining all

102007498_4 5
 Lotto winners for that drawing. If a drawing is not certified,
another drawing will be conducted to determine actual winners.

See Exhibit 2, 10.A.8(C).

29. The LOTTO Drawing Guidelines set forth the procedure the Lottery must follow
during each LOTTO drawing. A copy of the LOTTO Drawing Guidelines is attached hereto as
Exhibit 3.

30. The LOTTO Drawing Guidelines specify that the winning numbers will be
drawn from a certified computerized automated drawing machine (ADM). See Exhibit 3,
I(D).

31. Rule 10 defines an Automated Draw Machine (ADM) as: the computer
operating the certified random number generator software used to select the Jackpot game
winning combination. See Exhibit 1, 10.2(e).

32. Rule 10 the Colorado Lottery Director shall designate the type of equipment to
be used and shall establish procedures to randomly select the winning combination for each type
of Jackpot game. See Exhibit 1, 10.15(c).

The Colorado Lottery and MUSL

33. MUSL is an Iowa unincorporated non-profit association whose principal place of

business is Polk County, Iowa.

34. MUSL is owned and operated by agreement of its 33-member state lottery
departments, including the Colorado Lottery.

35. One of MUSLs many functions is to provide its member state lottery departments
with the computer software used to draw winning combinations in jackpot games (the Lottery
Software).

36. The Lottery Software is kept centrally at MUSL. When updates to the Lottery
Software are required, MUSL performs the updates and sends the software to the state lottery
departments.

37. The Lottery Software contains two distinct mechanisms for generating random
numbers.

38. The first mechanism is a random number generator that relies on ambient
radiation monitoring to generate a random number once the required amount of unique hits are
observed by the computer.

39. The Lottery Software uses the first mechanism to generate a Seed Number (the
Seed Generator).

102007498_4 6
 40. Once the Lottery Software has generated the Seed Number, it then utilizes the
second mechanism to select the winning combination for a given drawing based in part on that
Seed Number.

Eddie Tiptons Scheme To Predict the Winning Numbers

41. At all times relevant to this Complaint, Eddie Tipton served as MUSLs Director
of Information Security in Polk County, Iowa.

42. As part of his responsibilities as MUSLs Director of Information Security, Eddie

Tipton was one of only a handful of individuals who had access to the Lottery Software.

43. In or about 2005, Eddie Tipton installed additional source code onto the Lottery
Software that included an extra routine (the Additional Code).

44. The Additional Code worked by replacing the Lottery Softwares Seed Generator
with a different Seed Number generation algorithm.

45. The Additional Codes Seed Number generation algorithm was designed in such a
way that it would only operate on certain specific dates (the Target Dates). On those dates on
which it did not operate, the Additional Code laid dormant, and the Lottery Software functioned
as normal.

46. On the Target Dates, the Additional Code determined the value of the Seed
Number by utilizing the sum of the number of characters in the name of the computer running
the Lottery Software and the ASCII value of those characters, the day of the year, and the year.

47. On the Target Dates, the Additional Code enabled Eddie Tipton to predict the
Seed Number generated by the Lottery Software.

48. With this knowledge of the Seed Number, Eddie Tipton was able to predict the
likely winning combinations for drawings on the Target Dates (the Target Combinations).

49. In or about late 2005, Eddie Tipton ran the Additional Code for the Target Date of
a November 23, 2005 Colorado LOTTO Drawing, and recorded the Target Combinations by
hand on a notepad.

50. Subsequently, Eddie Tipton gave the notepad pages containing the Target
Combinations to his brother, Tommy Tipton, of Flatonia, Texas.

51. Eddie Tipton told Tommy Tipton to play the Target Combinations in the
November 23, 2005 Colorado Lottery LOTTO Drawing.

52. Tommy Tipton traveled to Colorado with the notepad, and purchased Colorado
Lottery LOTTO manual play tickets containing the Target Combinations for the November 23,
2005 LOTTO Drawing.

102007498_4 7
 53. At or about this time, Tommy Tipton supplied, intentionally or otherwise, the
Target Combinations to a third party who then used those Target Combinations to purchase
Colorado Lottery LOTTO manual play tickets containing the Target Combinations for the
November 23, 2005 LOTTO Drawing.

The November 23, 2005 Colorado LOTTO Drawing

54. On November 23, 2005, the Colorado Lottery held a drawing for an
approximately $4.8 million LOTTO Jackpot prize (the November Drawing). The details of the
Drawing, including the winning combination, are set forth in Exhibit 4 hereto.

55. On November 23, 2005, MUSLs Lottery Software was used to draw the winning
combination for the November Drawing.

56. On November 23, 2005, MUSLs Lottery Software selected a Seed Number for
the November Drawing using Eddie Tiptons Additional Code.

57. Although the Seed Number was predictable to Eddie Tipton, the Seed Number
was unpredictable and unknowable to all other legitimate LOTTO players.

58. The Colorado Lottery Director certified the results of the November Drawing.

59. Three tickets match all six digits of the winning combination for the November
Drawing.

Mr. Massihzadehs Winning Ticket and the Target Tickets

60. Shortly before the November Drawing, Mr. Massihzadeh purchased a quick pick
ticket for the November Drawing of the Colorado Lotterys LOTTO Jackpot Game (the
Winning Ticket).

61. Mr. Massihzadehs Winning Ticket contained all six digits of the winning
combination for the November Drawing.

62. Mr. Massihzadeh redeemed the Winning Ticket on or about November 28, 2005
at the Colorado Lotterys Denver office located at 720 S. Colorado Blvd, Suite 110A, Denver,
CO 80246.

63. Pursuant to Rule 10A, Mr. Massihzadeh chose to collect his winnings as a lump
sum in the amount of approximately $801,393 ($568,990 after tax withholdings).

64. Mr. Massihzadehs Winning Ticket was the first of the three tickets with the
winning combination of numbers to be redeemed.

102007498_4 8
 65. The winning combination selected by the Lottery Software for the November
Drawing also matched one of the Target Combinations on a LOTTO ticket purchased by Tommy
Tipton (the First Target Ticket).

66. Unlike Mr. Massihzadehs Winning Ticket, a quick pick ticket, Tommy Tiptons
First Target Ticket was a manual play ticket.

67. Tommy Tipton did not redeem the First Target Ticket himself. Instead, Tommy
Tipton gave the First Target Ticket to his friend, Alexander Hicks, of Montgomery, Texas, for
the purpose of claiming a portion of the November Drawings winnings. See Exhibit 5.

68. Alexander Hicks redeemed the First Target Ticket with the Colorado Lottery, and
collected $801,393 ($568,990 after tax withholdings) from the Lottery in a lump-sum payment.
See Exhibit 5.

69. The winning combination selected by the Lottery Software for the November
drawing also matched all six digits on a second LOTTO manual play ticket purchased by an
unknown individual (the Second Target Ticket), using numbers generated by Eddie Tipton,
supplied to him/her/it directly or indirectly by Tommy Tipton.

70. The unknown individual who purchased the Second Target Ticket did not redeem
the Second Target Ticket himself/herself/itself. Instead, the Second Target Ticket was redeemed
by Cuestion de Suerte, LLC, a Nevada limited liability company based in Las Vegas, Nevada,
which was formed on or about December 12, 2005. See Exhibit 5.

71. Cuestion de Suerte, LLC redeemed the Second Target Ticket with the Colorado
Lottery, and collected $801,393 ($568,990 after tax withholdings) from the Lottery in a lump-
sum payment. See Exhibit 5.

Eddie Tiptons Scheme Exposed

72. In or about 2011-2012, the Iowa Lottery began an investigation of Eddie Tipton
and the circumstances surrounding an Iowa Lottery $16.5 million winning Hot Lotto ticket
purchased in December 2010.

73. On January 14, 2015, Eddie Tipton was charged in an Iowa District Court by the
Iowa Attorney Generals Office with attempting to influence the winning of a prize through
fraud or deception, and intending to fraudulently redeem a lottery ticket. See Polk County Iowa
Complaint & Affidavit dated January 14, 2015 attached as Exhibit 6 hereto (the First
Complaint). Eddie Tipton was convicted on both counts and sentenced to two consecutive five-
year terms in prison.

74. On October 7, 2015, a second Complaint & Affidavit (the Second Complaint)
was filed against Eddie Tipton in an Iowa District Court by the Iowa Attorney Generals Office,
attached hereto as Exhibit 7. The Second Complaint alleged that Eddie Tipton was involved in

102007498_4 9
an on-going criminal enterprise to influence the winning of lottery prizes in various other
lotteries, including the Colorado Lotterys November 23, 2005 November Drawing, by
tampering with MUSLs Lottery Software. See Exhibit 7.

75. On or about October 12, 2015, Mr. Massihzadeh was contacted by and spoke with
two Colorado Bureau of Investigation (CBI) agents, Agent-In-Charge Ralph Gagliardi and
Agent Jeff Schierkolk.

76. During this conversation, Agents Gagliardi and Schierkolk interviewed Mr.
Massihzadeh regarding the November Drawing and the Winning Ticket. Agents Gagliardi and
Schierkolk told Mr. Massihzadeh that he was a victim of a criminal scheme to rig the lottery,
and that he may be a witness going forward.

77. On March 30, 2016, a third Complaint and Affidavit (the Third Complaint) was
filed against Tommy Tipton in the Iowa District Court for Polk County, Iowa, by the Iowa
Attorney Generals Office, attached hereto as Exhibit 8. The Third Complaint alleged that
Tommy Tipton committed unlawful acts by aiding and abetting thefts for financial gain with
respect to various lotteries, including the Colorado Lotterys November 23, 2005 November
Drawing. See Exhibit 8.

78. On June 12, 2017, Eddie Tipton plead guilty to one count of Ongoing Criminal
Conduct in Iowa, and one count of Theft by Fraud and one count of Computer Crime in
Wisconsin, and Tommy Tipton plead guilty to two counts of Conspiracy to Commit Theft in
Iowa, thereby resolving the charges brought against Eddie Tipton in the Second Complaint and
the charges brought against Tommy Tipton in the Third Complaint (the Tipton Guilty Plea). A
copy of the Tipton Guilty Plea is attached hereto as Exhibit 9.

79. Pursuant to the terms of the Tipton Guilty Plea, the State of Colorado agreed that
it would not pursue criminal charges against Eddie Tipton and Tommy Tipton for any violations
of Colorado law stemming from the November Drawing. See Exhibit 9.

80. As part of the Tipton Guilty Plea, Eddie Tipton agreed to pay the Colorado
Lottery restitution in the amount of $568,990 individually, as well as an additional $568,990
jointly and severally with Tommy Tipton, totaling $1,137,980; the combined amount paid out by
the Colorado Lottery for the First and Second Target Tickets.

81. As part of the Tipton Guilty Plea, Tommy Tipton agreed to pay the Colorado
Lottery restitution in the amount of $568,990, jointly and severally with Eddie Tipton, the
amount paid out by the Colorado Lottery for each of the Target Tickets.

82. On June 22, the Colorado Attorney Generals Office issued a press release
entitled: AG Coffman Announces Guilty Plea of Man Who Stole Millions in Multi-State
Lottery Fraud Case (the Colorado Press Release). A copy of the Colorado Press Release is
attached hereto as Exhibit 10.

102007498_4 10
 83. According to the Colorado Press Release: [i]n 2015 the Colorado Lottery was
informed by officials from Iowa that a 2005 Colorado winning lottery drawing involving Tommy
Tipton, the brother of Eddie Tipton, and another man, Alexander Hicks, may have been part of a
larger multi-state lottery fraud scheme which included rigging the system to steal from
Colorado. See Exhibit 10.

84. The Colorado Press Release further states:

After conducting an initial investigation, the Colorado Lottery and

the Colorado Bureau of Investigation developed evidence
indicating that two manual draw tickets from a November 23,
2005 drawing were suspicious. The first of these two suspicious
tickets had been purchased in Colorado on November 21, 2005 . . .
and the second purchased November 22, 2005 . . . with specifically
selected numbers being manually chosen by the respective
purchasers instead of the quick pick option being used. Evidence
was ultimately acquired showing Tommy Tipton bought one of the
two winning Colorado tickets . . . then solicited Alexander Hicks
to claim the winning funds in Colorado in exchange for Hicks
receiving 10% of the proceeds. The second suspicious winning
ticket was claimed by a newly formed Nevada LLC whose
registered agent was also a Texas resident.

See Exhibit 10 (emphasis added).

The Lottery Agreement and the Colorado Lotterys Breach

85. By offering LOTTO tickets for sale in advance of the November Drawing, the
Colorado Lottery made a public offer that any purchaser of a LOTTO ticket, including Mr.
Massihzadeh, would have a chance of winning a prize according to the advertised rules and
procedures of the Lottery and the LOTTO game specifically.

86. In purchasing the Winning Ticket, Mr. Massihzadeh accepted the Lotterys public
offer and agreed to the announced rules, including Rule 10, Rule 10A, and the Drawing
Guidelines, for determining LOTTO prize winners (the Lottery Agreement).

87. Mr. Massihzadeh fully performed all obligations under the Lottery Agreement in
redeeming the Winning Ticket at the Colorado Lotterys Denver office located at 720 S.
Colorado Blvd., Suite 110A, Denver, CO 80246 on November 28, 2005.

88. The November Drawing was a valid drawing under all applicable Colorado
Lottery rules, regulations, and statutes.

89. Mr. Massihzadeh was a legitimate, eligible winner of the November Drawing.

102007498_4 11
 90. Despite Mr. Massihzadehs complete performance, the Lottery, acting through the
Colorado Lottery Director, failed to satisfy its obligations under the Lottery Agreement by
paying a portion of the November Drawing Winnings, rightfully owed to Mr. Massihzadeh, to
two ineligible claimants.

91. The Colorado Lottery, acting through the Colorado Lottery Director, breached the
terms of the Lottery Agreement by paying $801,393 ($568,990 after tax withholdings) of
November Drawing Winnings owed to Mr. Massihzadeh to Alexander Hicks, an ineligible
claimant.

92. This amount was improperly paid to Alexander Hicks, and will be or has been
recovered by the Colorado Lottery via the Tipton Guilty Plea.

93. The Colorado Lottery, acting through the Colorado Lottery Director, breached the
terms of the Lottery Agreement by paying $801,393 ($568,990 after tax withholdings) of
November Drawing Winnings owed to Mr. Massihzadeh to Cuestion de Suerte, LLC, an
ineligible claimant.

94. This amount was improperly paid to Cuestion de Suerte, LLC, and will be or has
been recovered by the Colorado Lottery via the Tipton Guilty Plea.

95. Pursuant to the terms of the Lottery Agreement, Mr. Massihzadeh was entitled to
the complete November Drawing Winnings in the amount of approximately $4.8 million, or
approximately $2.4 million in the lump-sum payment he selected.

96. The complete November Drawing Winnings have not been paid to Mr.
Massihzadeh, in breach of the Lottery Agreement, despite his demands for payment.

97. As a result of the Colorado Lotterys breach, Mr. Massihzadeh sustained damages
in the amount of at least $1,602,786, constituting the lump-sum payment of the November
Drawing Winnings wrongfully withheld from Mr. Massihzadeh.

FIRST CLAIM FOR RELIEF

(Breach of Contract Against All Defendants)

98. Mr. Massihzadeh re-alleges the allegations of the preceding paragraphs as if fully
set forth herein.

99. Mr. Massihzadeh and the Lottery entered into a binding contract, as evidenced by
the Lottery Agreement.

100. Mr. Massihzadeh fully performed pursuant to the terms of the Lottery Agreement
by purchasing the Winning Ticket and redeeming the Winning Ticket at the Colorado Lotterys
Denver office located at 720 S. Colorado Blvd, Suite 110A, Denver, CO 80246 on November 28,
2005.

102007498_4 12
 101. Despite Mr. Massihzadehs full performance, the Lottery, acting through the
Colorado Lottery Director, breached its obligations under the Lottery Agreement by failing to
pay Mr. Massihzadeh the full prize amount of the November Drawing Jackpot Winnings owed to
him.

102. Mr. Massihzadeh was the only legitimate, eligible winner of the November
Drawing.

103. As a result of the Lotterys breach, the full prize amount of the November
Drawing Jackpot Winnings has not been paid to Mr. Massihzadeh.

104. The Lotterys breach has caused Mr. Massihzadeh damages in the amount of at
least $1,602,786.

105. Pursuant to C.R.S. 5-12-102, Mr. Massihzadeh is entitled to prejudgment

interest on any damages awarded, calculated from the date the November Drawing Jackpot
Winnings were wrongfully withheld, on or about November 28, 2005. See Goodyear Tire &
Rubber Co. v. Holmes, 193 P.3d 821, 827-828 (Colo. 2008).

JURY DEMAND

Mr. Massihzadeh hereby demands a jury on all claims so triable.

WHEREFORE, Plaintiff Amir Massihzadeh respectfully requests the Court enter

judgment in his favor against Defendants Laura Solano, in her official capacity as Colorado
Lottery Director, and the Colorado State Lottery Division, including pre- and post-judgment
interest, and requests any such additional relief that the Court deems just and proper.

102007498_4 13
 Respectfully Submitted: October 4, 2017.

LEWIS ROCA ROTHGERBER CHRISTIE LLP

s/ Thomas M. Rogers III

Thomas M. Rogers III
Conor A. Flanigan

Co-Counsel for Plaintiff Amir Massihzadeh

THE LAW OFFICE OF ROBERT R. DUNCAN,

LLC

s/ Robert R. Duncan
Robert R. Duncan

Co-Counsel for Plaintiff Amir Massihzadeh

Plaintiffs Address:
5886 Flagstaff Road
Boulder, CO 80302

102007498_4 14
 DEPARTMENT OF REVENUE

Lottery Commission
1 CCR 206-1 RULES AND REGULATIONS

AMENDED RULE 10 - IN-STATE JACKPOT GAME LOTTERY GAMES

Amended Rule 10 General Rules and regulations

BASIS AND PURPOSE OF AMENDED AND RESTATED RULE 10

The purpose for Amended Rule 10 is to provide details and requirements for all Colorado Lottery In-State
Jackpot games such as the sale of tickets, payment of prizes, method for selecting and validating winning
tickets, as well as to establish the amount of commission for the licensee. The statutory basis for
Amended Rule 10 is found in C.R.S. 24-35-201(5), 24-35-208(1)(a) and (2), and 24-35-212.

10.1 Commission to Adopt Specific Rules and Regulations for In-State Jackpot Lottery Games.

In-State Jackpot Lottery games are authorized to be conducted under the following Rules and
Regulations and such further instructions and directives as the Director may issue in furtherance thereof.
For the purposes of this Amended Rule 10 Jackpot Game shall mean In-State Jackpot Lottery Games.

To the extent not inconsistent with such specific Rules and Regulations as may be adopted, the following
general provisions under this Amended Rule 10 shall apply to each Lottery Jackpot game conducted.

10.2 Definitions

In addition to the definitions provided in Paragraph 1.2 of Rule 1, and unless the context in these Rules
and Regulations otherwise requires:

a. Additional Lottery Prizes may include cash, merchandise, and/or services as determined by the
Director.

b. Advance Play means the ability to purchase tickets for more than one consecutive draw with the
first draw in the purchase being the current open draw.

c. Aggregate Limit means the maximum prize liability established for each drawing for a specified
matching combination.

d. Aggregate Prize Fund means the maximum percentage of sales for each Jackpot Lottery game
approved by the Lottery Commission that may be used to pay prizes in the game.

e. Automated Draw Machine (ADM) means the computer operating the certified random number
generator software used to select the Jackpot game winning combination.

f. Certified Drawing means a drawing which complies with all requirements of C.R.S. 24-35-
208(2)(d).

g. Draw Break means the period of time sales activity is suppressed and during which no Jackpot
Game tickets may be sold, purchased or validated for the suppressed game(s).
h. Drawing means the procedure by which a random selection process of a winning combination
of, but not limited to, digits, numbers or symbols, is conducted in accordance with the rules of the
game as set forth in Specific Game Playing Rules.

i. Drawing Guidelines means the document that outlines the procedure and eligibility requirements
for game or promotional drawing.

j. Drawing Sales Period means the period of time between ticket sales activation (during which
Jackpot Game tickets may be sold, purchased or validated) and the draw break.

k. Duplicate Ticket means a ticket produced by any unauthorized method.

l. Force Majeure means an unexpected event (i.e. a natural disaster) that prevents the scheduled
completion of an activity..m.

m. Indirect Prize Category Contribution means the difference between the Aggregate Prize Fund
and actual prize expense that the Director, at his discretion, ay authorize to be used to increase
prizes or pay additional prizes.

n. Jackpot Game means an individual Lottery game as described in specific game playing rules
that utilizes a computer system to administer plays and in which a player or the computer system
selects a combination of digits, numbers, or symbols. The Lottery will conduct periodic drawings
to determine the winning combination(s) in accordance with the Specific Game Playing Rules for
each Jackpot game.

o. Jackpot Game Licensee means a Lottery Licensee authorized by the Lottery to sell Jackpot
Game tickets. Jackpot Game Licensees shall sell all Lottery games including, but not limited to,
instant game tickets offered by the Lottery.

p. Jackpot Game System means the computer system(s) consisting of Retailer terminals, central
processing equipment, and a communication network utilized to conduct Jackpot games.

q. Net Sales means gross sales less cancellations.

r. Retailer Terminal means the computer hardware through which Jackpot Game tickets are
generated.

s. Jackpot Game Ticket means a computer-generated ticket issued by an Jackpot Game Licensee
to a player as a receipt for the combination of digits, numbers, or symbols selected. That ticket
shall be the only acceptable evidence of the combination of digits, numbers, or symbols selected.
Jackpot Game tickets may be purchased only from Jackpot Game Licensees.

t. Player-Selected Item means a number or item or group of numbers or items selected by a

player in connection with an Jackpot game. The number or group of numbers can be selected
by a player using a Play Slip or on the behalf of the player by the Licensee manually using the
Jackpot Game terminal.

u. Prize Amounts means the amount of money payable in each prize category to each share or the
annuitized future value of each share in a prize category for each drawing.

v. Prize Category means the matching combinations as described in Specific Game Playing Rules.

w. Prize Expense means the accrued portion of net sales from all Lottery products that has been
paid or obligated for the payment of prizes.
x. Prize Expense Minimum refers to C.R.S. 24-35-210 (9) and means the total amount of prize
expense must be a minimum of fifty percent (50%) of the annual aggregate net Lottery ticket
sales from all games, including instant, Jackpot Game and multi-state games.

y. Quick Pick means a number or item or group of numbers or items random selected by the
Jackpot Game vendor system in connection with an Jackpot game.

z. Shares means the total number of matching combinations within each prize category as
determined for each draw.

aa. Specific Game Playing Rules means the rules that are promulgated to govern separate Jackpot
games and shall include, as though set forth verbatim, the term Specific Game Playing Rules
that are incorporated by reference as though fully set forth herein.

bb. Ticket Bearer means the person who has signed the Jackpot Game ticket or who has
possession of an unsigned ticket.

cc. Validation means the process of determining whether an Jackpot Game ticket presented for
payment is a winning ticket.

dd. Validation Number means the number printed on the front of each Jackpot Game ticket that is
used for validation.

ee. Winning Combination means one or more digits, numbers, or symbols randomly selected by the
Lottery in a drawing that has been certified.

10.3 Sale of Tickets

a. Licensees shall make Lottery Jackpot Game tickets available for sale to the public between the
hours of 4:30 a.m. and 11:59 p.m. Monday through Saturday and 8:00 a.m. and 11:59 p.m.
Sunday if those hours are included in the licensees normal business hours and if the Jackpot
Game system is available.

b. A licensee shall sell Lottery Jackpot Game tickets only at the premises specified in the license.

c. All retail Jackpot Game ticket sales are final and the return of a Lottery Jackpot Game ticket after
sale shall not be accepted by the licensee, unless otherwise directed by the Director or as set
forth in Paragraph 10.9 and Paragraph 10.17.d. or as may be set forth in Specific Game Playing
Rules.

d. The Division itself may sell Lottery Jackpot Game tickets.

e. Notwithstanding any provision contained in these Rules and Regulations to the contrary, a
licensee may be permitted, upon prior approval of the Director or his/her designee, to make gifts
of Lottery tickets as a means of promoting the sale of goods and services to the public.

10.4 Payment of Prizes

a. The holder of a winning Jackpot Game ticket in the amount of $150.00 or less may take the ticket
to any licensee location during the licensees normal business hours for validation and payment.
The holder of a winning Jackpot Game ticket in the amount of $151.00 to $599.00 may take the
ticket to any licensee location during the licensees normal business hours where licensees have
the option of validating the ticket. All prizes shall be paid by the licensee upon presentation and
validation of the ticket pursuant to instructions on the back of the Jackpot Game ticket and/or
pursuant to instructions specified in the Game Guideline.
b. Any winning Jackpot Game ticket in any amount may be mailed or presented to a Lottery claims
center for payment. The prizes shall be paid by the Lottery upon presentation and validation of
the ticket pursuant to instructions on the back of the Jackpot Game ticket and/or pursuant to
instructions specified in the game Guideline.

c. The holder of a prize-winning ticket of $600.00 or more shall complete all of the information
detailed on the Colorado Lottery claim form and submit the completed form and ticket by mail or
in person to the Lottery. The Colorado Lottery shall pay the prize to the owner of the ticket upon
validation.

1. A prizewinner, or a prizewinners legally authorized representative, shall sign the winning

Jackpot Game ticket and complete a claim form that is available from any licensee,
Lottery Claim Center or the Colorado Lottery website. The claim form shall incorporate
the following information:

i. Verification that the prizewinner is not a person disqualified by law or by these

Rules and Regulations to claim or otherwise accept a prize from the Lottery;

ii. Notification that the prizewinners name, city of residence and prize amount are
public information. This same notification is given to one signing on behalf of a
Jackpot Game ticket owner under a disability that prevents the prizewinner from
signing in his/her own behalf;

iii. The Lottery is not liable for any loss caused by a misrepresentation by the
Jackpot Game ticket owner or the person claiming the prize on the winners
behalf.

2. The claim form may contain any other provision that the Lottery Director may deem
necessary and proper to promote the public interest and trust or security and efficient
operation of the Lottery.

3. Payment for a winning ticket will not occur unless all of the requirements on the claim
form and winning ticket have been met or an acknowledgement that the information is
unknown or unavailable. There is no obligation or duty of the Lottery, its employees or
licensees, to make any inquiry of the truthfulness of information that appears on the claim
form before payment to the claimant.

d. Payment of prizes shall be made to the claimant in person or by mail to the address provided by
the claimant.

e. All prizes shall be paid within a reasonable time after they are awarded and after the claims are
validated by the Lottery. Any prize requiring annuitized or installment payments shall be paid as
specified in the Game Guideline.

f. The Lottery Director may delay any payment in order to review a change of circumstances
relative to the prize awarded, the payee, the claim, or any other matter that may have come to
their attention. All delayed payments will be paid to date immediately upon the Lottery Directors
confirmation that the payee is entitled to such payment; any remaining payments shall be paid
per the Game Guideline.

g. The Lottery Directors decision shall be final and binding upon all participants in the game with
respect to the payment of all prizes.

h. The Lottery Director reserves the right to require a claimant to disclose the location or person
from whom the claimant purchased the ticket.
i. Payment of any prize shall be made to the owner of the Jackpot Game ticket or their designee. All
liability of the State, its officers and employees, and the Commission shall terminate upon
payment.

j. In the event that a claim is filed on behalf of a legal entity other than the owner of the ticket for a
prize payable for life, the legal entity shall designate an officer or director of that legal entity as the
person on whose life such prize is to be paid and shall execute an agreement evidencing such
designation. The specific requirements for payment will be detailed in the Game Guideline and/or
Specific Drawing Guidelines.

k. In the event that the intercept program reveals an outstanding obligation for a winner of a prize,
the prize will not be awarded until the intercept obligation is paid as set forth in 24-35-212(5) and
24-35-212.5.

10.5 Redemption of Bar-Coded Coupons

The Director, at his discretion, may from time to time deem it proper to authorize the use of bar-coded
coupons to promote Lottery products. In the event such use is authorized by the Director, Licensees shall
comply with all requirements and restrictions specified on the coupon and shall redeem and exchange
bar-coded coupons for Lottery tickets only and not for cash.

10.6 Use of Coupons, Lottery Bucks, and Free Tickets

a. Coupons, Lottery Bucks and free tickets (hereafter referred to as coupons) are marketing tools
used by the Lottery for promotions.

b. All coupons, when used for promotions, must be given to the consumer or public. In the event
the Lottery uses a promotional partner to distribute coupons, the promotional partner must ensure
all coupons are issued to the consumer or public and any unused coupons are returned to the
Lottery.

c. At no time may coupons be sold, used to purchase goods or services, pay off Lottery debts or
reimburse a Licensee(s) for any loss.

d. At no time may a co-promoter, who has received a cash payment from the Lottery or a Lottery
contractor as part of a promotional agreement, use the cash payment to purchase Lottery tickets
for the promotion that the payment funded.

10.7 Payment of Prizes Upon the Death of the Prize Winner

Under no circumstances will the payment of a prize requiring annuitized or installment payments be
accelerated before its normal date of payments because of the death of the prize winner. All prizes, or
any portion thereof, that shall remain payable at the time of death of the prize winner shall be paid to the
estate of such deceased prize winner (in accordance with the last will and testament of the deceased
prize winner), unless the Director is directed otherwise pursuant to an appropriate judicial order. If the
deceased prize winner died intestate, the payment will be made in accordance with the laws of descent
and distribution of intestate property of the jurisdiction of domicile of the deceased prize winner, unless
the Director is directed otherwise pursuant to an appropriate judicial order. Upon payment as provided by
this Rule, the Division shall be discharged of any further liability.

10.8 Ownership of Tickets

a. Until such time as the Jackpot Game ticket is signed in the area designated, a Lottery Jackpot
Game ticket shall be a bearer instrument, owned by the physical possessor of such ticket.
b. The Director shall only recognize as the true owner of a winning Lottery Jackpot Game ticket the
person whose signature appears upon the ticket in the area designated for said purpose.

c. Jackpot Game tickets are bearer instruments; therefore, ownership of the ticket is established
once a signature is placed on the back of the ticket where indicated. If ownership is questioned,
the Division may make payment based upon information submitted to it on an affidavit proving
ownership.

d. In the event there is an inconsistency in the information submitted on a claim form and as shown
on the winning Jackpot Game ticket, the Director shall make an investigation and withhold all
winnings awarded to the ticket owner or holder until such time as the Director is satisfied that the
proper person is being paid.

e. The Director shall recognize only one (1) person as claimant on an Jackpot Game ticket. A claim
may be made in the name of an organization only if the organization possesses a Federal
Employer Identification Number (FEIN) issued by the Internal Revenue Service and such number
is shown on the claim form. Groups, family units, clubs, or organizations without an FEIN shall
designate one individual in whose name the claim is to be filed. If a claim is erroneously entered
with multiple claimants, the claimants shall designate one of them as the individual recipient of
the prize, or, if they fail to designate an individual recipient, the Director may designate any one of
the claimants as the sole recipient. In either case, the claim shall then be considered as if it were
originally entered in the name of the designated individual and payment of any prizes won shall
be made to that single individual. Once an Jackpot Game ticket is validated, it will not be
returned to the winner, but remains the property of the Lottery.

10.9 Mutilated or Erroneous Tickets

Unless the Director is satisfied that a mutilated Lottery Jackpot Game ticket is genuine, no credit will be
issued to the holder of said ticket. If the Jackpot Game ticket is mutilated at the time of purchase, it must
be returned to the licensee by the ticket holder within one (1) hour of purchase provided that the licensee
is open, the Jackpot Game system is available for wagering and the Jackpot Game system has not
converted to the next drawing period. In the event that the ticket cannot be cancelled at the terminal, the
ticket must be submitted to the Lottery for investigation to determine if credit should be issued. A ticket
submitted to the Lottery by the licensee for credit becomes the property of the Lottery, is invalid and
ineligible for a prize. All credits for tickets must be approved by the Lottery Director or designee.

10.10 Lost or Stolen Tickets

The Director reserves the right to hold any prize, pending the findings of an investigation, when the
Jackpot Game ticket presented for validation has been reported stolen or lost. At the Directors
discretion, Jackpot Game tickets that are determined to be stolen will not be paid.

10.11 Purchasers Obligations

In purchasing an Jackpot Game ticket, the purchaser agrees to comply with all provisions of the 24-35-
201, C.R.S., et seq, these Rules and Regulations, all final decisions of the Director, and all instructions
and directives established by the Director for the conduct of Jackpot games.

10.12 Persons Ineligible to Purchase Tickets

a. No person under the age of eighteen (18) may purchase Lottery Jackpot Game tickets.

b. No Jackpot Game ticket shall be purchased by and no prize shall be paid to any of the following:

1. Any member of the Commission;

 2. Any employee of the Division, except when authorized by the Director for investigative
purposes. But, in no event shall such employee be entitled to payment of any prize;

3. Any officer, director, or employee of any supplier of Colorado Lottery Jackpot Game ticket
materials or equipment, or the subcontractors thereof that have participated, in any
manner, in the supplying of Colorado Lottery Jackpot Game ticket materials or
equipment, except when authorized by the Director for investigative purposes. But, in no
event shall any of such persons be entitled to payment of any prize;

4. Any vendor precluded by its contract with the Lottery;

5. Any member of the immediate family of 1., 2., 3. and 4. above.

c. No person who operates drawing equipment during a drawing or officially witnesses a drawing,
and no member of the persons immediate family, shall purchase a ticket or receive a prize for the
drawing in which said person operates drawing equipment or witnesses a drawing.

d. For the purposes of this Rule, immediate family shall include any spouse, child, brother, sister,
and/or parent residing in the same household of any of the persons specified in Paragraph
10.12.b.

10.13 Licensee Commission, Cashing Bonus and Marketing Performance Bonus

a. Each licensee shall be entitled to receive a commission of six percent (6%) of sales from Jackpot
Game tickets lawfully sold or disbursed by said licensee.

b. Each licensee shall be entitled to receive a cashing bonus of one percent (1%) of each prize paid
by the licensee up to and including $599.

c. A Marketing Performance Bonus up to five-tenths of one percent (0.5%) may be earned by

licensees that meet the criteria set forth by the Lottery Director or their designee.

d. The requirements of the marketing performance bonus plan to be met by licensees shall be
established by the Lottery Director or his/her designee on an annual basis.

e. In order to receive a marketing performance bonus, each licensee must meet the following
criteria:

1. A licensee must be licensed on the date the marketing performance bonus is declared;

2. A licensee must sell Jackpot Game tickets up to and including the final sales day in which
the marketing performance bonus is declared;

3. A licensee must meet or exceed the requirements of the marketing performance bonus
plan for the period for which the marketing performance bonus is declared.

f. In the event there is a residual resulting from the accrual of the one percent (1%) cashing bonus
(10.13.b) and/or the five-tenths of one percent (.5%) marketing bonus (10.13.c) have been
expensed, the Lottery Director may provide additional compensation to licensees as described in
10.13.c or may revert the excess amount thereby decreasing the bonus expense.

10.14 Price of Tickets and Prizes

a. The purchase price of each ticket for Colorado Lottery Jackpot Games shall be set per the Game
Guideline. The licensee may be permitted to make gifts of Jackpot Game tickets as a means of
 promoting the sale of goods or services to the public upon receipt of prior approval by the Lottery
Director.

b. The prize amounts or total amount of prize money allocated to the prize categories for Jackpot
games shall be set forth in Specific Game Playing Rules.

In the event the prize expense is less than the Lottery Commission approved Aggregate Prize
Fund for a specific game, the Director, in his discretion, may authorize the difference to be used
to increase Lottery prize amounts or pay additional prizes for that game.

10.15 Drawings and End of Sales Prior To Drawings

a. Drawings shall be conducted at a location and on days and at times indicated in the individual
game drawing guidelines. Drawing results are not official until verified.

b. The Director shall determine for each type of Jackpot game the draw break or time for the end of
sales prior to the drawings. Jackpot Game Terminals will not process orders for Jackpot Game
tickets for that drawing after the time established by the Director.

c. The Director shall designate the type of equipment to be used and shall establish procedures to
randomly select the winning combination for each type of Jackpot game.

10.16 Number and Size of Prizes

The number and sizes of Jackpot Game cash and non-cash-winning prizes shall be as set forth in the
specific game rule and/or specific game drawing guidelines.

10.17 Validation Requirements

a. To be a valid winning Jackpot Game ticket, all of the following conditions must be met:

1. All printing on the ticket shall be present in its entirety, be legible, and correspond, using
the computer validation file, to the combination and date printed on the ticket.

2. The ticket shall be intact.

3. The ticket shall not be mutilated, altered, or tampered with in any manner.

4. The ticket shall not be counterfeit or an exact duplicate of another winning ticket.

5. The ticket must have been issued by an authorized Jackpot Game Licensee in an
authorized manner.

6. The ticket must not have been stolen.

7. The ticket must not have been canceled or previously paid.

8. The ticket shall pass all other confidential security checks of the Lottery.

b. Any ticket failing any validation requirement listed in subsection 10.17.a is invalid and ineligible
for a prize. If a court of competent jurisdiction determines that a claim based on a ticket that has
failed to validate solely because of subsection 10.17.a. 7. of this section is valid, the claim shall
be paid as a prize pursuant to Section 10.4 and Specific Game Playing Rules. The Licensee that
canceled or paid such ticket shall indemnify the Lottery for payment of the prize and shall also
indemnify the Lottery from any other claim, suit, or action based on that ticket.
c. The Director may require the payment of the prize for a ticket that is partially mutilated or is not
intact if the Jackpot Game ticket can still be validated by other validation methods and
requirements.

d. In the event a defective Jackpot Game ticket is purchased, the only responsibility or liability of the
Lottery or the Jackpot Game Licensee shall be the replacement of the defective Jackpot Game
ticket with another Jackpot Game ticket (or a ticket of equivalent sales price from any other
current Lottery game).

10.18 Assignment of Prizes

a. The winner of an annuitized or installment payment prize in any Jackpot game being paid in
annuitized or installment payments who desires to assign the right to unpaid future annuitized or
installment payments must comply with C.R.S. 24-35-212(1)(b) and (1.5). Pursuant to C.R.S. 24-
35-212 (1.5)(f), reasonable fees to defray administrative expenses shall be reviewed and
approved by the Colorado Lottery Director on an annual basis.

b. Payment of a prize upon death of a prize winner will not be accelerated before its normal date of
payments due to the death of the prizewinner. The remaining portion of the prize shall be paid to
the estate in accordance with the last will and testament of the deceased prizewinner, unless
overruled by a court of law. If the prizewinner dies without a will, the payment will be made in
accordance with the applicable state laws of the deceased prizewinner, unless overruled by a
court of law. Once payment is made in accordance with this rule the Lottery will hold no further
liability.
 DEPARTMENT OF REVENUE

Lottery Commission
1 CCR 206-1 RULES AND REGULATIONS

AMENDED RULE 10.A - COLORADO LOTTERY JACKPOT GAME LOTTO

BASIS AND PURPOSE FOR AMENDED RULE 10.A

The purpose of Amended Rule 10.A is to provide specific game details and requirements for the Colorado
Lottery Jackpot Game LOTTO such as type of play, prizes, method of selecting winning numbers,
drawings, and the allocation of revenues. The statutory basis for Rule 10.A is found in C.R.S. 24-35-208
(1) (a) and (2), 24-35-212 and 24-35-212.5.

10.A.1

A Colorado Lottery Jackpot game to be known as Lotto is authorized to be conducted by the Director
under the following Rules and Regulations and under such further instructions and directives as the
Director may issue in furtherance thereof. If a conflict arises between Rule 10 and this Amended Rule
10.A, Amended Rule 10.A shall apply.

10.A.2 Definitions

In addition to the definitions provided in Paragraph 1.2 of Rule 1 and Rule 10, and unless the context in
this Amended Rule 10.A otherwise requires:

A. Base contribution means an amount contributed to the Jackpot prize category in order to fund
the initial drawing.

B. Board means a field of the 42 numbers found on the play slip.

C. Direct Prize Category Contribution means a percentage of net sales allocated to the prize
categories as described in Paragraph 10.A.5.c.

D. Indirect Prize Category Contribution means a discretionary contribution authorized by the

Director allocated to the prize categories as described in Paragraph 10.A.5.c. However, the total
discretionary indirect prize category contributions shall not allow the game to pay out more than
an additional 5.0% of sales in prizes in any single fiscal year. Unclaimed prizes will not be
considered in this calculation.

E. "Jackpot Prize" means a pari-mutuel prize that is advertised to be paid with per-winner annuities
or as a lump sum cash payment, unless otherwise specified by the Lottery.

F. Jackpot Game Shares means the total number of matching combinations within each prize
category as determined for each drawing.

G. Number means any play integer from 1 through 42 inclusive.

H. Play means the six numbers selected on each Board and printed on the ticket.

I. Play slip means a mark-sense game card used by players of Lotto to select plays. There shall
be ten game grids, or boards, on each play slip identified as A, B, C, D, E, F, G, H, I, and J. A
 play slip has no pecuniary value and shall not constitute evidence of ticket purchase or of
numbers selected.

J. Roll-over means the amount from the direct prize category contribution from previous drawing(s)
in the first prize (Jackpot) category that is carried forward to the first prize category (Jackpot) for
the next drawing.

10.A.3 Price of Lotto Ticket

The price of each Lotto play shall be $1.00 but may be adjusted at the Director, or designees, discretion.

10.A.4 Play for Lotto

A. Type of play:

A Lotto player must select six numbers in each play. A winning play is achieved only when 3, 4,
5, or 6 of the numbers selected by the player match, in any order, the six winning numbers drawn
by the Lottery.

B. Method of play:

1. Manual The Jackpot Game retailer may enter the players selected numbers via the
keyboard on the Jackpot Game terminal.

2. Play Slip - The player may use an original play slip provided by the Lottery to make
number selections. The Jackpot Game terminal will read the play slip and issue a ticket
with corresponding plays.

a. Facsimiles of play slips, copies of play slips, or other materials that have not
been printed or approved by the Lottery shall not be used to enter a play.

b. No device shall be connected to a Jackpot Game terminal to enter plays, except

as may be approved by the Lottery.

c. Unapproved play slips or other devices may be seized by the Lottery.

d. The play slip must be marked by hand. Machine-printed play slips used to enter
plays must be approved by the Director. Unapproved machine-printed play slips
may be seized by the Lottery.

e. Nothing in this regulation shall be deemed to prevent a person with a physical

disability who would otherwise be unable to mark a play slip manually from using
any device intended to permit such person to make such a mark (for his/her sole
personal use or benefit).

3. Quick Pick The Jackpot Game retailer can create ticket(s) using the Jackpot Game
terminal where the play has been created using a random number generator operated by
the Jackpot Game terminal.

4. Partial Quick Pick - A player may leave a portion of his/her play selections to a random
number generator operated by the Jackpot Game terminal. The partial quick pick option
can be used with a play slip or manual entry by the retailer.

10.A.5 Prizes For Lotto

A. The prize amounts for each drawing paid to each Lotto player who selects a matching
combination of numbers will vary due to a pari-mutuel calculation. The prize amounts are based
on the total amount in the prize category for that Lotto drawing distributed equally over the
number of matching combinations in each prize category.

MATCHING PRIZE ODDS OF

COMBINATIONS CATEGORY WINNING
(ONE PLAY)

All six matching First Prize 1: 5,245,785

numbers in one play (Jackpot)

Any five but not six Second 1: 24,286

matching numbers in Prize
one play

Any four but not five Third 1:555

or six matching Prize
numbers in one play

Any three but not Fourth 1: 36

four, five, or six Prize
matching numbers in
one play

B. The projected aggregate prizes as a percentage of sales for Lotto is Fifty-two and Seven-tenths
Percent (52.7%). This projection does not include unclaimed prizes.

C. Prize Categories

1. First Prize (Jackpot) The Jackpot will start each time at an annuitized future value of at
least $1 million for the first drawing after it is won. The total prize category contribution
for a drawing may include the following:

a. A direct prize category contribution of twenty-five percent (25%) of net sales for
the drawing, which may be adjusted as authorized by the director.

b. A base contribution of $500,000. The Lotto base contribution may be adjusted

as authorized by the Director if increased sales warrant a higher starting jackpot.

c. A roll-over contribution as defined in Paragraph 10.A.2.j of this Rule 10.A.

d. An indirect prize category contribution authorized by the Director.

2. Second Prize The second prize category may include the following:

a. A direct prize category contribution of two percent (2%) of the net sales for the
drawing.

b. An indirect prize category contribution as authorized by the Director.

A prize amount shall be calculated by dividing the prize category contribution by the
number of shares for the prize category. A share is the matching combination, in one
play, of any five of the six numbers drawn (in any sequence).
 3. Third Prize The third prize category may include the following:

a. A direct prize category contribution of seven and one-half percent (7.5%) of the
net sales for the drawing.

b. An indirect prize category contribution as authorized by the Director.

A prize amount shall be calculated by dividing the prize category contributions by the
number of shares for the prize category. A share is the matching combination, in one
play, of any four of the six numbers drawn (in any sequence).

4. Fourth Prize The fourth prize category may include the following:

a. A direct prize category contribution of ten percent (10%) of the net sales for the
drawing.

b. An indirect prize category contribution as authorized by the Director.

A prize amount shall be calculated by dividing the prize category contributions by the
number of shares for the prize category. A share is the matching combination, in one
play, of any three of the six numbers drawn (in any sequence).

5. Additional Lottery Prizes may be awarded as authorized by the Director from the Indirect
Prize Category contribution.

6. All prize amounts will be rounded down to the nearest dollar except that no prize amount
shall be less than one dollar ($1).

10.A.6 Payment of Prizes

A. The holder of a winning ticket may win only one prize per play in connection with the winning
numbers drawn and shall be entitled only to the highest prize category won by those numbers.

B. Players will be given the option of receiving their share of the first prize (Jackpot) over a period of
25 years through a fixed progressive 25-year annuity with the initial payment made by the Lottery
on the date of claim and 24 additional payments made yearly on the anniversary of the first
payment, or a one-time lump sum payment equal to fifty percent (50%) of their share of the
annuitized jackpot amount.

C. The annuitized future value of the first (Jackpot) prize category shall be twice the cash value of
the total Jackpot prize category contribution as defined in Paragraph 10.A.5.c.1.

D. To determine the annuitized future value of each jackpot share (prize amount), the annuitized
future value of the prize category is divided by the shares. A share is the matching combination,
in one play, of all six numbers drawn (in any sequence).

E. If the annuitized future value of each jackpot share (prize amount) results in an initial or first
payment of ten thousand dollars ($10,000) or more and the annuity option has been selected, the
prize amount shall be a fixed progressive 25-year annuity. The initial annuity payment shall be
paid by the Lottery at the time of claim and be 2.5% of the future value of the annuity. Each
subsequent annual payment (#2 through #25) shall increase by 3.7% of the previous annual
payment.

F. Players who select the annuitized payment shall have the ability to change their prize payment
selection from annuitized payment to lump sum payment for up to ninety days from the original
 date of claim. This period may be extended at the discretion of the Director or the Directors
designee. If a player chooses the lump sum payment after the initial annuitized payment is made
to the player by the Lottery, the player will receive the remaining amount of the original cash
value prize, less taxes, in a single second payment.

G. If the annuitized future value of each jackpot share (prize amount) results in an initial or first
payment of less than ten thousand dollars ($10,000) the annuity option will not be allowed and
the prize amount will be paid in one payment.

10.A.7 Ticket Purchases

A. Lotto tickets may be purchased only from a Lottery retailer authorized by the Director to sell
Jackpot Game tickets.

B. Lotto tickets shall show, at a minimum, the numbers selected, the boards played, drawing date
and validation and reference numbers.

C. The Lottery shall not directly and knowingly sell a combination of tickets to any person or entity
that would guarantee such purchaser a win.

D. A player may cancel a ticket and receive a refund of the purchase price for any draw provided the
following criteria are met:

1. The legible ticket is returned to the Jackpot Game retailer from whom the player
purchased;

2. It is returned within one (1) hour of purchase;

3. The retailer is open;

4. The Jackpot Game system is available for wagering; and

5. The Jackpot Game system has not converted to the next drawing period.

10.A.8 Drawings

A. The Lotto drawings shall be held as scheduled by the Director and as indicated in the Drawing
Guidelines. In the event of an act of Force Majeure the drawing shall be rescheduled at the
Directors, or the Directors designee, discretion.

B. The drawings will be conducted by Lottery officials and comply with Colorado Revised Statutes.

C. Each drawing shall determine, at random, six winning numbers in accordance with Drawing
Guidelines. Any numbers drawn are not declared winning numbers until the drawing is certified
by the Lottery in accordance with paragraph 10.A.8d. The winning numbers shall be used in
determining all Lotto winners for that drawing. If a drawing is not certified, another drawing will be
conducted to determine actual winners.

D. The drawing shall not be invalidated based on the liability of the Lottery.

10.A.9 Advance Play

Advance play provides the opportunity to purchase Lotto tickets for more than one drawing. Advance
play tickets shall be available for purchase in variable increments. The Advance Play feature shall be
available at the discretion of the Lottery Director.
10.A.10 Licensee Commission

A. In addition to the six percent (6%) Commission set forth in Paragraph 10.14 of Rule 10, the
Director may provide such additional compensation to the licensees as is deemed appropriate by
the Director to further the sale of Lotto tickets, so long as such additional compensation is made
equally available to all licensees and does not exceed a total of seven-tenths of one percent
(0.7%) of the total amount received by the Division from all Lotto tickets sold or disbursed as of
the date the Director determines to provide such additional compensation. The seven-tenths of
one percent (0.7%) described above shall consist of the following:

1. Two-tenths of one percent (0.2%) of sales from Lotto tickets lawfully sold or disbursed by
a Jackpot Game retailer shall be accrued to pay Jackpot Game retailers a one percent
(1%) cashing bonus for each Lotto prize redeemed by retailers up to and including
$599.99.

2. Up to one-half of one percent (0.5%) of sales from Lotto tickets lawfully sold or disbursed
by a Jackpot Game retailer shall be accrued to pay Jackpot Game retailers a marketing
performance bonus.

B. In order to receive the marketing performance bonus, each Jackpot Game retailer must meet the
following criteria:

1. A retailer must be a licensed retailer on the date the marketing performance bonus is
declared;

2. A retailer must meet or exceed the requirements of the Marketing Performance Bonus
Plan for the period for which the marketing performance bonus is declared; and

3. The requirements of the Marketing Performance Bonus Plan to be met by Jackpot Game
retailers shall be established by the Lottery Director or his/her designee.

C. In the event there is a residual resulting from the accrual of the seven-tenths of one percent
(0.7%) of sales after the bonuses described in 10.A.10.a.1 and 2 have been expensed, the
Director may provide additional compensation to licensees as described in 10.A.10.a or may
revert the excess amount thereby decreasing the bonus expense.
LOTTO - PAST WINNING NUMBERS :: COLORADO LOTTERY Page 1 of 2

Espaol MyLottery / Login / 2nd Chance Drawings / Retailer Locator GO

GAMES PLAY GIVING BACK ABOUT WINNERS

LOTTO
POWERBALL
MEGA MILLIONS Lotto Past Winning Numbers
LOTTO
IT'S EASY TO PLAY February 2016 go Click "go" to see winning numbers for selected month.
CLAIM WINNINGS
PAST WINNING NUMBERS Lotto Drawing Archive
GAME TOOLS
CASH 5 Draw Last Day To Winning Jackpot Jackpot Cash Jackpot
Date Claim Numbers Amount Value Winners
PICK 3
SCRATCH 11/23/2005 05/22/2006 12- 15- 18- 29- 38- 41 $4,808,358 $2,404,179 3
Click Column Headers to sort or hold shift while clicking column headers to sort by multiple columns
Check My Numbers
Save Customize Print Download

11/23/05 Lotto drawing

Match Winners Amount

6 of 6 3 $4,800,000

5 of 6 18 $497

4 of 6 692 $48

3 of 6 11329 $3
(--) not available
Print payout and odds tables

Get Alerts For detailed reports for our drawing games, check out the Game Tools
Sign up for MyLottery and receive alerts section!
for winning numbers, jackpot amounts,
Scratch games, current promotions and
much more.

Go!

Become a Retailer Media Center Protect Yourself

https://www.coloradolottery.com/GAMES/LOTTO/PAST-WINNING-NUMBERS/drawing... 2/9/2016
LOTTO - PAST WINNING NUMBERS :: COLORADO LOTTERY Page 2 of 2

Connect: Retailer Resources FY14 Annual Report Contact Us

All Content Copyright 2015 Colorado Lottery. All rights reserved
Play Responsibly Privacy Policy

Colorado Lottery
Free App. Worth Millions. Download the Jackpot Mobile App
LEARN MORE

https://www.coloradolottery.com/GAMES/LOTTO/PAST-WINNING-NUMBERS/drawing... 2/9/2016
 http://www.coloradolottery.com/games/number_archive.cfm?drawingID=10771&view=lotto
Go FEB MAR

8captures 17
17Mar0615May08 2005 2006

Home Powerball Lotto Cash5 ScratchGames AbouttheLottery MyLottery FAQs ContactUs

Powerball LottoWinningNumberArchive
Lotto Click"go"toseeallwinningnumbersforselectedmonth:
WinningNumbers March2006 go
PastWinningNumbers
Payouts
Cash
ClaimWinnings Last
Date LottoWinning Jackpot Jackpot Cash Winner's or
PastWinners Dayto
Drawn Numbers Winners Amount Value Info Annuity
HowToPlay Redeem
Option
NumbersFun
Rules Amir
Cash5 Massihzadeh
Denver
ScratchGames $568,990.00

AbouttheLottery Cash
Alexander
MyLottery Hicks
Montgomery,
FAQs TX
11/23/05 5/22/06 121518293841 3 $4,800,000 $2,400,000 Cash
$568,990.00
ContactUs
Cuestion
Search
DeSuerte
Cash
L.L.C.
LasVegas
NV
$568,990.00

()notavailable

Home Powerball Lotto Cash5 ScratchGames AbouttheLottery MyLottery

FAQs ContactUs PhotoGallery Sitemap MediaCenter

PlayResponsibly:CompulsiveGamblingHotline18005224700
19972006TheColoradoLottery.Allrightsreserved.Legal/Disclaimers

PeggyGordon,Director M.MichaelCooke,ExecutiveDirector
E-FILED 2015 JAN 15 11:58 AM POLK - CLERK OF DISTRICT COURT
E-FILED 2015 JAN 15 11:58 AM POLK - CLERK OF DISTRICT COURT
E-FILED 2015 JAN 15 11:58 AM POLK - CLERK OF DISTRICT COURT
 FILED
06-12-2017
CIRCUIT COURT
State v. Eddie Tipton - Dane County Case No. 16-CF-26&&NE COUNTY, Wl

2016CF002604
IN THE IOWA DISTRICT COURT FOR POLK COUNTY

STATE OF IOWA, CRIMINAL NOs. FECR28955J

Plaintiff FECR294192

vs.
MULTI-STATE PLEA AGREEMENT
EDDIE RAYMOND TIPTON,
TOMMY BOYD TIPTON,
Defendants

A plea agreement by and between the States of Colorado, Iowa, Wisconsin and the

Defendants, Eddie Raymond Tipton and Tommy Boyd Tipton, exists as follows:

1. Eddie Tipton's Offenses. Sentences, and Restitution Owed:

a. In Iowa: Eddie Tipton will plead guilty to an Amended Trial Information

containing one count of Ongoing Criminal Conduct (a Class B Felony). The

State will recommend incarceration not to exceed 25 years. Defendant may

recommend any legal sentence he desires. The sentence shall be run

concurrent to Eddie Tipton's sentence in Wisconsin. With regard to the

' convictions pending before the Iowa Supreme Court, if those charges are not

disposed of by being vacated and dismissed, then the State agrees those

convictions will be vacated upon remand and dismissed with prejudice.

b. In Wisconsin: Eddie Tipton will plead guilty to Counts 2 (Theft by Fraud, as

party to a crime) and 3 (Computer Crime) as charged in the criminal

complaint. The remaining counts will be dismissed and read-in for the

purposes of sentencing. The parties will jointly recommend that the court

impose 3-4 years of initial confinement and 5 years of extended supervision

on Count 2, and 1.5 years initial confinement and 2 years extended

{02051435. DOCX}
 supervision on Count 3, to run concurrent to each other and concurrent to

Eddie Tipton's sentence in Iowa. The State of Wisconsin agrees that Eddie

Tipton may serve his Wisconsin sentence in the custody of the Iowa

Department of Corrections where he will receive credit against both sentences

and will provide assistance in facilitating Eddie Tipton's service of his

sentence in Iowa upon entry of his pleas in both states.

c. In Colorado: As part of the terras of this agreement, Colorado will agree not

to charge Eddie Tipton with any violations of Colorado law.

d. Restitution: Eddie Tipton agrees to repay $2,222,863.60 in restitution, with

interest as applied at Iowa's standard statutory rate. It is divided as follows:

i. $1,137,980 for the Colorado Lottery, of that $568,990 joint and several

with Tommy Tipton, and with the remaining $568,990 that is not joint

and several with Tommy Tipton being the last restitution owing and to

be collected under this agreement;

ii. $644,478 for the Oklahoma Lottery, of that $235,105 joint and several

with Tommy Tipton;

iii. $391,500 for the Wisconsin Lottery, and $18,100 to the Wisconsin

Department of Revenue; and

iv. $30,805.60 for the Kansas Lottery, with a confession to a civil

judgment under the Kansas False Claims Act.

2. Tommy Tipton's Offenses. Sentences, and Restitution Owed;

a. In Iowa; Tommy Tipton will plead guilty to a Second Amended Trial

Information containing: Count 1: Conspiracy to Commit Theft in the First

{02051435.DOCX}
 Degree in violation of Iowa Code 706.1. (a Class D Felony); Count 2:

Conspiracy to Commit Theft in the Fourth Degree in violation of Iowa Code

706.1, (a serious misdemeanor). The parties will agree to jointly recommend a

sentence of 75 days incarceration on Tommy Tipton's misdemeanor charge

and a deferred judgment on Tommy Tipton's felony charge. Tommy Tipton's

period of probation on his felony charge shall be served concurrently with his

time of incarceration on the misdemeanor, and upon discharge the

Defendant's record will be expunged. The State of Iowa and Tommy Tipton

agree to use their best efforts to arrange for Tommy Tipton to serve his jail

sentence in Edwards County, Texas. Tommy Tipton shall have no

outstanding limitation upon his ability to use firearms upon completion of the

period of probation. The parties acknowledge that, pursuant to Iowa Rule of

Criminal Procedure 2.10, Tommy Tipton's guilty plea will be conditioned on

the Court's concurrence with the parties' agreement and joint sentencing

recommendation. If the Court rejects the parties' agreement, either party may

withdraw their consent to the plea and this agreement, and all plea discussions

and this agreement shall be inadmissible in this case.

b. In Colorado: As part of the terms of this agreement, Colorado will agree not

to charge Tommy Tipton with any violations of Colorado law.

c. Restitution; As part of the judgment and sentencing order on the

misdemeanor charge, Tommy Tipton agrees to repay restitution in the amount

of $804,095, with interest as applied at Iowa's standard statutory rate, as

follows;

{02051435.DOCX}
 i. $568,990 for the Colorado Lottery, joint and several with Eddie

Tipton;

ii. $235,105 for the Oklahoma Lottery, joint and several with Eddie

Tipton.

3. Restitution Generally: Defendants will pay ail restitution through the Polk County

Clerk of Court, Des Moines, Iowa. The entire Colorado obligation is joint and several with any

other individuals found now or in the tuhire by any particular state to have profited from the

payment of lottery prizes associated with this case. Defendant consents to the execution of the

judgment in this matter against any property in his name or held for him in the name of his

associates or family members. Defendant will also submit proof of source for his restitution

payments.

4. Further Charges or Anneals; The States of Colorado, Iowa and Wisconsin

agree that no further charges will be filed related to or arising out of the investigation of

Defendants' activities. If either Defendant appeals from any conviction or sentence, this deal is

unwound and any State is free to pursue any charges they desire.

5. Cooperation; Defendants agree to provide the States of Colorado, Iowa, and

Wisconsin with a proffer of truthful testimony of all facts related, directly or indirectly, to their

actions to fix, win, and claim lottery jackpots. Nothing said by the Defendants in their proffers

may be used directly or indirectly to bring any further criminal charges against them for any act

related to any lottery or funds obtained from any lottery. Defendants agree to cooperate with any

additional legal actions in any states related to the claiming of lottery jackpots.

6. In Oklahoma. Kansas, and Texas; Each of these States has agreed not to prosecute

{02051435. DOCX}
both Eddie and Tommy Tipton pursuant to letters furnished to the defense attorneys on

September 22,2016 and those letters are deemed effective and applicable to this agreement.

7. No Civil Actions; The restitution amount is agreed by the parties to constitute a

fair resolution of all financial issues or claims that states may have against the Defendants. Thus,

the States of Colorado, Iowa, and Wisconsin agree that they will not pursue any civil,

administrative or collateral action of any kind against Defendants arising out of this matter in

whole or in part.

8. Contingent Nature: The parties acknowledge that this agreement is contingent

upon both Defendants* agreement If no such agreement is reached by one Defendant and

authorities, this agreement is null and void and fully unenforceable by the other Defendant.

9. Voluntary Pleas; Defendants acknowledge that he is entering into this

Agreement and that he is pleading guilty to the offenses set forth above because he is guilty. The

Defendants further acknowledge that he understands the nature of the offenses to which he is

pleading guilty including the penalties imposed by law for such offenses.

10. Waiver of Rights: Defendants acknowledge that he has been informed of and

understands the following:

a. The right to plead not guilty, and persist in that plea;

b. The right to a jury trial;

c. The right to be represented by counsel, and if necessary to have the court

appoint counsel, at trial and at every stage of the proceeding;

d. The right at trial to confront and cross-examine witnesses, to be protected

from compelled self-incrimination, to testify and present evidence and to

compel the attendance of witnesses; .

{02051435.DOCX}
S7S+472 + 4101 M01SE LIBRARY 02:52:J p.m. 05-02-2017

a. Tie Defendant wIU waive these rights if the Court accepts Mi pleas ofguilty.

11. Can tide atjallivt These agreements am strictly confidential and aitall not he

dljnlwed either in this fona or by verbal description publicly prior to any guilty plea proceedings

conducted in court, unless ell parties to the agreement consent In writing to such disclosure,

12. SntiwAgreaiaHti This agreement constitutor the entire agreement between the

parties. No other promises of any Idnd,express or implied, have been made to Induce eny party

to tdilcrlata this a^rtara cot

The undersigned hereby sweptthetams ofthlaPlaa Agreement

. 6-2-17
Date

Ekui Ba#*& . 6-1-n

;MspJyfor Eddie'

Data
ji, Asst. AttorneyOeoenl

fc/V/7
_6ab-SmL_
SWnofrowa ' Date'
By Robert R Saml, Asst. Attorney General

t2n
Stgifi'0fWiS63ttri Date
By David Mens, AssL Attomay General

(020M43S.DOOX}
PRESS RELEASE
June 22, 2017

AG Coffman Announces Guilty Plea of Man who Stole Millions in

Multi-State Lottery Fraud Case

DENVER Today, Attorney General Cynthia H. Coffman announced that Eddie

Raymond Tipton of Flatonia, Texas, has pled guilty to theft by fraud, and computer
crime charges related to his role in defrauding state lotteries in Colorado, Wisconsin
and Iowa. Tipton was prosecuted in Wisconsin, as part of a multi-year, multi-state
fraud case, and faces a total maximum penalty in Wisconsin of 13.5 years of
incarceration.

As part of the multi-state plea agreement Eddie Tipton further agreed to pay
$1,137,980.00 in restitution to Colorado for the ill-gotten gains from his fraud. His
brother, Tommy Tipton, has agreed to pay restitution to Colorado in an amount of
$568,990.00. The Tiptons have also agreed to pay restitution to Oklahoma and
Kansas for similar fraudulent lottery wins.

Mr. Tipton and his cohorts took their criminal activities on the road, defrauding
several states, and rigging the system to steal from Colorado, said Attorney
General Coffman. His devious gamble has finally caught up with him, and he will
now face the consequences for his actions.

In 2015 the Colorado Lottery was informed by officials from Iowa that a 2005
Colorado winning lottery drawing involving Tommy Tipton, the brother of Eddie
Tipton, and another man, Alexander Hicks, may have been part of a larger multi-
state lottery fraud scheme. At the time, Eddie Tipton was being prosecuted in Iowa
for a fraud which targeted Iowas lottery in 2010 with a $16.5 million winning
drawing.

After conducting an initial investigation, The Colorado Lottery and the Colorado
Bureau of Investigation developed evidence indicating that two manual draw
winning tickets from a November 23, 2005 drawing were suspicious. The first of
these two suspicious tickets had been purchased in Colorado on November 21, 2005
in Commerce City and the second purchased on November 22, 2005 in Lamar with
specifically selected numbers being manually chosen by the respective purchasers
instead of the quick pick option being used. Evidence was ultimately acquired
showing that Tommy Tipton bought one of the two winning Colorado tickets in
Lamar and then solicited Alexander Hicks to claim the winning funds in Colorado
in exchange for Hicks receiving 10% of the proceeds. The second suspicious winning
ticket was claimed by a newly formed Nevada LLC whose registered agent was also
a Texas resident. As a result of these findings, Colorado joined the multi-state
investigation.

The Colorado Lottery, a division of the Colorado Department of Revenue, would

like to recognize the Colorado Bureau of Investigation and the Colorado Attorney
Generals Office, the 10th Judicial District Attorneys Office, and their law
enforcement counterparts in Iowa and Wisconsin for ensuring this crime,
perpetrated against the Colorado Lottery game "Lotto more than 11 years ago, will
not go unpunished, said Laura Solano, Colorado Lottery Director. The Colorado
Lottery is committed to ensuring the highest standard of security and integrity of
all lottery games of chance for our players. To ensure Lottery games meet these
high industry standards, the Lottery utilizes Random Number Generators for all in-
State Draw Games, which have been purchased from an independent third party
vendor, and certified by two gaming test labs and forensic auditing firms. For more
information please visit coloradolottery.com/protect-yourself.

During the course of the investigation it was determined that Eddie Tipton, a key
employee of the Iowa based Multi-State Lottery Association (MUSL), was
responsible for programming the software used in the random number generator
(RNG) machines that picked the winning numbers in lotteries such as Colorados.
Wisconsins forensic investigation determined that Tipton programmed a modified
code in the RNG software that, when certain conditions were met, produced a
predictable set of winning numbers that were then used by Eddie Tipton or shared
with other family members or associates, so that manual lottery tickets could be
purchased using these numbers.

The Colorado Lottery headquarters are located in Pueblo, Colorado, and the
Attorney Generals Office worked with the 10th Judicial District Attorneys Office on
this case.

The successful prosecution of this case is the result of the strong collaborative
efforts of all of the agencies involved, said 10th Judicial District Attorney Jeff
Chostner. My office looks forward to continuing to partner with state and local
agencies as we work together to protect Coloradans.
Eddie Tipton is currently scheduled for sentencing in Wisconsin on
September 21, 2017. Eddie Tipton and Tommy Tipton are also expected to
be in court in Iowa on June 29, 2017 for disposition hearings.

# # #

CONTACT
Annie Skinner
Colorado Attorney Generals Office
720-508-6553 or Annie.skinner@coag.gov