General Discussion Triathlon Talk » Kona Lottery Deemed Illegal Rss Feed  
Moderators: k9car363, alicefoeller Reply
2015-05-14 12:21 PM

User image

Elite
3090
20001000252525
Spokane, WA
Subject: Kona Lottery Deemed Illegal

http://www.tampabay.com/news/ironman-ran-illegal-lottery-to-forfeit-28-million/2229441

 

Saw this on the other site and definitely thought this was newsworthy. The Kona lottery has been deemed illegal by the U.S. Attorney's Office.

I've entered a few times, never chosen. I know there have been several BT members picked and shared their experiences here. Will be interesting to see how this plays out. 


Statement from IRONMAN in response to recent DOJ decision. 

"We are proud of the longstanding tradition of the IRONMAN Kona Lottery. Thanks to the vision of IRONMAN Co-founders, John and Judy Collins, the IRONMAN Lottery has changed lives and provided athletes of all abilities the opportunity to participate in the world’s most challenging and iconic one day endurance event, the IRONMAN World Championship in Kailua-Kona, Hawaii. 

The IRONMAN Kona Lottery has operated in a substantially similar manner since 1983. Several months ago, the Tampa office of the U.S. Department of Justice contacted IRONMAN to claim that the IRONMAN Kona Lottery is not compliant with existing lottery and gambling laws. Since that time, we have fully cooperated with the Department of Justice through a series of meetings and correspondences. As a result of our cooperation, the Department of Justice and IRONMAN have come to an agreement to no longer operate the Kona Lottery in its current form. While we do not agree with U.S. Department of Justice’s interpretation of the relevant statutes or that there has been anything untoward or inappropriate in our operation of the IRONMAN Kona Lottery, IRONMAN chose to settle so that we can focus on our priorities – our athletes and our events. 

Our 2015 winners of the IRONMAN Kona Lottery are unaffected by this agreement and their slots will be honored. 

We continue to believe in the Collins’ vision for making the IRONMAN World Championship accessible to athletes of all abilities and plan to announce new plans later this year. 
 



2015-05-14 12:52 PM
in reply to: zed707

User image

Master
3916
20001000500100100100100
Toronto
Bronze member
Subject: RE: Kona Lottery Deemed Illegal

I saw this last night in a different article and was curious about how the Kona lottery was different than the marathon lotteries such as New York - i guess it's all about the amount? That is not clear.  I ended the NYC Marathon lottery a few years ago and it was only about $15 or so for the lottery process - is that basically an administrative fee? Because that race also has qualifiers 

This article is interesting though because they have two qualifiers who are against it because it's for the elite but for me as someone who will probably never qualify having a few lottery spots is a great way to keep more average age groupers interested and at least have a hope of getting there. I think it would be worth salvaging in some way - even with a few spots.  Because it stands to reason with more Ironman events world wide that only the very few will ever get to line up at Kona and ultimately Ironman is Age Grouper event

OR they can get the equal pro slots for women ... another can of worms

 

2015-05-14 12:53 PM
in reply to: juniperjen

User image


928
50010010010010025
Subject: RE: Kona Lottery Deemed Illegal
Originally posted by juniperjen
I saw this last night in a different article and was curious about how the Kona lottery was different than the marathon lotteries such as New York - i guess it's all about the amount? That is not clear.  I ended the NYC Marathon lottery a few years ago and it was only about $15 or so for the lottery process - is that basically an administrative fee?

The difference is WTC is a private company whereas races like NY Marathon are run by non-profits. The lottery fee that NY Marathon charges is much smaller and just a "processing fee" (which I guess they have to justify with their accountants as how much it costs to administer the lottery) and not intended to earn money, as the WTC's is ($50/lottery entry).

I'm not sure what marathons like Chicago or Houston charge for their lotteries (if at all) but I assume it's more like what NY does.
2015-05-14 2:20 PM
in reply to: zed707

Member
587
500252525
Subject: RE: Kona Lottery Deemed Illegal
I am not sure it was actually deemed illegal. They settled but there was not an actually finding of guilt or illegal activity. The government alleged the law was broken but Ironman was not technically found guilty.
2015-05-14 2:35 PM
in reply to: 5stones

User image

Champion
6992
50001000500100100100100252525
Chicago, Illinois
Subject: RE: Kona Lottery Deemed Illegal
Chicago's lottery is free I believe. Not actually had to use it yet to know for sure.
2015-05-14 2:53 PM
in reply to: 0

Veteran
379
100100100252525
Subject: RE: Kona Lottery Deemed Illegal
Originally posted by jennifer_runs

Originally posted by juniperjen
I saw this last night in a different article and was curious about how the Kona lottery was different than the marathon lotteries such as New York - i guess it's all about the amount? That is not clear.  I ended the NYC Marathon lottery a few years ago and it was only about $15 or so for the lottery process - is that basically an administrative fee?

The difference is WTC is a private company whereas races like NY Marathon are run by non-profits. The lottery fee that NY Marathon charges is much smaller and just a "processing fee" (which I guess they have to justify with their accountants as how much it costs to administer the lottery) and not intended to earn money, as the WTC's is ($50/lottery entry).

I'm not sure what marathons like Chicago or Houston charge for their lotteries (if at all) but I assume it's more like what NY does.


I read the complaint and the forfeiture agreement. The non-profit and amount charged have nothing to do with it. The Ironman lottery was deemed illegal because Florida law, (statute 849.09) and Florida Constitution (Art. 10 sect. 7) prohibit gambling. It was gambling as you paid money and weren't necessarily getting anything in return.

Comparing Ironman lottery to Houston or New York is irrelevant - what killed Ironman was its headquarters is in Florida, which prohibits the lottery.


The interesting thing reading the legal filings, they had exact numbers for each year. Last year nearly 14,254 people entered to win one of 100 slots, and of those 6,889 bought the "passport" membership that gave them a second chance. So if you were a first time entrant and only bought the one $50 slot, your chances were 1 in 200. In truth, the odds aren't bad, enter multiple years, even better. Too bad they put the kibosh on the system.

Ironman forfeited $1.72 million in proceeds from the lottery. Over the last three years the lottery profit was $654,410; $911,600; and $1,057,150 - decent profit.



Edited by sheesleeva 2015-05-14 3:02 PM


2015-05-14 3:06 PM
in reply to: sheesleeva

User image

Master
3916
20001000500100100100100
Toronto
Bronze member
Subject: RE: Kona Lottery Deemed Illegal

Originally posted by sheesleeva
Originally posted by jennifer_runs
Originally posted by juniperjen I saw this last night in a different article and was curious about how the Kona lottery was different than the marathon lotteries such as New York - i guess it's all about the amount? That is not clear.  I ended the NYC Marathon lottery a few years ago and it was only about $15 or so for the lottery process - is that basically an administrative fee?
The difference is WTC is a private company whereas races like NY Marathon are run by non-profits. The lottery fee that NY Marathon charges is much smaller and just a "processing fee" (which I guess they have to justify with their accountants as how much it costs to administer the lottery) and not intended to earn money, as the WTC's is ($50/lottery entry). I'm not sure what marathons like Chicago or Houston charge for their lotteries (if at all) but I assume it's more like what NY does.
I read the complaint and the forfeiture agreement. The non-profit and amount charged have nothing to do with it. The Ironman lottery was deemed illegal because Florida law, (statute 849.09) and Florida Constitution (Art. 10 sect. 7) prohibit gambling. It was gambling as you paid money and weren't necessarily getting anything in return. Comparing Ironman lottery to Houston or New York is irrelevant - what killed Ironman was its headquarters is in Florida, which prohibits the lottery. The interesting thing reading the legal filings, they had exact numbers for each year. Last year nearly 14,254 people entered to win one of 100 slots, and of those 6,889 bought the "passport" membership that gave them a second chance. So if you were a first time entrant and only bought the one $50 slot, your chances were 1 in 200. In truth, the odds aren't bad, enter multiple years, even better. Too bad they put the kibosh on the system. Ironman forfeited $1.72 million in proceeds from the lottery. Over the last three years the lottery profit was $654,410; $911,600; and $1,057,150 - decent profit.

Thanks for the clarification - this helps. 

And very interesting

2015-05-14 3:07 PM
in reply to: sheesleeva

User image

Champion
6992
50001000500100100100100252525
Chicago, Illinois
Subject: RE: Kona Lottery Deemed Illegal
thanks I was about to do the math.

I wonder if it was more because of the money making aspect that they decided to go after them now.
if they have 2000 slot and $1000 a slot that comes to 2 mil. The lottery alone is making half of what the race entry makes them.
2015-05-14 3:17 PM
in reply to: sheesleeva


699
500100252525
Subject: RE: Kona Lottery Deemed Illegal
I'm guessing it'd actually be illegal in a lot of places, not just Florida. "No purchase necessary."
Consideration was always an issue when I worked in radio with all sorts of giveaways, contests, and promotions.
It was usually pretty straightforward, but every now and then there'd be something sketchy...like a "scratchoff" with each purchase that would yield some percentage off your current purchase. Well, yes, technically you could give away the sratchoffs even without a purchase and 30% off of $0.00 is still $0.00, so nobody loses. But it didn't work that way.

They'll find a way around it. They just need to think it through.

Jeez, if they really wanted to make money, put them on Stubhub. While it would make a lot of people ANGRY....so be it. Let the highest bidder pay. Then they can make other races cheaper.

It's like high demand concerts. If it sells out in 10 minutes, they're not charging enough. Charge more, discourage the scalpers/stubhubbers. If I REALY want to see the show, I'll pay the $300. But, it'd sure be a lot better if that artist would get the bulk of the $300, not a scalper.
2015-05-14 3:22 PM
in reply to: sheesleeva

User image

Champion
6992
50001000500100100100100252525
Chicago, Illinois
Subject: RE: Kona Lottery Deemed Illegal
thanks I was about to do the math.

I wonder if it was more because of the money making aspect that they decided to go after them now.
if they have 2000 slot and $1000 a slot that comes to 2 mil. The lottery alone is making half of what the race entry makes them.
2015-05-14 3:25 PM
in reply to: sheesleeva

User image

Master
2855
20005001001001002525
Kailua, Hawaii
Subject: RE: Kona Lottery Deemed Illegal
Originally posted by sheesleeva


It was gambling as you paid money and weren't necessarily getting anything in return.




we did get a DVD out of it LOL


2015-05-14 5:42 PM
in reply to: metafizx

User image

Pro
6520
50001000500
Bellingham, WA
Subject: RE: Kona Lottery Deemed Illegal

 

"We continue to believe in the Collins’ vision for making the IRONMAN World Championship accessible to athletes of all abilities and plan to announce new plans later this year."

I do not think this is the death of a dream but the road to get there will change.

2015-05-14 5:49 PM
in reply to: popsracer

Veteran
379
100100100252525
Subject: RE: Kona Lottery Deemed Illegal
Originally posted by popsracer

 

"We continue to believe in the Collins’ vision for making the IRONMAN World Championship accessible to athletes of all abilities and plan to announce new plans later this year."

I do not think this is the death of a dream but the road to get there will change.




I predict it will be like the Boston Marathon - if you can't qualify, you can raise a whole bunch of money and get in. ....I still prefer the lottery even if I never won. At least I could dream
2015-05-14 6:46 PM
in reply to: sheesleeva

User image


928
50010010010010025
Subject: RE: Kona Lottery Deemed Illegal
Originally posted by sheesleeva

Originally posted by jennifer_runs

Originally posted by juniperjen
I saw this last night in a different article and was curious about how the Kona lottery was different than the marathon lotteries such as New York - i guess it's all about the amount? That is not clear.  I ended the NYC Marathon lottery a few years ago and it was only about $15 or so for the lottery process - is that basically an administrative fee?

The difference is WTC is a private company whereas races like NY Marathon are run by non-profits. The lottery fee that NY Marathon charges is much smaller and just a "processing fee" (which I guess they have to justify with their accountants as how much it costs to administer the lottery) and not intended to earn money, as the WTC's is ($50/lottery entry).

I'm not sure what marathons like Chicago or Houston charge for their lotteries (if at all) but I assume it's more like what NY does.


I read the complaint and the forfeiture agreement. The non-profit and amount charged have nothing to do with it. The Ironman lottery was deemed illegal because Florida law, (statute 849.09) and Florida Constitution (Art. 10 sect. 7) prohibit gambling. It was gambling as you paid money and weren't necessarily getting anything in return.


This is the part that I read, from NYRR from their FB page:

"Nonprofit organizations are able to use the paid entry lottery system as the fees are considered a nonrefundable donation. For profit companies cannot use this type of lottery. The NYC marathon is put on by the NYRR (New York Road Runners) which is a 501c-3 nonprofit." (as opposed to the IM events, which are owned by a For profit company)."

So if anything I was wrong about the amount-- they could still charge more if they wanted to.
2015-05-14 7:49 PM
in reply to: jennifer_runs

User image


643
50010025
Subject: RE: Kona Lottery Deemed Illegal
Seems like an odd interpretation of the law but I'm sort of glad it's over. I never liked the idea of lottery for Kona. It seemed like a money grab. It would be like having a lottery for the Olympics. Sort of against the point... Now I could see the point of the lottery if there were no other Ironmans in the world but there are plenty. I do like the idea of the legacy program though. You put in the time effort (and a lot of cash...) but you physically just are not as gifted as the pointy people. 12 IMs to get entry seems like it shows dedication.

I one day hope to get to Kona (via a freak race or legacy program). I know if I ever get there that it would be a proud moment since I earned it and didn't just get randomly selected.
2015-05-14 8:29 PM
in reply to: zed707

User image

Official BT Coach
7364
500020001001001002525
Indianapolis, Indiana
Gold member
Subject: RE: Kona Lottery Deemed Illegal

I guess there is part of me that is glad to see the lottery is gone - I am of the mind that Kona is a World Championship and an athlete should qualify to be there - but that's another discussion for another day.  That said, I suspect the lottery will be back in fairly short order in one form or another.

Here's the thing I don't get -

"In addition to changing the way the lottery system works, Ironman will have to pay $2,761,910 to the federal government for money collected from the lottery dating back to October 2012."  From Triathlete.com - http://triathlon.competitor.com/2015/05/news/ironmans-kona-lottery-program-ruled-illegal_116108#W6vkxgORR2UHxM86.99

This sounds like a government money grab to me. The lottery has been run out of Tampa Bay, FL for 35 years and it wasn't done in the dark - so why now?. If this was such a terrible thing and all these people were supposedly wronged, why does the federal government get the money?

Big bad evil corporation taking in all this illegal money so the government rides to the rescue and TAKES the big bad corporation's ill-begotten money.  I recall my momma' teaching me something about two wrongs not making a right.



2015-05-14 11:37 PM
in reply to: zed707

User image


282
100100252525
Subject: RE: Kona Lottery Deemed Illegal

Statement from IRONMAN in response to recent DOJ decision. 

"We are proud of the longstanding tradition of the IRONMAN Kona Lottery. Thanks to the vision of IRONMAN Co-founders, John and Judy Collins, the IRONMAN Lottery has changed lives and provided athletes of all abilities the opportunity to participate in the world’s most challenging and iconic one day endurance event, the IRONMAN World Championship in Kailua-Kona, Hawaii. 

The IRONMAN Kona Lottery has operated in a substantially similar manner since 1983. Several months ago, the Tampa office of the U.S. Department of Justice contacted IRONMAN to claim that the IRONMAN Kona Lottery is not compliant with existing lottery and gambling laws. Since that time, we have fully cooperated with the Department of Justice through a series of meetings and correspondences. As a result of our cooperation, the Department of Justice and IRONMAN have come to an agreement to no longer operate the Kona Lottery in its current form. While we do not agree with U.S. Department of Justice’s interpretation of the relevant statutes or that there has been anything untoward or inappropriate in our operation of the IRONMAN Kona Lottery, IRONMAN chose to settle so that we can focus on our priorities – our athletes and our events. 

Our 2015 winners of the IRONMAN Kona Lottery are unaffected by this agreement and their slots will be honored. 

We continue to believe in the Collins’ vision for making the IRONMAN World Championship accessible to athletes of all abilities and plan to announce new plans later this year. "

 

If they actually meant any of this then the WTC would give a FREE lottery entry to each competitor (and possibly a multiplier for how many consecutive years your have completed an IM event).  

Charging for it is a blatant cash grab and I, for one, am glad it has come to an end. 

2015-05-15 9:30 AM
in reply to: Chillin

User image

Extreme Veteran
959
5001001001001002525
Greenwood, South Carolina
Subject: RE: Kona Lottery Deemed Illegal

I hate to see it come to an end and have no issue with Ironman profiting off the system. Ironman is a business and need profits to survive. They will have to make up that loss in lottery revenue so you can expect a small increase in race fees. I like watching Kona and knowing there are people reaching goals and dreams through the lottery system. I think it also helps grow the sport which is good for all of us.

It does not impact me since I'm happy with the Ironman events stateside but I do feel sad for those that had Kona on their bucket list.
2015-05-15 10:11 AM
in reply to: zed707

User image

Extreme Veteran
1190
1000100252525
Silicon Valley
Subject: RE: Kona Lottery Deemed Illegal
I wonder how many people who entered felt like they were victimized by this and needed the govt to step in and save them? My sense is almost all of them, know that FL considers it a violation of law, would do it again in a heart beat.

Ronald Reagan said it best: "The most terrifying words in the English language are: I'm from the government and I'm here to help."


2015-05-15 10:26 AM
in reply to: 0

User image


74
2525
Post Falls, Idaho
Subject: RE: Kona Lottery Deemed Illegal
Originally posted by jennifer_runs
This is the part that I read, from NYRR from their FB page:
"Nonprofit organizations are able to use the paid entry lottery system as the fees are considered a nonrefundable donation. For profit companies cannot use this type of lottery. The NYC marathon is put on by the NYRR (New York Road Runners) which is a 501c-3 nonprofit." (as opposed to the IM events, which are owned by a For profit company)."
So if anything I was wrong about the amount-- they could still charge more if they wanted to.


I'm not sure how Florida law relates to NY law, but if it were similar in this respect and if Ironman wanted to retain the lottery it seems the easy solution would be to donate the lottery slots to The Ironman Foundation (a legal 501(c)(3)) and they could run the lottery on a donation basis as a fund raiser. World Triathlon Corporation would lose a huge revenue stream though from all the entries, passport upgrades, and slot sales.

They should be able to write off the value of those slots as a donation which would help their financials, though not nearly enough to offset their loss in revenue.



Edited by rframe 2015-05-15 10:27 AM
2015-05-15 11:21 AM
in reply to: Stuartap

User image

Pro
6520
50001000500
Bellingham, WA
Subject: RE: Kona Lottery Deemed Illegal

Originally posted by Stuartap I wonder how many people who entered felt like they were victimized by this and needed the govt to step in and save them? My sense is almost all of them, know that FL considers it a violation of law, would do it again in a heart beat. Ronald Reagan said it best: "The most terrifying words in the English language are: I'm from the government and I'm here to help."

Exactly.  The world is now a safer place and I can get on with my life.



2015-05-15 2:47 PM
in reply to: sheesleeva

User image

Regular
565
5002525
Wisconsin
Subject: RE: Kona Lottery Deemed Illegal
Originally posted by sheesleeva

Originally posted by jennifer_runs

Originally posted by juniperjen
I saw this last night in a different article and was curious about how the Kona lottery was different than the marathon lotteries such as New York - i guess it's all about the amount? That is not clear.  I ended the NYC Marathon lottery a few years ago and it was only about $15 or so for the lottery process - is that basically an administrative fee?

The difference is WTC is a private company whereas races like NY Marathon are run by non-profits. The lottery fee that NY Marathon charges is much smaller and just a "processing fee" (which I guess they have to justify with their accountants as how much it costs to administer the lottery) and not intended to earn money, as the WTC's is ($50/lottery entry).

I'm not sure what marathons like Chicago or Houston charge for their lotteries (if at all) but I assume it's more like what NY does.


I read the complaint and the forfeiture agreement. The non-profit and amount charged have nothing to do with it. The Ironman lottery was deemed illegal because Florida law, (statute 849.09) and Florida Constitution (Art. 10 sect. 7) prohibit gambling. It was gambling as you paid money and weren't necessarily getting anything in return.

Comparing Ironman lottery to Houston or New York is irrelevant - what killed Ironman was its headquarters is in Florida, which prohibits the lottery.


The interesting thing reading the legal filings, they had exact numbers for each year. Last year nearly 14,254 people entered to win one of 100 slots, and of those 6,889 bought the "passport" membership that gave them a second chance. So if you were a first time entrant and only bought the one $50 slot, your chances were 1 in 200. In truth, the odds aren't bad, enter multiple years, even better. Too bad they put the kibosh on the system.

Ironman forfeited $1.72 million in proceeds from the lottery. Over the last three years the lottery profit was $654,410; $911,600; and $1,057,150 - decent profit.




Good analysis! Thank you.
2015-05-15 4:01 PM
in reply to: Swimbikeron

User image

Champion
9998
500020002000500100100100100252525
, Minnesota
Gold member
Subject: RE: Kona Lottery Deemed Illegal

The part I object to is that the government keeps the money.  That just seems a little bit extortionist to me.  This has happened for years, did they ever warn WTC that they can't do this?  I might even think they waited until pursuing WTC was profitable, point out their error, and then run away with the money.  Why is this not going to the lottery entrants?  I see this is different from a class action suit, but I would feel a lot better if it worked out similarly.  

2015-05-15 9:58 PM
in reply to: BikerGrrrl

User image

Veteran
1900
1000500100100100100
Southampton, Ontario
Subject: RE: Kona Lottery Deemed Illegal
Originally posted by BikerGrrrl

The part I object to is that the government keeps the money.  



The government always wins the lottery... ALWAYS.
New Thread
General Discussion Triathlon Talk » Kona Lottery Deemed Illegal Rss Feed  
RELATED POSTS

Kona Lottery Announcement

Started by rbalazs
Views: 933 Posts: 4

2008-04-15 12:55 PM BellinghamSpence

Kona Lottery

Started by Lookingtoride
Views: 826 Posts: 6

2006-04-17 2:35 PM weds19

Kona Lottery

Started by millarg
Views: 936 Posts: 15

2006-04-15 9:14 PM OldAg92

Kona Lottery - who is applying?

Started by dodgersmom
Views: 1367 Posts: 14

2006-02-03 8:33 AM PGoldberger

2006 Kona lottery open!

Started by TH3_FRB
Views: 929 Posts: 16

2005-08-31 9:58 AM TriBodyboarder
RELATED ARTICLES
date : November 26, 2012
author : alicefoeller
comments : 0
Highlights of Beginner Triathlete Members at the Ironman World Championships
 
date : October 7, 2012
author : alicefoeller
comments : 1
A look at Beginner Triathlete members racing in Kona from qualifying to training to family.
date : November 12, 2010
author : Coach AJ
comments : 0
Four Kona athletes give us their race stories.
 
date : October 20, 2010
author : Coach AJ
comments : 0
We interview several age-groupers pre-race on their Ironman Kona race thoughts.
date : April 16, 2008
author : Z-dog
comments : 0
Kona 2006 Swim Exit triathlon wallpaper provided by Z-dog
 
date : July 10, 2007
author : Ontherun
comments : 0
Having three seasons under my belt I thought I knew what I was doing. That all changed with a few new challenges and a bunch of new friends.
date : December 27, 2004
author : trilover
comments : 0
Interview with three-time Ironman World Champion Peter Reid
 
date : September 5, 2004
author : USATriathlon
comments : 0
Position rule violations during triathlon racing.