(CN) - The NCAA's system for selling tickets to Final Four games may constitute an illegal lottery, the 7th Circuit ruled, reinstating a class action filed by unlucky ticket seekers.
Four people who failed to land tickets to NCAA men's basketball games filed a class action against the league and Ticketmaster, claiming the ticket-distribution system is an illegal lottery.
Final Four ticket applicants were required last year to deposit the full face value of the tickets for each entry submitted, plus a $6 service fee. Ten entries were allowed per person, so a pair of $150 tickets would require a down payment of $3,060 in order to maximize the chances of winning.
Losers were refunded the cost of the tickets, but not the service fees. An unlucky applicant who entered 10 times would have to forfeit $60 without receiving a ticket.
The NCAA claimed that its ticket-distribution system is not illegal because no prize is offered, only an opportunity to buy tickets at full price.
A federal judge in Indiana dismissed the case, saying the class members were equally at fault because they knowingly participated in what they described as an illegal lottery.
But the 7th Circuit in Chicago reversed and allowed the class action to proceed, ruling that the ticket applicants did not believe the distribution system was illegal when they applied for tickets.
Judge Richard Cudahy dissented, saying the service fee does not make the system an illegal lottery. He added that a ticket applicant's willing participation in a lottery would disqualify them from making a claim.
The class contains hundreds of thousands of potential members, according to the plaintiffs' estimate.
The NCAA has used the disputed ticket distribution system for Division I men's and women's basketball and for hockey tournaments.
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