LOS ANGELES (CN) – The NCAA and Ticketmaster operate an illegal lottery to sell and distribute tickets to NCAA Division I sports tournaments, a RICO class action claims in Federal Court. The claim for more than $5 million alleges that the defendants force fans to participate in an illegal lottery for the right to buy scarce tickets.
Named plaintiff Tom George says the NCAA expects revenue of more than $600 million this year. He challenges the lotteries for Division I NCAA men’s and women’s basketball and hockey championships, but says the conspiracy may extend to other sports. He claims that Ticketmaster implements the conspiracy under NCAA control.
George claims that to buy tickets for the NCAA hoops tournament, class members must pay $10 for the right to participate in the “allegedly random drawing,” through which they can buy up to eight tickets, with only one lottery entry allowed per family. Lottery participants must send the full price of the tickets with the entry fee, and lose or win, they will not get the entry fee refunded, he says.
Tickets for Final Four games also are chosen by lottery, “but the costs are significantly higher,” the complaint states. In this round, participants can make one “application” for the right to buy up to two tickets – for $150 or $170 apiece – but each “application” can contain up to 10 “entries,” at $6 apiece.
“To maximize the chances of winning a lottery, the applicant would submit one application with 10 entries,” the complaint states. “Each entry would seek two tickets – the maximum number of tickets than can be awarded – and would require a $6 entry fee and the total cost of both tickets. This would result in a $3,060 or $3,460 payment to the NCAA, depending on which price level the applicant requested.
“Applicants, however, can only win the lottery once. Thus, would-be ticket purchasers can pay up to $3,460 for the right to enter the lottery and win, at most, two tickets to the Final Four. The NCAA permits applicants to increase their odds of being drawn by submitting multiple entries solely to increase revenues, not to facilitate the distribution of its tickets.”
In this case, the NCAA would keep the additional $60 entry fee, win or lose, the complaint states. It adds, “In addition to the entry fees, the NCAA holds the money it receive from applicants for up to seen months and reaps huge profits. … (T)he NCAA collected approximately $100 million in payments in 2008 – total ticket prices, plus entry fees – but did not return money to ticket holders for at least five months. The NCAA reaps a huge financial windfall from, at the very least, the use of the lottery applicants’ money. … The NCAA no longer discloses how many people enter the lotteries, but according to the Los Angeles Times, more than 267,000 people sought tickets to the 1994 Final Four alone.”
The class demands an injunction, costs and punitive damages for RICO conspiracy, civil conspiracy, unjust enrichment and violations of business and consumer law. They are represented by Elaine Byszewski with Hagens Berman Sobol Shapiro.