Why safeguarding lottery integrity requires new thinking

Recent events within the lottery industry have made one thing very clear: integrity cannot be treated as a background function. It must be the foundation of every operational and legal decision a lottery makes. When players lose trust in the fairness of the game, everything else collapses. Participation slows, revenue drops and the public purpose behind our work is weakened. That simple truth guided the Arizona Lottery's recent approach to addressing bulk purchasing and the risks that come with it.

The catalyst for national attention was a widely publicized 2024 case in Texas. According to reports, a targeted group identified what they believed was their perfect storm of an opportunity: a high jackpot, a game structure that allowed them to narrow the odds and the ability to pour tens of millions of dollars into tickets. They had access to expertise, financial resources and personnel that everyday players do not have. When an investor can spend $22m to walk away with $44m, it reinforces perceptions that lotteries are systems built for the wealthy or connected - which is exactly the perception that harms public trust.

Keeping the element of chance

Prior to the incident in Texas, the Arizona Lottery had already been monitoring similar behavior. Fast Play games were showing unusual activity, and second-tier prizes were being siphoned by those playing for investment purposes. In several cases, small retailers that typically sold a modest volume of tickets were suddenly processing exponential increases in sales. Our IT and compliance teams flagged these aggressive spikes, confirming that investment groups were manipulating the lottery to remove a core attribute of the game: chance.

The question became how to respond in a way that protected players and stood on solid legal ground.

For many, the instinct is to start with legislation. But the problem here is that statutes are slow to change and difficult to draft for an issue that continues to evolve quickly. Defining what a "playing for investment" purpose or an investment group are, determining limits across multiple game types and setting thresholds that remain relevant as ticket prices shift present legislative difficulties. Similar issues exist with adopting rules to handle problems presented by bulk ticket purchasing. We explored those means of enforcement, and they did not provide the agility and flexibility required to be effective in light of potential changes in market dynamics.

It is important to distinguish between game rules and regulatory rules, as they serve different functions within the lottery ecosystem. Regulatory rules are broad, governing the overarching conduct of the lottery and its licensees, and must undergo a rigorous, often lengthy, administrative rulemaking process. Game rules, by contrast, are specific to the mechanics and terms of an individual game or family of games - determining how a player wins, prize structures and specific prohibitions on manipulation. Because game rules are incorporated into the specific contract of that game, they can be drafted and implemented with greater speed and precision, allowing a lottery to address immediate threats to game integrity without rewriting the broader regulatory code.

Changing the game... literally

The most effective approach was to embed protections directly into our game rules, leveraging the well-established legal principle that a lottery ticket represents a binding contract between the player and the lottery. Courts have consistently affirmed that, when a player purchases a ticket, they are accepting an offer subject to the specific terms and regulations governed by the lottery.

For instance, in Brown v. State, the Wisconsin Court of Appeals held that "the purchase of a lottery ticket upon the prescribed terms" constitutes "an acceptance of an offer that creates a binding contract." Similarly, the Georgia Court of Appeals ruled in Georgia Lottery Corp. v. Patel that "by buying a lottery ticket, a lottery player accepts the [Lottery's] offer of a chance to win a prize under the terms printed on the ticket." By grounding our strategy in this contractual framework, we establish that compliance with game rules - including bulk purchase restrictions - is a condition precedent for a valid claim.

Building on this legal foundation, the Arizona Lottery implemented specific, enforceable language within our Fast Play game rules to operationalize this contract theory. We established a clear definition for a "bulk ticket transaction," defined as any individual, group or entity purchasing, in aggregate, tickets exceeding $50,000 within a twenty-four-hour period. Crucially, this rule explicitly covers purchases made "by multiple individuals acting in concert," preventing organized groups from skirting the limit by spreading purchases across different runners or retail locations.

Under these rules, any ticket identified as part of a bulk transaction is contractually ineligible for prize payment. This creates a targeted, adaptable safeguard that carries the force of law without the delay of a statutory process. It sends a definitive message to investment groups: attempting to manipulate the Arizona Lottery through bulk purchasing will result in a denial of the prize, turning their "investment" into a total loss.

The importance of consistency

There is practical precedent behind this strategy. Lotteries deny claims for rule violations regularly - retailer employees who buy tickets while on duty are ineligible to claim prizes, for example - and courts have historically upheld these decisions based on the terms of the game. In Patel, the court ultimately affirmed that the ticket itself contained the essential terms of the contract, binding the parties to the rules printed thereon. That consistency is important. It gives lotteries the confidence to enforce protections that are fair, transparent and legally sound.

States across the country have taken notice, and some have reached out to discuss our game rule changes, enforcement mechanisms and general structure for these changes. Some states allow unlimited purchases while others are exploring regulatory rules that require corresponding statutes. Each state's environment is different, but what many of them share is an interest in approaches that provide for the sustainability of the lottery within their state while also adhering to their state's specific lottery requirements and culture. Our model has the unique advantage of adaptability and flexibility. We decided on a model that allows us to be agile. If game structures change, or if ticket prices shift, we can adjust the rules. That kind of responsiveness is essential in an industry where technology and player behavior evolve quickly.

Evolving with confidence

Despite the technical and legal details, the core messaging is simple: players deserve a fair game. Retailers deserve clarity and support. Other lotteries deserve partners who are willing to test new approaches. The response to our rule changes has been positive. Players have expressed appreciation for protections that keep the playing field level and retailers understand those boundaries and welcome the consistency. Regulators and legal teams in other states have been able to consider new frameworks that they may not have realized were even possible.

A year from now, success will mean two things to the Arizona Lottery. First, that we see no bulk purchase attempts in Arizona because the deterrence has worked. Second, that other states feel confident enough to adopt similar approaches. The more consistent the standards become across jurisdictions, the harder it is for organized groups to exploit weaknesses from one state to another. A national benchmark would make the entire industry stronger and safer.

Lotteries have more legal tools at their disposal than many people assume. You do not need a statutory overhaul to protect your players. You do not need a years-long regulatory process to close a loophole that bad actors rely on. Sometimes the answer is to look closely at the authority already in hand and be willing to use it in new ways. In Arizona, that approach has allowed us to stay ahead of emerging risks - and it positions the industry to evolve with confidence.

Kome Akpolo is the Chief Legal Officer for the Arizona Lottery, where he also serves as a member of the Executive Team. Bringing 16 years of legal experience, Kome began his service working for the State of Arizona as a legal counsel for the State of Arizona Department of Water Resources in 2022 and was appointed to his current role with the Lottery in 2023. He is responsible for supporting the Arizona Lottery's strategic legal needs, with a broad scope of duties that include drafting legislation and rules, contract review, intellectual property management, and regulatory compliance. Additionally, Kome provides executive oversight for the Lottery's security, investigations, licensing, and compliance divisions.