For triathletes who aren’t the world’s best, but still dream of racing in the storied Ironman World Championship, there’s always been a tantalizing shortcut to the shores of Kona, Hawaii. Cough up some money, get your name in a lottery, and cross your fingers that you’ll win one of a handful of entries.
The race’s owners have billed it as a way for the everyman and woman to tread the same path as the sport’s legends. Triathletes have alternately welcomed it as a lifeline or derided it as an un-earned honor. Now, the U.S. Justice Department has another name for it: illegal gambling.
The U.S. Attorney’s Office in Tampa, Florida, announced Wednesday that it had reached an agreement with the World Triathlon Corporation, the Florida-based owner of Ironman races, over allegations that the entry system violated a Florida state ban on lotteries and a federal anti-gambling law. Under the deal, WTC doesn’t admit to any wrongdoing, but must forfeit $2.76 million to the feds—the money it earned from lotteries over the last three years.
The case forces Ironman to look for another way to leave the Kona door open to middle-of-the-pack amateurs. And it raises questions about whether the increasingly common lotteries used to dole out entries to everything from marathons to mountain bike races might run afoul of the law. The good news is most lottery-based races shouldn't have to change a thing. Ironman was singled out for a series of complex factors—from how the lottery earnings were spent to when athletes were charged—that don't apply to many other endurance events.
In court documents, federal prosecutors argued the Ironman lottery crossed the line because the Florida constitution prohibits lotteries. That in turn broke a federal law that prohibits gambling in a state if it’s outlawed there, according to prosecutors. Lottery and gambling laws vary widely by state and are extremely complicated. While six U.S. states have no state-run lotteries, for example, in a twist of the law, Florida does.
Also, prosecutors zeroed in on Ironman’s use of the lottery as a moneymaker. For the 2015 race, people paid $50 to get into the lottery, and another $50 to increase their odds of snatching one of the 100 lottery slots available. All told, Ironman earned $1 million from the lotteries that year, according to prosecutors. Other events, like Colorado’s Leadville Race Series, use lottery entry fees to raise money for charity rather than for profit. Or, in the case of the Western States Endurance Run, they only charge athletes an entry fee if they are picked in the lottery.
“I wondered how long it would be before I got a phone call,” said Josh Colley, director of the Leadville series. “Now that I have, probably the next phone call I'll make is to our headquarters asking where do we stand.”
His organization, owned by the Minnesota-based company Life Time Fitness, has a lottery to determine who gets many of the coveted slots into its high-altitude Leadville 100 trail ultrarun and mountain bike races. The events use the lottery because it seems like a fair way to distribute entries, Colley says. He’s put off by the mad online stampede for limited slots at some popular endurance events. The Leadville lottery has the side benefit of raising money for charity. The $15 fee to enter the lottery is channeled to the local Leadville Legacy Foundation and a Life Time charity, totaling approximately $50,000 in a year.
A Life Time spokeswoman said in light of the legal settlement, “we are reviewing our current procedures to ensure compliance.”
Despite the similarities, details of the Ironman case suggest Leadville—and a number of other races—could be in the clear.
Unlike Ironman or Leadville, a number of races require a small fee, or charge nothing unless a lottery entrant gets a spot in the race. That’s true for the Western States 100 ultra-marathon, major marathons including New York City, and the Peachtree Road Race in Atlanta, Georgia. With 60,000 runners, it’s the world’s biggest 10K, and the largest running race of any kind in the U.S.
The Ironman case “has no implications at all” for the Peachtree lottery, said race director Rich Kenah. He’s heard of other races using the lottery as a way to make money, but said he didn’t know which ones.
Asked whether the Justice Department is looking at other events, William Daniels, spokesman for the U.S. Attorney’s Office, Middle District of Florida, wrote that “we do not comment regarding ongoing investigations, or whether, in fact, there are ongoing investigations.”
It’s not clear exactly what sparked the investigation into Ironman. Talk has swirled on triathlon forums about whether it was triggered by a letter sent to the Justice Department by athletes critical of some of the company’s practices. Daniels, however, said his office was aware of the lottery issue independently, and that the critics’ “purported actions had nothing to do with our investigation.”
But there is one tantalizing detail: one of the prosecutors on the case, James Muench, is intimately familiar with Ironman’s operation. He’s competed in eight Ironman triathlons, according to Daniels.
Ironman, meanwhile, said it would announce new plans later in the year. Lottery winners for the 2015 race will still get to line up in Kona this October. The company insists its previous lottery was above-board. But it said in a written statement that it chose to settle the case in order to stay focused on athletes and its events.
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