Hagens Berman Sobol Shapiro: NCAA and Ticketmaster Accused of Fleecing Fans Through Illegal Lottery
' ... a scheme that would make a Vegas bookie blush' LOS ANGELES, May 22 /PRNewswire/ -- Ticketmaster (NASDAQ:IACI) and the National Collegiate Athletic Association (NCAA) were hit with a class-action lawsuit today, claiming the two organizations violated racketeering laws by forcing ticket purchasers to pay a non-refundable fee to enter what the lawsuit claims is an illegal lottery for the right to purchase tickets to high-profile sporting events including college basketball tournament games.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080317/AQM144LOGO) "The NCAA and Ticketmaster have come up with a scheme that would make a Vegas bookie blush," said Rob Carey, partner at Hagens Berman Sobol Shapiro, and the attorney representing the named plaintiff. "We will show that this NCAA practice has illegally taken millions of dollars out of consumers' pockets."
Ticketmaster, a subsidiary of InterActiveCorp, was named in the lawsuit filed in U.S. District Court, Central District of California, along with defendant NCAA. The defendants are located in California and Indiana, two states in which lotteries are illegal unless run by the state or licensed charities. According to the lawsuit, the defendants have created two types of lotteries, one for the preliminary rounds and one for the "Final Four," the final three games of the extraordinarily popular college basketball playoff held each spring. People who want to purchase face-value tickets to preliminary-round NCAA basketball games must participate in a lottery by sending in an application requesting up to eight tickets, the suit says. Applicants must pre-pay the full ticket price for all the games in that round, along with a $10 "service fee" to take part in the lottery. According to the suit, if the applicant wins the lottery, the NCAA releases the tickets, but if the applicant is not selected, the NCAA refunds only the ticket price while pocketing the fee. The scheme is even more brazen for Final Four games and is a practice the NCAA has engaged in for years, the complaint states. According to Carey, Final Four fans are required to submit an application to purchase tickets, but each application can include up to 10 entries, each requiring a separate $6 entry fee -- dubbed a "handling fee" by the NCAA -- along with full payment for all 20 tickets. "The rub is that you are limited to winning once, so if one of your entries is selected, your other nine are null and void, but the other nine entry fees go right into the pockets of the NCAA and Ticketmaster." Carey also noted that the NCAA and Ticketmaster require applicants to make what is in effect an interest-free loan to the NCAA for the entire amount the tickets would cost. The defendants profit from the interest earned by depositing the full ticket prices sent in by lottery participants and holding the losers' money for months, well beyond the date of the alleged lottery. The complaint cites cases in which the NCAA and Ticketmaster held fans' funds from losing lottery bids for about five months before refunding the money. In one example, the NCAA stopped accepting applications to an event on May 31, 2006, but reimbursements weren't issued until October of 2006, according to the complaint. "We plan to show that the defendants created a scheme that lines their own pockets by forcing fans to engage in illegal gambling to try to get game tickets," Carey added. "Gambling can be extremely lucrative for the defendants when you have hundreds of thousands of fans willing to give away $100 or more to win a chance to buy at most two of only 5,000 tickets." Carey added that it appears the NCAA and Ticketmaster have been intentionally vague in disclosing how many tickets are available through the lottery. "We know that the number of tickets made available in past lotteries has been a small fraction of the total number of seats," Carey said. "We intend to show that the NCAA and Ticketmaster have created a gambling venture with terrible chances of winning -- a scheme perfect for generating millions in excess profits at the expense of the fans." According to the lawsuit, only 4,600 tickets were distributed through the lottery system for the 2008 Final Four in San Antonio, while the NCAA and Ticketmaster received an estimated 100,000 entries. "The lottery creates virtually no downside to the NCAA or Ticketmaster because they aren't losing anything, they can only sell the tickets at face value," Carey added. The lawsuit seeks to represent all fans that submitted an application for tickets to an NCAA championship tournament -- including women's basketball and men's hockey -- and paid a fee to enter a drawing for the right to purchase one or more tickets from 1998 until the present. The lawsuit lists several charges against the NCAA and Ticketmaster including violations under the state and federal RICO Acts based on gambling violations, unjust enrichment, and civil conspiracy. Additional counts against the NCAA include violations of the Indiana Consumer Protection Act and monies had and received. Tempe, Arizona resident Tom George is the named plaintiff in the case. George is an avid college basketball fan, and has participated in the NCAA lottery for a number of years. To sign up to join this class action, please visit http://www.hbsslaw.com/NCAA. To contact HBSS regarding this case please e-mail info@hbsslaw.com or call (602) 840-5900.
About Hagens Berman Sobol Shapiro Hagens Berman Sobol Shapiro is based in Seattle with offices in Chicago, Cambridge, Los Angeles, Phoenix and San Francisco. Since 1993, it has developed a nationally recognized practice in class-action and complex litigation. Among recent successes, HBSS has negotiated a $300 million settlement in the DRAM memory antitrust litigation; a $340 million recovery on behalf of Enron employees; a $150 million settlement involving charges of illegally inflated charges for the drug Lupron, and served as co-counsel on the Visa/Mastercard litigation which resulted in a $3 billion settlement, the largest anti-trust settlement to date. HBSS served as counsel in a $850 million Washington Public Power Supply settlement and represented Washington and 12 other states against the tobacco industry that resulted in the largest settlement in history. For a complete listing of HBSS cases, visit http://www.hbsslaw.com/. CONTACTS: Rob Carey (602) 224-2626 Mark Firmani (206) 443-9357 First Call Analyst: Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20080317/AQM144LOGO CONTACT: Rob Carey of Hagens Berman Sobol Shapiro, +1-602-224-2626, Web site: http://www.hbsslaw.com/
2008-05-22 19:25:54 0369412 PRNEWSWIRE
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