The Indiana Supreme Court gave the National Collegiate Athletic Association (NCAA) and Ticketmaster a victory late last week by ruling that the ticket lottery utilized for college basketball’s Final Four does not violate Indiana law.
For years, the two have been administering the ticket lottery for the popular annual event, so a ruling against them could have put them in a position to have to consider abandoning the practice. The NCAA had already altered the lottery as a result of the lawsuit by stopping the practice of retaining entrants’ fees.
The case was referred to the state’s Supreme Court by the Seventh Circuit Court of Appeals, which sought clarification on issues surrounding whether the plaintiff’s claim of the lottery being illegal held merit. The Supreme Court said that the lottery was not illegal, in part because the state’s statutes are very broad as it pertains to lotteries.
As a result of the state Supreme Court ruling, the appeals court may decide to dismiss the case.
“We are very pleased with the opinion issued by the Indiana Supreme Court,” NCAA spokesperson Erik Christianson said in a statement. “We have long maintained that our fans have access to NCAA championship tickets in a manner that is fair and legal, and with this opinion, we believe the 7th Circuit Court of Appeals should dismiss this case.”
In 2009, the year in question in the original class action lawsuit, the NCAA and Ticketmaster required fans to pay upfront for tickets to the Final Four, but they did not receive tickets unless they won a random-drawing lottery. If they didn’t win, the face value of the tickets was refunded, but the two kept the processing fee of between $6 and $10 per ticket.
The state Supreme Court said in its ruling that the NCAA/Ticketmaster distribution system, “appears to be a reasonable method of addressing a difficult problem, and it seems to distribute tickets in a more fair and civilized manner than a first-come-first-served process.”
The ruling, which was written by Justice Frank Sullivan, also stated:
Contrary to the plaintiffs’ argument, the fact that the fee is nonrefundable means that both groups receive the same amount after the blind draw. Those applicants whose offers to purchase tickets are accepted receive tickets for $150 per ticket, whereas those applicants whose offers are rejected receive $150 in cash per ticket. Thus, like in [a related case], “those receiving tickets got nothing of greater value than those who received refunds.” Additionally, the plaintiffs have not alleged that their nonrefundable handling fees go toward providing extra benefits to successful applicants. Rather, they pled that the handling fees grossly exceed the amount needed for shipping and handling and that the handling fees grossly profit the NCAA. Thus, under the plaintiffs’ theory, the majority of the handling fees, even for successful applicants, are profits distributed to the NCAA’s general fund. The fact that the handling fees are usually refundable under other randomized ticket-distribution plans, including [those in a related case], does not alter the prize analysis. In fact, in those cases, unsuccessful applicants receive more than successful applicants because they receive the face value of the tickets plus the handling fee, whereas successful applicants receive only the tickets, which are worth the face value. Although the nonrefundable nature of the handling fee may alter the consideration analysis, it does not alter the prize analysis.
