Tampa Ironman organizer fined $2.8M for lottery

TAMPA -- The World Triathlon Corp., the organizer and owner of “Ironman” triathlon events around the world, has paid $2.8 million to the U.S. government after feds accused it of conducting an illegal lottery.

According to the complaint filed in U.S. District Court in Tampa, World Triathlon had charged athletes $50 for a chance to win a competition spot in the Ironman World Championship held each October in Hawaii. Thousands of athletes purchased multiple entries, which U.S. Attorney A. Lee Bentley III says violated Florida's lottery law.

The $2.8 million represents all the company's proceeds from those lotteries since October 2012, federal officials say. If World Triathlon had given away chances rather than charge for them, there would be no violation, they add.

World Triathlon was founded in 1989 by Dr. James Gills, an ophthalmologist in Tarpon Springs, for $3 million. It gave him the rights to the annual Hawaii championships, ongoing since 1978, as well as the “Ironman” brand. Gills operated World Triathlon out of his offices until he sold the company to Providence Equity Partners in Rhode Island for an undisclosed sum in 2008.

After the sale, Providence moved World Triathlon from Tarpon Springs to Tampa's Rocky Point.

The typical Ironman triathlon involves a 2.4-mile swim, a 112-mile bicycle ride, and a 26.2-mile run. Athletes can earn a spot in the Hawaii championship either by qualifying in a regional Ironman triathlon ahead of the championship, by winning an Ironman “lottery,” buying a slot through an eBay auction with a minimum bid of $10,000, or being selected through an Ironman loyalty program.

The lottery itself, according to federal officials, began in 1983, and continued after Gills purchased the brand in 1989. In the most recent lottery, each athlete was allowed to register just once. However, for an additional $50, each athlete could purchase a “membership” in a club that offered an increased chance of being selected through the lottery, by doubling chances.

The lottery operated outside the law, officials say, because it included an entry fee, a random selection to win, and a prize.

Over the last three years, World Triathlon sold nearly 37,500 primary chances in its lottery for between $40 and $50, and more than 17,100 additional chances at $50 each. In 2015 alone, World Triathlon earned more than $10,000 per slot available in the lottery. Each winner was required to pay an $850 registration fee on top of that.

World Triathlon executives fully cooperated with the investigation, prosecutors say, and do not admit to any wrongdoing in paying the forfeiture. The FBI assisted the U.S. Attorney's office in the investigation.