NCAA Ticket Lottery System Under Fire

Posted by rtmsf on July 19th, 2010

Last week a federal appeals court in Chicago reinstated a lawsuit against the NCAA that takes a direct shot at its lottery-based process for distributing the oh-so-coveted Final Four ducats each year.  Many fans who have never attended (or tried to attend) a Final Four may not know this, but depending on the size of the venue, the NCAA offers a good number of tickets for sale to the general public every year.  Next year, with Houston’s Reliant Stadium (and its 71,500 seats) hosting the final weekend, the NCAA is offering 20,000 seats for sale to the public.  A lottery process determines if your application is one of the lucky few.  From the NCAA website:

Only one properly submitted application per individual/household will be accepted for inclusion in the NCAA’s ticket selection process. The NCAA will use a random, selection process to determine successful Men’s Final Four recipients in July 2010.  Those individuals selected to receive tickets will be notified by the end of August.   Individuals not selected to receive tickets will receive a refund of the full application deposit amount by August. Men’s Final Four tickets may not be offered as a prize in a promotion, sweepstakes or contest, or auctioned for fundraising purposes unless authorized in advance by the NCAA.  (emphasis added by RTC

These Will Cost You a Pretty Penny (+ Processing)

The rub of this lawsuit is that the NCAA also requires a nonrefundable $6-$10 processing fee with each application, regardless of whether you “win” or “lose” the tickets.  So if you are one of the many unlucky applicants and your check isn’t fortuitously chosen from the hopper, you will only get a refund for the value of the tickets, not the processing fee.  Due to this nice little Ticketmaster-esque add-on of a few extra bucks to play the game, this “lottery” for Final Four tickets (where everyone loses even when they win) might just be illegal in the state of Indiana. 

The class-action suit (of residents from New York, Arizona and Oregon) argues that the state government of Indiana (where the NCAA is HQ’d) is the only entity within the Hoosier State who may lawfully run a lottery, and as such, the NCAA’s money-making fee structure is in clear violation of the law.  The Court of Appeals decision agreed in stating that people who apply for Final Four tickets are not aware that they are gambling (“pay to play”) when they submit an application, and the NCAA could have avoided this whole mess if they’d simply refunded the processing fees to those who did not win tickets. 

The next phase of the case will be discovery and another chance in front of the District Court, but it seems from our viewpoint that the NCAA is probably going to have to pay something on this whether as part of a large settlement or a judgment against them.  By refusing to refund the processing fee, there’s just something that doesn’t pass the sniff test here, and undoubtedly the Court of Appeals had that in mind in sending the case back.  Going forward, however, it seems as if the NCAA could make a very simple change and resolve this.  Either eliminate the processing fees of those who, you know, don’t actually get processed (the “losers”), or take away the processing fee completely and just add $10 to the face value of every ticket.  Will markedly fewer people submit applications if the lower-level seats are $210 instead of $200; or $190 vs. $180 for uppers?  Not likely. 

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