Motley Fool Has a "Winner"?

A controversial ending to an already unorthodox day

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FOOLottery!®

By Kerra Lyons-Fitzhugh
Washington Gazette Bureau Correspondent

Internet entrepreneurs The Motley Fool took on the American lottery system today... and lost.

In less than 12 hours the company went from trying to overhaul the lottery system with its online game -- FOOLottery! -- to begging customers to stop buying tickets.


After 16 embarrassing hours, the Gardner brothers
were left fearing for their company's survival, having
misunderstood the risk of their FOOLottery!

Early on, it looked like "the Fools," as they prefer to be called, might actually challenge more established state-run lotteries. FOOLottery! creator Larry McCloskey drew in players with the promise of a 110% payout (compared to the 50% offered by state governments), free tickets for referring friends, and senior discounts. Using the Internet, the company attracted millions of players from 77 countries who pumped up the pot to an amount that The Motley Fool claims was only $50 million, although independent sources suggest it was closer to $210 million.

But the promise of riches -- both for players and for Motley Fool -- proved disastrous. In a midday press release, the company announced that it was overwhelmed by the number of players, a large percentage of whom played with free promotional tickets. At 3:10 p.m., the company posted an open letter on its website (www.fool.com) asking its customers, amazingly, to "... please stop playing." The scheme then appeared to collapse under the weight of poor financial management, driven by a payout ratio that Bob Mortensen of Currency Today called, simply, "Stupid."

Facing imminent financial peril, The Motley Fool's Gardners were compelled to perform the drawing as planned, after a ruling by seventh circuit district judge Leo Horne called their hand.

Controversy ensued when the final ball (pictured below) was drawn. No independent third-party lottery officials were present during the drawing. This, and Motley Fool's use of ping-pong balls marked with hand-drawn characters, caused an uproar. Internet chat rooms filled with angry FOOLottery! contestants.


Their company's future on the line,
the brothers draw the final ball.

"I play a lot of these things -- the Pick Six, ThunderNumber, Powerball, buncha others -- and this one was a crock from the beginning," said one player, who goes by the Internet handle "ernie78," a self-described videogame reviewer who said he had printed out 116 tickets that he had not yet actually paid for.

A seeming lack of professionalism was further evidenced when, with his company's survival at stake, Motley Fool Tom Gardner asked for the call on the ball. Sources indicate that his brother David cried: "An oh? A zero? I don't know which!"


The winning numbers, letters, and animal drawn at 4 p.m.

FOOLottery!'s rules stipulate use of "animal-alphanumerics" -- numbers and letters, and an animal -- in contrast to most lotteries, which limit players to numbers only. But technology was not to blame; magic markers were. Handwriting on the lottery balls (pictured above) did not clearly distinguish between the letter "O" and the numeral zero ("0").

Met by reporters outside of The Motley Fool's offices and asked why a worldwide Internet lottery would use "bingo parlor technology" with tens of millions at stake, FOOLottery! chairman Larry McCloskey said only, "This was our first one -- this one was personal. Next question."

Seven law firms have announced their intention to organize class-action lawsuits and are asking players to contact them. For its part, Motley Fool has invited contestant feedback at lottery@fool.com. "Whether you loved our first day, or maybe were disappointed, we want to hear from you," a company spokesman said.

After a 40-minute meeting with their board and auditors, FOOLottery! officials reaffirmed that there is no winner. The group agreed to review all procedures and results next week during a company retreat to Wala-Oala.

In a late-breaking development, Chris Quinn of Channel 6 News has obtained a photograph taken by security cameras at Motley Fool that appears to show the brothers on premises 40 minutes after the drawing.

Elaine Zymanek of Littleton, Colo., who had discovered the game on her daughter's PC that morning, asked a question on many people's minds tonight. "So who gets the $125 million?"