This is an interest debate. I've read through Bitlotto's website and statements in this topic, and I've found a way he could cheat.
The algorithm he uses to compare the sha-256 hash of the block hash and the mega ball number, against the transaction hash. I haven't seen any place where he's disclosed this algorithm.
So as of now he could be cheating. This is easy enough to fix though, by just disclosing the process so anyone can replicate it.
Did you read:
http://bitlotto.com/details.html ?
It's all there and always has been. Otherwise I could change how I pick the winner! I did change/tweak the method a few times before BUT EVERY TIME it was done well in advance of the draw and announced so I couldn't cheat.