The person with the private key is the same organizing the lottery. He could very well disappear before the extraction or simply refuse to pay the winners.
I know, I'm strictly talking cheating with the random part. In that case it would be WAY easier to just take the money than cheat with the randomness but it is possible. Perhaps someone stole the key or someone with money wanted to help his chances. I don't know. But it does have a SMALL flaw.