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Couple wins millions using lottery loophole

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Re: Couple wins millions using lottery loophole

#3

Post by bsaul »

treydey wrote: post #2

Can anyone explain the strategy like I'm 5? I'm confused by his answer.

Even weirder is the statement that the State that organized the lottery made more money thanks to them buying massive amount of tickets ( or maybe it was the publicity around the first newspaper article that triggered more interest, and so more participant in general ?)

Re: Couple wins millions using lottery loophole

#4

Post by Piskvorrr »

treydey wrote: post #2

Can anyone explain the strategy like I'm 5? I'm confused by his answer.

If nobody wins the big jackpot ("guess all the numbers") for some time, parts of it are given to the smaller winners ("guess a few of the numbers"). In this case, which happened once in a while, it became more likely that you'll win more than you have bet. Usually this means you'll win some $50; they have bet many, many times, and won $50 times many.

Doesn't work any more, rules have changed so this way of winning was removed.

Re: Couple wins millions using lottery loophole

#5

Post by tylerhou »

Piskvorrr wrote: post #4
treydey wrote: post #2

Can anyone explain the strategy like I'm 5? I'm confused by his answer.

If nobody wins the big jackpot ("guess all the numbers") for some time, parts of it are given to the smaller winners ("guess a few of the numbers"). In this case, which happened once in a while, it became more likely that you'll win more than you have bet. Usually this means you'll win some $50; they have bet many, many times, and won $50 times many. Doesn't work any more, rules have changed so this way of winning wa…

But which set of tickets do you buy?

Re: Couple wins millions using lottery loophole

#6

Post by Piskvorrr »

bsaul wrote: post #3
treydey wrote: post #2

Can anyone explain the strategy like I'm 5? I'm confused by his answer.

Even weirder is the statement that the State that organized the lottery made more money thanks to them buying massive amount of tickets ( or maybe it was the publicity around the first newspaper article that triggered more interest, and so more participant in general ?)

I understand the opposite: the State didn't lose any money, (but didn't make any money from these people winning, either); it made money from lottery as usual, but not from these people. (There's an implication that more people in general bought tickets, didn't win, and so the organizer made money from those - but it's not entirely clear.)

Re: Couple wins millions using lottery loophole

#8

Post by emerongi »

treydey wrote: post #2

Can anyone explain the strategy like I'm 5? I'm confused by his answer.

The jackpot grows off of people losing money. Once people have lost enough money ($5M), the chances of winning the money with a single ticket are raised, however you can no longer win the whole $5M with a single ticket - the money is now distributed over a larger pool of tickets.

After that it becomes a good bet, because you can bet smaller amounts, but still win more than you put in initially - you're profiting off of people who lost money before you.

Re: Couple wins millions using lottery loophole

#9

Post by Piskvorrr »

tylerhou wrote: post #5
Piskvorrr wrote: post #4

Earlier quoted context omitted.

If nobody wins the big jackpot ("guess all the numbers") for some time, parts of it are given to the smaller winners ("guess a few of the numbers"). In this case, which happened once in a while, it became more likely that you'll win more than you have bet. Usually this means you'll win some $50; they have bet many, many times, and won $50 times many. Doesn't work any more, rules have changed so this way of winning wa…

But which set of tickets do you buy?

From the article, it seems that it doesn't matter, they're random. (Or were random, apparently it's over now, doesn't matter.)

To make up an example:

Let's say that betting $1 in some way has a 4% chance of winning, and the payout is 20x bet, so if you win on one ticket, you get $20. So, you buy a lot of tickets (say 1000), and you pay $1000. Most of them don't win anything, but 4% of them win $20; $1000 x 4% x 20 = $800; you have won some, but you have $200 less than you started with. Not a good deal.

However, if nobody wins the jackpot, it is distributed amongst smaller payouts, which changes the equation: still 4% chance, but payout is now $30. Again, you pay $1000, buy 1000 tickets, most don't win anything, but the 4% that do, you get $1000 x 4% x 30 = $1200. You have $200 more than you started with. Profit! Of course, this will only work if you buy many tickets; buying one or two, you're unlikely to win anything at all.

The actual numbers were different in these cases, but the general principle is the same.

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