Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Couple wins millions using lottery loophole

msn.com

Post reply on HN
Print view View original

21–30 of 191 posts

Re: Couple wins millions using lottery loophole

#21

Post by progval »

pliny wrote: post #15
thaumasiotes wrote: post #12

Earlier quoted context omitted.

The state makes money from every ticket purchased. The lottery simply pays out a fixed percentage of ticket revenue. More ticket sales means more money to the state, regardless of whether those tickets, when purchased, had an expected positive or negative return.

If the ticket has an expected positive return for the buyer, then the state must be losing money.

It has an expected positive return only on the days there was a Rolldown.

Money came from people who played on days there wasn't one.

Re: Couple wins millions using lottery loophole

#22

Post by onion2k »

onetimemanytime wrote: post #7

$80 BILLION a year in lottery spending, that was shocking to me. Only 30 some countries have bigger yearly budgets. https://en.wikipedia.org/wiki/List_of_countries_by_governmen...

It's very common for people who win small prizes to 'reinvest' their winnings though. Someone who spends $5 and wins $25 might then just buy $25 of tickets with that win. If they're playing online that money never really exists - it's just an account balance in a database going up and down.

Re: Couple wins millions using lottery loophole

#23

Post by barking »

MeteorMarc wrote: post #18

I just wonder, do you have to think very high about yourself to play such a game and enjoy it? Or very low? I just can not imagine myself feeling good about this. Of course, the feeling dumbs a bit: compare the feelings you had after using your first illegally copied floppy disk or mp3 track and the later ones, but still.

I'd enjoy it very much and not feel bad at all.

Re: Couple wins millions using lottery loophole

#24

Post by zawerf »

pliny wrote: post #15
thaumasiotes wrote: post #12

Earlier quoted context omitted.

The state makes money from every ticket purchased. The lottery simply pays out a fixed percentage of ticket revenue. More ticket sales means more money to the state, regardless of whether those tickets, when purchased, had an expected positive or negative return.

If the ticket has an expected positive return for the buyer, then the state must be losing money.

I feel like mathematically, you must be right. One of the sides must be calculating their expected value wrong.

For example I can offer to pay a $3 jackpot (split across winners) for a $1 game for guessing heads or tails. If more than 3 people play the game, I make money. For each player, the naive way to calculate expected return is $3 * 0.5 + $0 * 0.5 - $1 = $0.5. So the players also think they are making money. But once you account for jackpot splitting, that "expected value" isn't positive anymore. To calculate this correctly, the player (who has less information) need some way to model the distribution of the number of other players.

Re: Couple wins millions using lottery loophole

#25

Post by Slartie »

When I read this kind of stories about US lotteries (and there seem to be several of this kind of stories going around), I always wonder how on earth it is possible for so many cases of failed lottery rule design to exist in the first place, and for those clear failures to persist for so long.

Did no one notice that the lottery always lost huge sums of money during the Rolldown draws, while it gained money on normal draws (as it should always be the case)? No one noticed that certain convenience stores suddenly sold hundreds of thousands worth of tickets in these draws, while most other stores sold a normal amount?

Re: Couple wins millions using lottery loophole

#26

Post by amelius »

Piskvorrr wrote: post #9
tylerhou wrote: post #5

Earlier quoted context omitted.

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 =…

That requires a lot of faith in the fairness of the particular lottery.

Re: Couple wins millions using lottery loophole

#27

Post by yomly »

danielecook wrote: post #16

Love hearing stories like this where people gained because of some loophole. Does anyone know if there is a compilation somewhere of these? See also: https://www.businessinsider.com/us-mint-ends-the-dollar-coin...

Look up Joan Ginther - ex-Stanford statistician and she won scratchcard lotteries multiple times (I seem to recall by arbing non-uniform geographical distribution of winning cards). Unfortunately I can't find a technically satisfying article and don't have ability to find one right now...

Re: Couple wins millions using lottery loophole

#28

Post by thaumasiotes »

pliny wrote: post #15
thaumasiotes wrote: post #12

Earlier quoted context omitted.

The state makes money from every ticket purchased. The lottery simply pays out a fixed percentage of ticket revenue. More ticket sales means more money to the state, regardless of whether those tickets, when purchased, had an expected positive or negative return.

If the ticket has an expected positive return for the buyer, then the state must be losing money.

You're not thinking about this the right way. The ticket doesn't have a positive expected return as a structural feature of the lottery. It has a positive expected return conditional on the total number of tickets sold being less than a fixed value.

Re: Couple wins millions using lottery loophole

#29

Post by thaumasiotes »

zawerf wrote: post #24
pliny wrote: post #15

Earlier quoted context omitted.

If the ticket has an expected positive return for the buyer, then the state must be losing money.

I feel like mathematically, you must be right. One of the sides must be calculating their expected value wrong. For example I can offer to pay a $3 jackpot (split across winners) for a $1 game for guessing heads or tails. If more than 3 people play the game, I make money. For each player, the naive way to calculate expected return is $3 * 0.5 + $0 * 0.5 - $1 = $0.5. So the players also think they are making money. Bu…

> mathematically, you must be right. One of the sides must be calculating their expected value wrong.

He isn't right. The state doesn't work with expected values in any way. Money comes in via ticket sales, some of it goes into the state budget, the rest goes out as lottery payouts. There is no element of chance in any of that.

As you point out here and I point out elsewhere, the expected value of a ticket for the purchaser depends on the total number of tickets sold, which has been mostly elided from the discussion. In fact, it's mostly irrelevant as to this past event; at the actual ticket volumes, returns really were positive on the days in question.

Re: Couple wins millions using lottery loophole

#30

Post by mrspuratic »

danielecook wrote: post #16

Love hearing stories like this where people gained because of some loophole. Does anyone know if there is a compilation somewhere of these? See also: https://www.businessinsider.com/us-mint-ends-the-dollar-coin...

Irish Lottery, 1992, brute force - you could purchase all ~2M combinations for https://en.wikipedia.org/wiki/National_Lottery_%28Ireland%29...
Post reply on HN