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Couple wins millions using lottery loophole

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Re: Couple wins millions using lottery loophole

#101

Post by jedberg »

To all the folks saying, "how did the State not know the odds?", a lot of gambling games come out without anyone running the odds. A great example is blackjack switch [0]. The game was invented by an ex-gambler and he never really knew the odds of the game. He just convinced some casinos to try it and would advertise what their average take was. Because most people are bad at math and wouldn't play well, it was always bigger than the actual house advantage anyway.

It was only years later that someone finally ran the numbers and figured out the actual house advantage of the game [1], but no one cared because everyone who had a table was making money on it. Even with regular blackjack, the casinos always make way more than the statistical house advantage because people play poorly.

It was probably the same deal here. The State didn't care what they actual odds were, they just cared that they were making money on it.

[0] https://en.wikipedia.org/wiki/Blackjack_Switch

[1] https://wizardofodds.com/games/blackjack/switch/

Re: Couple wins millions using lottery loophole

#102

Post by brandonscott »

directional wrote: post #86
giarc wrote: post #76

Earlier quoted context omitted.

He didn't have insider knowledge though. He used the games own rules to play an advantage. Those rules were available to everyone, everyone could have done the same.

The rules are available to everyone, but having enough cash to purchase that many lottery tickets certainly isn't. Unfortunately this is yet another system that enables the already rich to get richer on the backs of the poor.

Any of the millions of poor people that buy lottery tickets every week could have spent a much smaller initial sum and worked up to the millions. It just would have taken longer.

Re: Couple wins millions using lottery loophole

#103

Post by mNovak »

bhl wrote: post #100
twic wrote: post #70

The paper's reporting revealed that two groups were dominating Cash Winfall: the Selbee gang from Evart, Michigan, and their competition, a syndicate led by math majors from MIT, the Massachusetts Institute of Technology. These were kids young enough to be the Selbees' grandchildren. Incredibly, the MIT group bet between $17 and $18 million on Cash Winfall over a seven-year period, earning at least $3.5 million in pr…

Based on the numbers alone, that's about a 20% return for the MIT group, for an annualized return (not considering compound interest) of less than 3% per year. Does this suggest that those trying to game the lottery should just turn to investing in the market? It's amusing to see that the market, which is less structured in probability and more volatile, outperforms the lottery in this aspect.

The money is only tied up for a few days of the year while they hold tickets though, the rest of the time it could be sitting in a suitably liquid investment. In that sense it far outperforms the market.

Re: Couple wins millions using lottery loophole

#104

Post by JMTQp8lwXL »

esaym wrote: post #83
coldcode wrote: post #69

I wish lotteries handed out many $1M prizes instead of giving $250M to one person. People understand what to do with $1M (I think) but most people are ruined by $250M.

That actually sounds like a good idea. Though there is the old saying "the lottery is just a tax on the poor". My aunt actually won 2 million back in 2007. She had just divorced my uncle (so I guess she is my ex-aunt) and bought a ticket and used the birthdays of me and a few others as the numbers. She was smart in that she chose to set up a trust fund with yearly pay outs instead of a lump sum. She told her sister t…

How do you know such detailed financial numbers? It sounds like she gave her financial bookkeeping records.

Re: Couple wins millions using lottery loophole

#105

Post by bcbrown »

bhl wrote: post #100
twic wrote: post #70

The paper's reporting revealed that two groups were dominating Cash Winfall: the Selbee gang from Evart, Michigan, and their competition, a syndicate led by math majors from MIT, the Massachusetts Institute of Technology. These were kids young enough to be the Selbees' grandchildren. Incredibly, the MIT group bet between $17 and $18 million on Cash Winfall over a seven-year period, earning at least $3.5 million in pr…

Based on the numbers alone, that's about a 20% return for the MIT group, for an annualized return (not considering compound interest) of less than 3% per year. Does this suggest that those trying to game the lottery should just turn to investing in the market? It's amusing to see that the market, which is less structured in probability and more volatile, outperforms the lottery in this aspect.

That doesn't mean they had that amount of capital under investment.

If you bet $10 every week, and every week you win $11, at the end of the year you've bet $520 and made a profit of $52. But you never had more than $10 "invested".

If that $18 million was evenly spread out over 7 years, it would be close to $50k/week, or $215k/month. Those are probably more accurate amounts of working capital for calculating ROI.

Re: Couple wins millions using lottery loophole

#106

Post by [deleted] »

ptaipale wrote: post #89
coldcode wrote: post #69

I wish lotteries handed out many $1M prizes instead of giving $250M to one person. People understand what to do with $1M (I think) but most people are ruined by $250M.

Everywhere, people say they prefer lotteries where there are more prizes with smaller wins, instead of one winner with huge jackpot. But also everywhere, their actual bahaviour is that when there is one big jackpot, they bet more. And those who arrange lotteries do know their business.

[deleted]

Re: Couple wins millions using lottery loophole

#107

Post by tamaharbor »

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.

Do you feel bad about taking a tax deduction? As long as you play by the rules, your intelligence should be rewarded.

Re: Couple wins millions using lottery loophole

#108

Post by directional »

brandonscott wrote: post #102
directional wrote: post #86

Earlier quoted context omitted.

The rules are available to everyone, but having enough cash to purchase that many lottery tickets certainly isn't. Unfortunately this is yet another system that enables the already rich to get richer on the backs of the poor.

Any of the millions of poor people that buy lottery tickets every week could have spent a much smaller initial sum and worked up to the millions. It just would have taken longer.

According to the couple quoted in the article, taking advantage of a 'Rolldown' draw required an initial investment of $1,100 (equivalent to around $1,500 now). That's not a sum easily available to those who are poor.

Re: Couple wins millions using lottery loophole

#109

Post by briandear »

tantalor wrote: post #58
chrismcb wrote: post #45

Earlier quoted context omitted.

You, and everyone else. That is the rule of the game. You aren't doing anything wrong. By that logic, any money winner is taking payours from future winners.

> You aren't doing anything wrong. That's debatable. Lotteries are supposed to be completely up to chance. If by your own ingenuity you exploit a weakness then you are tipping the scales in your favor, which is unfair to less clever players. It's basically the tragedy of the commons; everyone has the same chance of winning, but only you know you can safely risk more and win more, lessening the winning of others.

Unfair to the less clever players? How is it unfair? They can do the exact same strategy. It isn’t my fault of someone else doesn’t “get” it. It’s a game, not a civil right.
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