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Couple wins millions using lottery loophole

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Re: Couple wins millions using lottery loophole

#131

Post by rwc »

qtplatypus wrote: post #120
jedberg wrote: post #101

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 alway…

I work in the gambling industry and live in au. From my perspective this is super strange. By law vendors have to publish the odd (and on some games the EV).

Publishing the odds is common. Doing the math on those odds apparently is not.

Re: Couple wins millions using lottery loophole

#132

Post by solveit »

Johnny555 wrote: post #112
izzydata wrote: post #95

Earlier quoted context omitted.

That's probably true. They should try to educate people that if there are 250 times as many winners that your chances of winning a significant amount of money is much higher.

I think if you could educate people on their expected return from a lottery ticket purchase, they wouldn't play at all. Telling people that they have a 95% chance of winning nothing at all is not a good way of selling lottery tickets.

I have a graduate degree in maths and have played the lottery. The expected return isn't the point.

Re: Couple wins millions using lottery loophole

#133

Post by tylerhou »

phkahler wrote: post #87
tylerhou wrote: post #5

Earlier quoted context omitted.

But which set of tickets do you buy?

All of them. They bought 1100 to ensure that every combination of some size was in their set of tickets.

I don’t think 1100 tickets is enough to cover all combinations of 4 numbers, but I don’t know the original lottery number range so I’m not sure.

Re: Couple wins millions using lottery loophole

#134

Post by Piskvorrr »

JoeAltmaier wrote: post #57
Piskvorrr wrote: post #56

Earlier quoted context omitted.

Actually, the state doesn't seem to enter into the equation at all, that's a red herring. State gets (ticket_sales - prize_money), sure. This amount is predetermined by the rules (usually "X% goes to state, 100-X% goes to prize pool). From here, the only changes happen in the way that the prize pool is distributed to winners: part goes to jackpot, part goes to smaller prizes; if jackpot too large, recalculate with a…

minus 5% for 'administration' which is outrageous. Its a fixed cost to administer the lottery. Should not be a percentage. And is anybody calculating the taxes on the prize, which also goes to fed/state?

I have no idea what the exact numbers are. I have tried to illustrate how the temporary increase in the smaller payouts has no bearing on how much the state makes, yet it makes the game temporarily profitable. Obviously this still needs to be profitable for the players after taxes, expenses and whatnot, otherwise it would be a complete non-story: "person does not get richer playing lottery."

Re: Couple wins millions using lottery loophole

#135

Post by lozaning »

dawnerd wrote: post #96
giarc wrote: post #75

Earlier quoted context omitted.

There is a story similar to the dollar coin gig to earn reward miles. A long time ago when plastic gift cards were first a thing, stores didn't have a way to update the balance. The scheme would be to buy a $100 gift card from Walmart using your credit card (getting the miles). You would then use the gift card to buy a $0.35 pack of gum. Since the store couldn't update the balance, they would give you cash as change.…

To expand, this still goes on, it's just a lot more convoluted and has become quite the cat and mouse game. It's been very interesting watching how manufactured spending has evolved.

I know people used to do this by buying the $1 coins from the US treasury, and then just take the coins to the bank and depositing them in order to manufacture spending.

Re: Couple wins millions using lottery loophole

#136

Post by ralusek »

maxxxxx wrote: post #117
ptaipale wrote: post #89

Earlier quoted context omitted.

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.

When I play (I don't know why but somehow I find it fun) I actually play SuperLotto which has a chance of 1 in 41,416,353 vs 1 in 292,201,338 with PowerBall. Better to make a few million with better odds than a few hundred million with worse odds. Never mind that it's much more likely that I will get struck by lightning :-(

That final 7x increase to the odds is the one that makes it not worth your while?

Re: Couple wins millions using lottery loophole

#137

Post by losvedir »

treydey wrote: post #2

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

* Expected value of the lottery tickets is normally negative. (You pay $1, you expect on average to get back less than $1).

* At a certain point, if the jackpot grows too large, the game switches to a new "windfall" mode where the expected value is actually _positive_ to bleed off the jackpot. (You pay $1, you expect on average to get back more than $1).

* The couple and the MIT students only played during the positive expected value times.

Overall the game still makes money for the state, it's just it has two distinct regimes, and the people playing during negative-EV essentially bankroll both the state and the positive-EV players.

Re: Couple wins millions using lottery loophole

#138

Post by maxxxxx »

ralusek wrote: post #136
maxxxxx wrote: post #117

Earlier quoted context omitted.

When I play (I don't know why but somehow I find it fun) I actually play SuperLotto which has a chance of 1 in 41,416,353 vs 1 in 292,201,338 with PowerBall. Better to make a few million with better odds than a few hundred million with worse odds. Never mind that it's much more likely that I will get struck by lightning :-(

That final 7x increase to the odds is the one that makes it not worth your while?

I didn't say it's well thought out...

Re: Couple wins millions using lottery loophole

#139

Post by flukus »

caymanjim wrote: post #121
izzydata wrote: post #95

Earlier quoted context omitted.

That's probably true. They should try to educate people that if there are 250 times as many winners that your chances of winning a significant amount of money is much higher.

People aren't betting that way because they're uneducated. People generally don't play the lottery because it's statistically wise. They play because dropping $1-3 on a ticket is no big deal, and it provides a little excitement and lets them fantasize about the winnings. Fantasizing about what you'd do with $250M is a lot more exciting than fantasizing about what you'd do with $1M, and once the odds are low enough, a…

> and it provides a little excitement and lets them fantasize about the winnings

I've heard this before, but why do you need a ticket to fantasize about what you'd do with that much money? It can be a conversation starter and I can see the excitement aspect in watching your numbers come up (if you don't have a hundred combos to watch at once), but fantasizing is free.

Re: Couple wins millions using lottery loophole

#140

Post by CydeWeys »

flukus wrote: post #139
caymanjim wrote: post #121

Earlier quoted context omitted.

People aren't betting that way because they're uneducated. People generally don't play the lottery because it's statistically wise. They play because dropping $1-3 on a ticket is no big deal, and it provides a little excitement and lets them fantasize about the winnings. Fantasizing about what you'd do with $250M is a lot more exciting than fantasizing about what you'd do with $1M, and once the odds are low enough, a…

> and it provides a little excitement and lets them fantasize about the winnings I've heard this before, but why do you need a ticket to fantasize about what you'd do with that much money? It can be a conversation starter and I can see the excitement aspect in watching your numbers come up (if you don't have a hundred combos to watch at once), but fantasizing is free.

As someone who's bought a few lottery tickets in his life, I can confirm that the fantasizing is in fact better when it's about something that could happen to you.
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