Retired Couple finds Lottery "Loophole" and wins Millions

[BigJCy]

Saw this on 60 Minutes tonight and thought it was a good watch. It's 14 minutes long:

https://www.cbsnews.com/news/jerry-...millions-using-a-lottery-loophole-60-minutes/

 

[CyCloned]

Who ever put those games together is probably in hot water right now....

 

[yler4cy]

That is impressive!

 

[Deleted member 8507]

Who ever put those games together is probably in hot water right now....

Not really, the states still made millions off of them. Someone had to win those "roll down" prizes and this guy figured out how to make it him.

 

[helechopper]

Just amazing. Good for them, for all of them.

 

[theshadow]

Fantastic. Reminds me a little of the guy who figured out the pattern on "Press Your Luck" and raked in the cash.

 

[Knownothing]

Who ever put those games together is probably in hot water right now....

Actually nobody lost money. It was basically a win all the way around.

 

[Ozclone]

Actually nobody lost money. It was basically a win all the way around.

Money wasn't created, so somebody had to lose money or not make as much which is the same thing. I think it's great that they figured it out and took advantage of the lottery's mistake but the money came from somewhere.

 

[Ozclone]

Not really, the states still made millions off of them. Someone had to win those "roll down" prizes and this guy figured out how to make it him.

The state made millions pre-rolldown, then they lost a smaller number of millions after it rolled down. Sure the net is millions in earnings but the design of the game is flawed in that it gave away some of the earnings versus just not rolling down.

 

[dmclone]

Maybe my math is backwards but I'd say the only people who really lost are the people who played the lottery when it wasn't in a roll down phase. Once again, maybe I'm wrong but it would be similar to this scenario:

A state run casino has to pay 95%(made up number) of it's winning back to the customer per month. On the last day of the month they are sitting at 91% payout, to get to that 95% payout, they may actually have to payout over 100% to catch up to 95%. Who is losing out in this scenario? The people who played the rest of the month and only received a 91% payout.

The only difference in this scenario is that the state(lotto) is actually telling you when they are paying out over 100%, where the casino just does it in the background without you knowing.

Looking back, it seems so stupid that someone didn't figure this out before. I watch the story but I wonder how the logistics went. Most stores don't have the manpower to just sit there and print out 100k+ tickets.

 

[SEIOWA CLONE]

Money wasn't created, so somebody had to lose money or not make as much which is the same thing. I think it's great that they figured it out and took advantage of the lottery's mistake but the money came from somewhere.

I googled the couple and found a couple interesting articles. The couple won 7.7 million net, they used 2 terminals in western Mass, gave the owners one share in their corporation, and would spend up to 10 hours a day running tickets, 10 plays at a time. This couple had the computer pick the number every time.
The MIT group was playing larger numbers, and doing more shady things. The drawing would be rolled back when it 2 million dollars, the MIT group figured out that they could trigger a roll back and did so on at least 2 occasions. They would do that by buying huge amounts of tickets at the last minute as it approached the 2 million dollar threshold. The first time they made $700,000 of the trigger. They also did not let the computer pick the numbers, but played only certain numbers. So they filled out 100's of thousands of tickets and then scanned them.

The only way either one would lose is if someone actually got all the numbers correct and won the grand prize, which did happen a few times. Otherwise they continued to win at $10 and 50 dollars at a time.

The state of Mass. earned around $120 million off the game, their investigation showed no one lost money, that no one was cheated and the odds of the players that only bought a few tickets were not decreased by the large players.

Moral if you want to win big, you have to play big, which they 2 groups were doing.

 

[besserheimerphat]

...Moral if you want to win big, you have to play big, which they 2 groups were doing.

It's called the Law of Large Numbers. Given enough attempts, even incredibly unlikely events are eventually going to occur.

Did you know that 1/20 people suffers from a "rare disease?" There are so many rare diseases and so many people that in aggregate they aren't really all that rare.

https://rarediseases.info.nih.gov/diseases/pages/31/faqs-about-rare-diseases

 

[Knownothing]

Money wasn't created, so somebody had to lose money or not make as much which is the same thing. I think it's great that they figured it out and took advantage of the lottery's mistake but the money came from somewhere.

The people that lost money were the normal lottery losers who bought a ticket and didn't match numbers. So yeah that is where the money came from.

 

[besserheimerphat]

A state run casino has to pay 95%(made up number) of it's winning back to the customer per month. On the last day of the month they are sitting at 91% payout, to get to that 95% payout, they may actually have to payout over 100% to catch up to 95%. Who is losing out in this scenario? The people who played the rest of the month and only received a 91% payout.

You are absolutely right. I'm guessing the folks who regulate the gaming industry don't understand statistics. They want regular intervals that show that the payout is XX%. Due to randomness and uncertainty, on "unlucky" months the game organizers have to increase the odds of winning. What they should do instead is run a statistical test to indicate with 99.XX% Confidence that the payout is at least XX% over the life of the game. Then you can keep the game truly random and prevent this kind of thing.

 

[Cyclonepride]

Pretty amazing. With the amount of money on the line, you'd think they would have a big accounting firm vet the hell out of each game to make sure that the odds were in the State's favor (in all scenarios).

 

[SCNCY]

Pretty amazing. With the amount of money on the line, you'd think they would have a big accounting firm vet the hell out of each game to make sure that the odds were in the State's favor (in all scenarios).

The game was in the state's favor, they made 120 million off the game, while the retired couple and the MIT group made a profit of less than 10 million.

 

[Cyclonepride]

The game was in the state's favor, they made 120 million off the game, while the retired couple and the MIT group made a profit of less than 10 million.

That's why I added "in all scenarios". If enough people figured out what they figured out, they may have lost money.

 

[cyclone101]

That's why I added "in all scenarios". If enough people figured out what they figured out, they may have lost money.

Somebody would still be buying the tickets though. I'm no math wiz but the same number of tickets would have to be bought to make it roll down and then there are still a set number of winning numbers from a mathematical sense, right? So the same number of tickets would have to be bought to land on the winners. Doesn't matter if 2 people are doing it or 2000.

 

[mywayorcyway]

Money wasn't created, so somebody had to lose money or not make as much which is the same thing. I think it's great that they figured it out and took advantage of the lottery's mistake but the money came from somewhere.

This is my question as well. Someone was losing money; where was it coming from? If these two groups hadn't been raking in money, who would have gotten it?

 

[dmclone]

This is my question as well. Someone was losing money; where was it coming from? If these two groups hadn't been raking in money, who would have gotten it?

They would have just had to do more "roll downs".

This is simplistic but lets say that once the jackpot went over 5m, they would have to do a roll down.

Scenario 1 (No math Wizards play)
There is 5.1 million in the jackpot
For each $1 ticket, on average $1.06 is paid out
There are 3 million in sales for the week
This means that the jackpot balance is now 4.92 million (5.1m-180k)

Scenario 2 (Wizards play)
There is 5.1 million in the jackpot
For each $1 ticket, on average $1.06 is paid out
There are 5 million in sales for the week
This means that the jackpot balance is now 4.8 million (5.1-300k)

Whether the wizards play or not, the average payout is going to stay the same. The only thing that is going to change is the jackpot balance, which won't hit the maximum as often the more people play.

Th e state made their money during the non roll down weeks.