22 ms·

A group of recent Princeton graduates has won more than $6M in 66 lottery wins

166 points by edot 6y ago

dangrossman 6y ago
I read a similar story about someone in North Carolina a bit ago. He identified a scratch-off lottery game that was near its end, with an unclaimed top prize, and bought all the tickets left at gas stations in the less-populated parts of the state. He found the winning ticket.
HenryKissinger 6y ago
(Deleted)
- marktangotango 6y ago
  This and they have a large number of tickets to examine for patterns along with locations to look for patterns in physical ticket distribution.
- downrightmike 6y ago
  They are scratch offs
- next_phase2 6y ago
  Alternatively, they could do the math and figure out when the expected value exceeds the purchase price. That's how these games have been won in the past. It's explained a bit in the book, "How Not to Be Wrong: The Power of Mathematical Thinking" by Ellenberg, Jordan
vmception 6y ago
> She did not respond to a phone message or attempts to reach her through family and social media. uh yeah, these grifting creeps posing as journalists are exactly what people expect when they win lottery tickets and claim them non-anonymously. these students are clearly fronts for limited partners that found a way to stay anonymous
- Thorrez 6y ago
  >uh yeah, these grifting creeps posing as journalists are exactly what people expect when they win lottery tickets and claim them non-anonymously. Is there a reason you consider them not journalists?
  - notRobot 6y ago
    https://news.ycombinator.com/item?id=25225484 https://news.ycombinator.com/item?id=25225484
    - Thorrez 6y ago
      They're not journalists because they published too much info? It seems a lot more like journalism than a lot of stuff I see published such as "Top 10 x for you to y with", or simply restating a bunch of facts from a different news article. This involved independent research.
      - notRobot 6y ago
        They doxxed people who did nothing wrong.
        Thorrez 6y ago
        In my mind doxxing means displaying private information. Also in my mind Linkedin information isn't private.
  - kthxbye123 6y ago
    Lately there’s been a burst of intense anti-journalist sentiment generated by various tech plutocrats who would prefer to be free of public investigation or criticism. This sentiment trickles down to professional class workers with aspirational visions of becoming plutocrats, where it is enthusiastically aped and amplified, and applied indiscriminately to basically any journalistic endeavor, under the principal that the wealthy and influential should never have to be exposed to the public eye on anything other than their own terms
GhostVII 6y ago
This reminds me of the WinFall lottery [0], where if no one got a grand prize, the prize money was rolled over to the next week. As a result, if there were enough prizes rolled over to the next week the lottery could actually have a positive expected value, so groups of people started spending millions on tickets in these weeks. The lottery organizers didn't really even care much, since the people spending millions on tickets just increased their profitss. [0] https://www.theatlantic.com/business/archive/2016/02/how-mit-students-gamed-the-lottery/470349/ https://www.theatlantic.com/business/archive/2016/02/how-mit...
- chrismcb 6y ago
  Of course they shoukdnt care, because, if I remember correctly, it was only a positive payout if someone didn't win. Basically what it was doing was spreading the rollover along all winners" rather than growing the main jackpot. So the organizers were paying out the same amount of prize money.just under a different distribution.
- 8bitsrule 6y ago
  An idea for lottery payouts that are fun for a lot more people. Set a top-prize limit - say $50M. Now suppose the jackpot has risen to $200M. When someone claims the top prize, pay them the $50M. Then select 150 more winning numbers, randomly picked from the numbers sold, and pay each $1M. Or pay out 1500 $100,000 winners.
downrightmike 6y ago
The game is coming to an end, and the big prizes are still out there. Tickets cost $20 to $30, so fewer players.
iamtedd 6y ago
What a poor excuse for news. > "The four participants have not been accused of any crime. In fact, lottery officials in Indiana, Missouri and the District of Columbia told IndyStar that Montori and Davinroy, like all major prize winners, were vetted before receiving their winnings. > "We have not conducted an investigation that fell outside our standard clearance processes for big winners." Wendy Baker, communications manager for the Missouri Lottery, said in an email to IndyStar last week. And yet the IndyStar has publicised a heap of personal information about the winners online. Why?
- deleted 6y ago
  [deleted]
- howlgarnish 6y ago
  It can be interesting without being a crime.
  - iamtedd 6y ago
    Interesting enough to dox them?
    - chiefalchemist 6y ago
      In many state some of your personal details become public info in order to claim your prize.
    - rm445 6y ago
      The norms for doxing in media are going to have to change. It's a tenet of traditional journalism that everyone in a story must be doxed. A local newspaper wouldn't write a story about someone being burgled without describing them along the lines of Julie West, 53, unmarried, formerly of Westford but now living in Sackville Close, Eastford... I don't know the underlying reasons, I think it derives from principles of reporting truthfully combined with NOT having a principle of not giving personal information. But it seems weird as hell compared to more recent views on privacy an online anonymity.
vmception 6y ago
On the tax side, it is favorable. Under default tax rules, each losing ticket is deductible against the winning ticket's tax. Under a professional gambler election, each losing ticket is deductible as a Net Operating Loss, which allows deductions against everything and rolls over (and sometimes backwards) as a deduction into different years. Sadly, the tax reform law has severely limited this until 2026.
- RobRivera 6y ago
  Thank you for clueing me into professional gambler election. This changes the calculus.
  - vmception 6y ago
    The trick with taxes is to put every specific interest into its own business entity that just does that That business entity picks from a catalogue of alternate tax codes The entity type doesnt matter, so even if profits flow directly to you personally in a disregarded entity or partnership, the money and actions pass through an entity level force field that changes their tax treatment “The people” will never get this, its fine
    - gamblor956 6y ago
      That is not correct. The entity type does matter; if an entity of disregarded it is treated as not existing for tax purposes (hence the label). There is no magical force field that changes the tax treatment of tax items for disregarded or pass through entities.
      - vmception 6y ago
        Net Operating Losses generated in a disregarded entity are passed through to the individual level. You can convert capital losses to NOLs, you can convert gambling losses to NOLs, and a few other conveniences. Pick whichever source/year combination you choose to respect more. Or present a conflicting source. https://www.carnahanlaw.com/net-operating-loss-nol/ https://www.carnahanlaw.com/net-operating-loss-nol/ https://ttlc.intuit.com/community/taxes/discussion/can-a-california-disregarded-single-member-llc-carryback-a-nol/00/1822 https://ttlc.intuit.com/community/taxes/discussion/can-a-cal... https://www.mwellp.com/deducting-pass-through-business-losses/ https://www.mwellp.com/deducting-pass-through-business-losse...
ian0 6y ago
The story of the selbees, a couple who made ~8m for themselves and their community from gaming a lottery, is a great read [0] Jon Wertheim: You saved all the losing tickets? Marge Selbee: Saved them in big totes. Jerry Selbee: Big plastic totes. Jon Wertheim: There must have been millions. Jerry Selbee: 18. Jon Wertheim: $18 million worth of losing tickets. And you have those? Jerry Selbee: Uh-huh just in case we had a physical federal audit. Marge Selbee: We had the upstairs of the barn. I stored them in one end and in the other end. And then I thought, "Oh no, this floor is gonna fall through." So then we stored them down in the pole barn. And we had probably 60, 65 tubs of tickets. [0] https://www.cbsnews.com/news/jerry-and-marge-selbee-how-a-retired-couple-won-millions-using-a-lottery-loophole-60-minutes-2019-06-09/ https://www.cbsnews.com/news/jerry-and-marge-selbee-how-a-re...
- neal_jones 6y ago
  That story is awesome
- crucialfelix 6y ago
  My grandpa had 4 or 5 huge garbage bags full. On his death bed he whispered to me and I had to go out and buy the numbers for him.
- piracy1 6y ago
  Why would they need to keep them? Did they buy them with cash or something? Wouldn't the credit/debit transaction be good enough to prove you bought it?
  - sjs382 6y ago
    Maybe not everywhere, but in some states you need to pay for lottery tickets with cash.
Jdjdjdjjdhebe 6y ago
Maybe just boring old school money laundering?
- chewz 6y ago
  Money laundering would rather work different way. Someone who gets winning lottery ticket instead of claiming the prize himself sells it for a double to other guy who needs to legalize his income. In other variant the ticket is sold to someone who later uses it to pay a neat bribe... This is a rational move if one wants to increase his wining and possibly to make it tax free in return for taking a little additional risk.
- whimsicalism 6y ago
  Why would you use Princeton grads? And money laundering this way has got to be hella inefficient, no?
  - akhilcacharya 6y ago
    It's definitely not money laundering, but are Princeton grads too good to be involved in illegal activities? What a weird statement.
    - alisonkisk 6y ago
      Rich people don't need to risk their wealth by signing up to be mules.
    - whimsicalism 6y ago
      Too good to be the mules, yes certainly.
      - akhilcacharya 6y ago
        There was a Columbia undergrad that was charged with joining ISIS, this is a silly argument.
prvc 6y ago
>Even if the group developed a system for using public information to improve their odds, experts expressed skepticism that it could result in reliable profit. My hunch is that winning tickets are not in fact equally distributed, and they have discovered something regarding this. Going by already claimed prizes gives some information, and I am sure there's a decent way to model the relationship between the set of claimed tickets to that of the unsold winning tickets (to account for the "safe-deposit box" cases mentioned in TFA, which strikes me as a bit of a red herring).
- jerome-jh 6y ago
  Actually the winning tickets ARE equally distributed. They are not randomly distributed. Every roll/batch has the same number of small and mid-prices, let say under 5k$ to 10k$. As for the big prices they take care that they are evenly distributed across the country and over the lifetime of the game. A smaller scale trick is to social engineer the cashier to know which rolls have already released their prices, and buy from other rolls. Cashiers often tend to naturally do this with there best customers.
jb775 6y ago
My guess is they figured out who prints the lottery tickets, then gathered data on the ticket ID numbering system produced by that printer in the past(winner vs loser ticket ID's), then trained that data via deep learning to figure out probabilities of jackpot likelihood for each ticket ID # (or by range of numbers), then figured out the historic distribution patterns in relation to the ticket ID #'s, then pinpointed the specific places actually selling those ticket ID's, then drove to West Bumblefuck and bought all those tickets.
- toast0 6y ago
  That's the nefarious solution. The brute force solution seems to be use published redeemed winning ticket numbers to estimate sold ticket numbers? And then run expected value calculations of the unclaimed prizes vs the unsold tickets; if positive enough, go out and buy as many tickets as you can, process them and claim the winners (and enter any second chance drawings). Of course, if people delay claimimg prizes, it makes the estimates inaccurate.
- rm445 6y ago
  My guess would be employee fraud. Nothing against the people mentioned in the article, just where I'd start looking. There are umpteen posts in this thread already about potential interesting ways to game lotteries, but the historic way to get an edge is to have an insider.
Thorrez 6y ago
>The manager said they paid with cash or cashier's checks, and they weren't just buying at Break Time. Couldn't they pay with credit cards and get credit card rewards to help their margin?
- tempestn 6y ago
  Generally credit card companies consider lottery purchases to be cash advances, if they allow them at all.
fortran77 6y ago
It hints at the method right here: > Lottery officials said there is nothing wrong with players using data about the number of prizes outstanding during the lifetime of scratch-off games, which is regularly updated online So not really news. It's just a group of people had the nerve and initiative to do it and hope that the math works they way they expect.
- dorchadas 6y ago
  And the money to go buy some pricey tickets; if I had a dad who was a rich businessman who could probably support the first round, I'd totally do something like this too.
howlgarnish 6y ago
An (IMHO) more interesting story of somebody actually "hacking" the lottery (well, scratch cards): https://www.wired.com/2011/01/ff-lottery/ https://www.wired.com/2011/01/ff-lottery/
deleted 6y ago
[deleted]
n0nc3 6y ago
Rules to one of the mentioned lotteries. [0] It looks like prize counts are fixed in advance, so any information about redemption changes odds. Blacklight also shows that the lottery website is riddled with trackers, so it is possible they are inferring redemption from advertising data. [0] https://hoosierlottery.com/getmedia/33f6f7bf-f0e6-4265-bcbe-d4153b498b3b/2090-7million-mega-cash-rules.pdf https://hoosierlottery.com/getmedia/33f6f7bf-f0e6-4265-bcbe-...
lordnacho 6y ago
Quant guy here. This boils down to information about the game, and maybe tax laws. You have a load of scratch cards out there, most of them duds. If you come to a situation where a prize hasn't been claimed and there's few cards left to be sold, it's like counting Blackjack cards, the odds might change in your favour, or in favour of everyone who buys any ticket. If that happens you need to do a bit of optimizing risk, assuming you have a limited amount of money to potentially lose. Kelly Criterion will have something to say here. It really depends a lot on the details of the game. Are prizes rolled over if nobody found a winning card? Do cards expire? Is there a bulk buying discount? What is the nature of randomization? Does every region get its own guaranteed share of winners? And crucially, is there information released about the progress of the game? This is maybe the toughest bit to figure out. With quant hedge funds you get this thing where you have to do a lot of asking questions about how the data was collected, to ensure your assumptions hold. Tax I mentioned since it seems they formed a limited company. That's a whole game in itself, played by many many corporate entities in differing situations. You'd need to understand that as well. I know some traders whose entire jobs depend on understanding the difference between the tax codes of different countries.
- refurb 6y ago
  I have no doubt you can get information that drastically increases your odds. A long time ago, I worked for a retailer who sold lottery tickets. In order to sell tickets, I had to attend a government training session, at the actual government lottery center, which educated me on the different games and how they worked. It was probably the most interesting thing about the retail job. The people doing the training were the ones that either designed or managed the games and payouts. Some were near the end of the their career and were happy to share the history of the games and the ups and downs of managing them. I distinctly remember a couple tidbits where even my teenage mind went "well that's pretty relevant information to someone looking to game the lottery". 1. There was one game where the gov't actually decided to end the lottery because nobody ever won. The number of digits, the total possibilities and the number of people who actually bought tickets meant nobody ever won. So the gov't shut it down, but then players complained that they loved the game so much, so they started it back up. Still nobody won. 2. Scratch off tickets were sold in foil sealed packets of 20 tickets. The trainer dropped that there was always one winning ticket per pack, and only one. I had assumed that winning tickets were randomly distributed - some packets might have none, some might have 2 or 3. Nope, just one per packet. Now as the person selling the tickets, that's kind of important. I never mustered the energy to actually pursue it, but you could imagine how that could drastically increase your odds of a winning ticket.
harrygeez 6y ago
This kinda reminds me of MIT Blackjack Team
cryptica 6y ago
Probably just another scheme for rich daddies to launder money to their spoiled kids without paying tax. Making money these days is all about having a rich daddy, rich mommy, sugar daddy or sugar mommy. Gold diggers are the closest we have to 'self-made' these days.
BMSmnqXAE4yfe1 6y ago
Such a pity young capable people spend their most productive years doing something entirely unproductive. And one more thing. Are they winning with scratch cards only? Then it could be that they are utilizing some equipment to look through the paint, with accomplices in a ticket factory or distribution chain.
- ahelwer 6y ago
  There are endless things I could do with my free time that would be far more productive & useful to society than anything I could realistically be paid to do. Having lots of money would enable me to do those things.
- krimpenrik 6y ago
  Making (probably) millions you find unproductive?
  - ausbah 6y ago
    economically unproductive I think is what they meant, you could say society is a lot when their talents are used for gambling vs something like scientific research
    - MaxBarraclough 6y ago
      What about high-frequency traders? Profitable, technically challenging, but in a very real sense entirely pointless and contrived.
      - ausbah 6y ago
        I meant to add finance as a good example of what I meant, including HFT. basically just saying that while individually people benefit from working in these schemes, the broader economy arguably benefits little to even negatively
      - toast0 6y ago
        HFT isn't my cup of tea, but the rise of HFT has certainly narrowed spreads and contributed to zero comissions; and I apprechiate those effects.
jgbond 6y ago
There’s a whole chapter in the popular mathematics book “How to Not Be Wrong” by Jordan Ellenberg that covers successful lottery strategies and the math behind them. As I recall from the book, the basic strategy was very simple and had a few groups of practitioners. Optimizing for increased incremental returns was far more sophisticated, though. There were also the operational challenges of buying and tracking so many tickets.

166 points by edot 6y ago

I read a similar story about someone in North Carolina a bit ago. He identified a scratch-off lottery game that was near its end, with an unclaimed top prize, and bought all the tickets left at gas stations in the less-populated parts of the state. He found the winning ticket.

HenryKissinger 6y ago

(Deleted)

marktangotango 6y ago
This and they have a large number of tickets to examine for patterns along with locations to look for patterns in physical ticket distribution.
downrightmike 6y ago
They are scratch offs
next_phase2 6y ago
Alternatively, they could do the math and figure out when the expected value exceeds the purchase price. That's how these games have been won in the past. It's explained a bit in the book, "How Not to Be Wrong: The Power of Mathematical Thinking" by Ellenberg, Jordan

vmception 6y ago

> She did not respond to a phone message or attempts to reach her through family and social media. uh yeah, these grifting creeps posing as journalists are exactly what people expect when they win lottery tickets and claim them non-anonymously. these students are clearly fronts for limited partners that found a way to stay anonymous

Thorrez 6y ago
>uh yeah, these grifting creeps posing as journalists are exactly what people expect when they win lottery tickets and claim them non-anonymously. Is there a reason you consider them not journalists?
- notRobot 6y ago
  https://news.ycombinator.com/item?id=25225484 https://news.ycombinator.com/item?id=25225484
  - Thorrez 6y ago
    They're not journalists because they published too much info? It seems a lot more like journalism than a lot of stuff I see published such as "Top 10 x for you to y with", or simply restating a bunch of facts from a different news article. This involved independent research.
    - notRobot 6y ago
      They doxxed people who did nothing wrong.
      - Thorrez 6y ago
        In my mind doxxing means displaying private information. Also in my mind Linkedin information isn't private.
- kthxbye123 6y ago
  Lately there’s been a burst of intense anti-journalist sentiment generated by various tech plutocrats who would prefer to be free of public investigation or criticism. This sentiment trickles down to professional class workers with aspirational visions of becoming plutocrats, where it is enthusiastically aped and amplified, and applied indiscriminately to basically any journalistic endeavor, under the principal that the wealthy and influential should never have to be exposed to the public eye on anything other than their own terms

GhostVII 6y ago

This reminds me of the WinFall lottery [0], where if no one got a grand prize, the prize money was rolled over to the next week. As a result, if there were enough prizes rolled over to the next week the lottery could actually have a positive expected value, so groups of people started spending millions on tickets in these weeks. The lottery organizers didn't really even care much, since the people spending millions on tickets just increased their profitss. [0] https://www.theatlantic.com/business/archive/2016/02/how-mit-students-gamed-the-lottery/470349/ https://www.theatlantic.com/business/archive/2016/02/how-mit...

chrismcb 6y ago
Of course they shoukdnt care, because, if I remember correctly, it was only a positive payout if someone didn't win. Basically what it was doing was spreading the rollover along all winners" rather than growing the main jackpot. So the organizers were paying out the same amount of prize money.just under a different distribution.
8bitsrule 6y ago
An idea for lottery payouts that are fun for a lot more people. Set a top-prize limit - say $50M. Now suppose the jackpot has risen to $200M. When someone claims the top prize, pay them the $50M. Then select 150 more winning numbers, randomly picked from the numbers sold, and pay each $1M. Or pay out 1500 $100,000 winners.

downrightmike 6y ago

The game is coming to an end, and the big prizes are still out there. Tickets cost $20 to $30, so fewer players.

iamtedd 6y ago

What a poor excuse for news. > "The four participants have not been accused of any crime. In fact, lottery officials in Indiana, Missouri and the District of Columbia told IndyStar that Montori and Davinroy, like all major prize winners, were vetted before receiving their winnings. > "We have not conducted an investigation that fell outside our standard clearance processes for big winners." Wendy Baker, communications manager for the Missouri Lottery, said in an email to IndyStar last week. And yet the IndyStar has publicised a heap of personal information about the winners online. Why?

deleted 6y ago
[deleted]
howlgarnish 6y ago
It can be interesting without being a crime.
- iamtedd 6y ago
  Interesting enough to dox them?
  - chiefalchemist 6y ago
    In many state some of your personal details become public info in order to claim your prize.
  - rm445 6y ago
    The norms for doxing in media are going to have to change. It's a tenet of traditional journalism that everyone in a story must be doxed. A local newspaper wouldn't write a story about someone being burgled without describing them along the lines of Julie West, 53, unmarried, formerly of Westford but now living in Sackville Close, Eastford... I don't know the underlying reasons, I think it derives from principles of reporting truthfully combined with NOT having a principle of not giving personal information. But it seems weird as hell compared to more recent views on privacy an online anonymity.

vmception 6y ago

On the tax side, it is favorable. Under default tax rules, each losing ticket is deductible against the winning ticket's tax. Under a professional gambler election, each losing ticket is deductible as a Net Operating Loss, which allows deductions against everything and rolls over (and sometimes backwards) as a deduction into different years. Sadly, the tax reform law has severely limited this until 2026.

RobRivera 6y ago
Thank you for clueing me into professional gambler election. This changes the calculus.
- vmception 6y ago
  The trick with taxes is to put every specific interest into its own business entity that just does that That business entity picks from a catalogue of alternate tax codes The entity type doesnt matter, so even if profits flow directly to you personally in a disregarded entity or partnership, the money and actions pass through an entity level force field that changes their tax treatment “The people” will never get this, its fine
  - gamblor956 6y ago
    That is not correct. The entity type does matter; if an entity of disregarded it is treated as not existing for tax purposes (hence the label). There is no magical force field that changes the tax treatment of tax items for disregarded or pass through entities.
    - vmception 6y ago
      Net Operating Losses generated in a disregarded entity are passed through to the individual level. You can convert capital losses to NOLs, you can convert gambling losses to NOLs, and a few other conveniences. Pick whichever source/year combination you choose to respect more. Or present a conflicting source. https://www.carnahanlaw.com/net-operating-loss-nol/ https://www.carnahanlaw.com/net-operating-loss-nol/ https://ttlc.intuit.com/community/taxes/discussion/can-a-california-disregarded-single-member-llc-carryback-a-nol/00/1822 https://ttlc.intuit.com/community/taxes/discussion/can-a-cal... https://www.mwellp.com/deducting-pass-through-business-losses/ https://www.mwellp.com/deducting-pass-through-business-losse...

ian0 6y ago

The story of the selbees, a couple who made ~8m for themselves and their community from gaming a lottery, is a great read [0] Jon Wertheim: You saved all the losing tickets? Marge Selbee: Saved them in big totes. Jerry Selbee: Big plastic totes. Jon Wertheim: There must have been millions. Jerry Selbee: 18. Jon Wertheim: $18 million worth of losing tickets. And you have those? Jerry Selbee: Uh-huh just in case we had a physical federal audit. Marge Selbee: We had the upstairs of the barn. I stored them in one end and in the other end. And then I thought, "Oh no, this floor is gonna fall through." So then we stored them down in the pole barn. And we had probably 60, 65 tubs of tickets. [0] https://www.cbsnews.com/news/jerry-and-marge-selbee-how-a-retired-couple-won-millions-using-a-lottery-loophole-60-minutes-2019-06-09/ https://www.cbsnews.com/news/jerry-and-marge-selbee-how-a-re...

neal_jones 6y ago
That story is awesome
crucialfelix 6y ago
My grandpa had 4 or 5 huge garbage bags full. On his death bed he whispered to me and I had to go out and buy the numbers for him.
piracy1 6y ago
Why would they need to keep them? Did they buy them with cash or something? Wouldn't the credit/debit transaction be good enough to prove you bought it?
- sjs382 6y ago
  Maybe not everywhere, but in some states you need to pay for lottery tickets with cash.

Jdjdjdjjdhebe 6y ago

Maybe just boring old school money laundering?

chewz 6y ago
Money laundering would rather work different way. Someone who gets winning lottery ticket instead of claiming the prize himself sells it for a double to other guy who needs to legalize his income. In other variant the ticket is sold to someone who later uses it to pay a neat bribe... This is a rational move if one wants to increase his wining and possibly to make it tax free in return for taking a little additional risk.
whimsicalism 6y ago
Why would you use Princeton grads? And money laundering this way has got to be hella inefficient, no?
- akhilcacharya 6y ago
  It's definitely not money laundering, but are Princeton grads too good to be involved in illegal activities? What a weird statement.
  - alisonkisk 6y ago
    Rich people don't need to risk their wealth by signing up to be mules.
  - whimsicalism 6y ago
    Too good to be the mules, yes certainly.
    - akhilcacharya 6y ago
      There was a Columbia undergrad that was charged with joining ISIS, this is a silly argument.

prvc 6y ago

>Even if the group developed a system for using public information to improve their odds, experts expressed skepticism that it could result in reliable profit. My hunch is that winning tickets are not in fact equally distributed, and they have discovered something regarding this. Going by already claimed prizes gives some information, and I am sure there's a decent way to model the relationship between the set of claimed tickets to that of the unsold winning tickets (to account for the "safe-deposit box" cases mentioned in TFA, which strikes me as a bit of a red herring).

jerome-jh 6y ago
Actually the winning tickets ARE equally distributed. They are not randomly distributed. Every roll/batch has the same number of small and mid-prices, let say under 5k$ to 10k$. As for the big prices they take care that they are evenly distributed across the country and over the lifetime of the game. A smaller scale trick is to social engineer the cashier to know which rolls have already released their prices, and buy from other rolls. Cashiers often tend to naturally do this with there best customers.

jb775 6y ago

My guess is they figured out who prints the lottery tickets, then gathered data on the ticket ID numbering system produced by that printer in the past(winner vs loser ticket ID's), then trained that data via deep learning to figure out probabilities of jackpot likelihood for each ticket ID # (or by range of numbers), then figured out the historic distribution patterns in relation to the ticket ID #'s, then pinpointed the specific places actually selling those ticket ID's, then drove to West Bumblefuck and bought all those tickets.

toast0 6y ago
That's the nefarious solution. The brute force solution seems to be use published redeemed winning ticket numbers to estimate sold ticket numbers? And then run expected value calculations of the unclaimed prizes vs the unsold tickets; if positive enough, go out and buy as many tickets as you can, process them and claim the winners (and enter any second chance drawings). Of course, if people delay claimimg prizes, it makes the estimates inaccurate.
rm445 6y ago
My guess would be employee fraud. Nothing against the people mentioned in the article, just where I'd start looking. There are umpteen posts in this thread already about potential interesting ways to game lotteries, but the historic way to get an edge is to have an insider.

Thorrez 6y ago

>The manager said they paid with cash or cashier's checks, and they weren't just buying at Break Time. Couldn't they pay with credit cards and get credit card rewards to help their margin?

tempestn 6y ago
Generally credit card companies consider lottery purchases to be cash advances, if they allow them at all.

fortran77 6y ago

It hints at the method right here: > Lottery officials said there is nothing wrong with players using data about the number of prizes outstanding during the lifetime of scratch-off games, which is regularly updated online So not really news. It's just a group of people had the nerve and initiative to do it and hope that the math works they way they expect.

dorchadas 6y ago
And the money to go buy some pricey tickets; if I had a dad who was a rich businessman who could probably support the first round, I'd totally do something like this too.

howlgarnish 6y ago

An (IMHO) more interesting story of somebody actually "hacking" the lottery (well, scratch cards): https://www.wired.com/2011/01/ff-lottery/ https://www.wired.com/2011/01/ff-lottery/

deleted 6y ago

[deleted]

n0nc3 6y ago

Rules to one of the mentioned lotteries. [0] It looks like prize counts are fixed in advance, so any information about redemption changes odds. Blacklight also shows that the lottery website is riddled with trackers, so it is possible they are inferring redemption from advertising data. [0] https://hoosierlottery.com/getmedia/33f6f7bf-f0e6-4265-bcbe-d4153b498b3b/2090-7million-mega-cash-rules.pdf https://hoosierlottery.com/getmedia/33f6f7bf-f0e6-4265-bcbe-...

lordnacho 6y ago

Quant guy here. This boils down to information about the game, and maybe tax laws. You have a load of scratch cards out there, most of them duds. If you come to a situation where a prize hasn't been claimed and there's few cards left to be sold, it's like counting Blackjack cards, the odds might change in your favour, or in favour of everyone who buys any ticket. If that happens you need to do a bit of optimizing risk, assuming you have a limited amount of money to potentially lose. Kelly Criterion will have something to say here. It really depends a lot on the details of the game. Are prizes rolled over if nobody found a winning card? Do cards expire? Is there a bulk buying discount? What is the nature of randomization? Does every region get its own guaranteed share of winners? And crucially, is there information released about the progress of the game? This is maybe the toughest bit to figure out. With quant hedge funds you get this thing where you have to do a lot of asking questions about how the data was collected, to ensure your assumptions hold. Tax I mentioned since it seems they formed a limited company. That's a whole game in itself, played by many many corporate entities in differing situations. You'd need to understand that as well. I know some traders whose entire jobs depend on understanding the difference between the tax codes of different countries.

refurb 6y ago
I have no doubt you can get information that drastically increases your odds. A long time ago, I worked for a retailer who sold lottery tickets. In order to sell tickets, I had to attend a government training session, at the actual government lottery center, which educated me on the different games and how they worked. It was probably the most interesting thing about the retail job. The people doing the training were the ones that either designed or managed the games and payouts. Some were near the end of the their career and were happy to share the history of the games and the ups and downs of managing them. I distinctly remember a couple tidbits where even my teenage mind went "well that's pretty relevant information to someone looking to game the lottery". 1. There was one game where the gov't actually decided to end the lottery because nobody ever won. The number of digits, the total possibilities and the number of people who actually bought tickets meant nobody ever won. So the gov't shut it down, but then players complained that they loved the game so much, so they started it back up. Still nobody won. 2. Scratch off tickets were sold in foil sealed packets of 20 tickets. The trainer dropped that there was always one winning ticket per pack, and only one. I had assumed that winning tickets were randomly distributed - some packets might have none, some might have 2 or 3. Nope, just one per packet. Now as the person selling the tickets, that's kind of important. I never mustered the energy to actually pursue it, but you could imagine how that could drastically increase your odds of a winning ticket.

harrygeez 6y ago

This kinda reminds me of MIT Blackjack Team

cryptica 6y ago

Probably just another scheme for rich daddies to launder money to their spoiled kids without paying tax. Making money these days is all about having a rich daddy, rich mommy, sugar daddy or sugar mommy. Gold diggers are the closest we have to 'self-made' these days.

BMSmnqXAE4yfe1 6y ago

Such a pity young capable people spend their most productive years doing something entirely unproductive. And one more thing. Are they winning with scratch cards only? Then it could be that they are utilizing some equipment to look through the paint, with accomplices in a ticket factory or distribution chain.

ahelwer 6y ago
There are endless things I could do with my free time that would be far more productive & useful to society than anything I could realistically be paid to do. Having lots of money would enable me to do those things.
krimpenrik 6y ago
Making (probably) millions you find unproductive?
- ausbah 6y ago
  economically unproductive I think is what they meant, you could say society is a lot when their talents are used for gambling vs something like scientific research
  - MaxBarraclough 6y ago
    What about high-frequency traders? Profitable, technically challenging, but in a very real sense entirely pointless and contrived.
    - ausbah 6y ago
      I meant to add finance as a good example of what I meant, including HFT. basically just saying that while individually people benefit from working in these schemes, the broader economy arguably benefits little to even negatively
    - toast0 6y ago
      HFT isn't my cup of tea, but the rise of HFT has certainly narrowed spreads and contributed to zero comissions; and I apprechiate those effects.

jgbond 6y ago

There’s a whole chapter in the popular mathematics book “How to Not Be Wrong” by Jordan Ellenberg that covers successful lottery strategies and the math behind them. As I recall from the book, the basic strategy was very simple and had a few groups of practitioners. Optimizing for increased incremental returns was far more sophisticated, though. There were also the operational challenges of buying and tracking so many tickets.