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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 t

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.
- lordnacho 6y ago
  1) I guess you're saying "don't play this game" 2) That could be used quite easily if you're the guy in the shop and you encourage people to scratch right there in front of you. If it's one out of 20 you barely need any info to come up ahead, since the odds/payout is probably within a few % of breakeven and each card starts at 5% of the pack. One or two losers and the rest are worth +ve, alterntively a winner and the other 18/19 are worth even less -ve.
  - refurb 6y ago
    1) Now that I think about it, that information doesn't tell you that much about the odds. The odds can be calculated independently. Whether or not people win is kind of irrelevant to the odds. It has more to do with the number of people who play (so the odds of a winner in the group is low). I just found it interesting that the gov't was like "jeeze, nobody is winning, let's just shut it down. And the players (who never win) are like "no!". 2) Yeah, the 1 in 20 winner really jumped out at me. Open a new pack and someone scratches a winner and you know with 100% certainty the other 19 are losers. Or, you sell 15 out of a pack and all are losers (most buyers scratched right away) and of the remaining 5, you know there is 1 winning ticket.
    - skellera 6y ago
      I worked at a bar that had those stacks of pull tab cards. Random cards in the stack would give you cash that you exchanged the card for. The manager of the bar would know which ones were redeemed so if it got low and he knew the big money cards weren’t won yet, he’d go play the machine until he got it.
throwaway2245 6y ago
> If you come to a situation where a prize hasn't been claimed and there's few cards left to be sold You'd have to also account for cases where the prize-winner just hasn't scratched their card yet? (Or, as you say, whether and how this has been accurately reported) > 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 seems to make sense that they've set up as an "investment fund", since they need a bunch of cash to buy the tickets in the first place, and even more cash to reduce the fund's risk enough to get an OK from the Kelly Criterion. (In extreme cases full-Kelly can advise you to borrow cash at your own risk, but the odds have to be wildly in your favour - if they were dependent on one ticket for a net profit, that doesn't appear to be advisable)

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.

lordnacho 6y ago
1) I guess you're saying "don't play this game" 2) That could be used quite easily if you're the guy in the shop and you encourage people to scratch right there in front of you. If it's one out of 20 you barely need any info to come up ahead, since the odds/payout is probably within a few % of breakeven and each card starts at 5% of the pack. One or two losers and the rest are worth +ve, alterntively a winner and the other 18/19 are worth even less -ve.
- refurb 6y ago
  1) Now that I think about it, that information doesn't tell you that much about the odds. The odds can be calculated independently. Whether or not people win is kind of irrelevant to the odds. It has more to do with the number of people who play (so the odds of a winner in the group is low). I just found it interesting that the gov't was like "jeeze, nobody is winning, let's just shut it down. And the players (who never win) are like "no!". 2) Yeah, the 1 in 20 winner really jumped out at me. Open a new pack and someone scratches a winner and you know with 100% certainty the other 19 are losers. Or, you sell 15 out of a pack and all are losers (most buyers scratched right away) and of the remaining 5, you know there is 1 winning ticket.
  - skellera 6y ago
    I worked at a bar that had those stacks of pull tab cards. Random cards in the stack would give you cash that you exchanged the card for. The manager of the bar would know which ones were redeemed so if it got low and he knew the big money cards weren’t won yet, he’d go play the machine until he got it.

throwaway2245 6y ago

> If you come to a situation where a prize hasn't been claimed and there's few cards left to be sold You'd have to also account for cases where the prize-winner just hasn't scratched their card yet? (Or, as you say, whether and how this has been accurately reported) > 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 seems to make sense that they've set up as an "investment fund", since they need a bunch of cash to buy the tickets in the first place, and even more cash to reduce the fund's risk enough to get an OK from the Kelly Criterion. (In extreme cases full-Kelly can advise you to borrow cash at your own risk, but the odds have to be wildly in your favour - if they were dependent on one ticket for a net profit, that doesn't appear to be advisable)