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Question: How can he be right about the estimated value of a ticket when the number of buyers is unknown? Should the game not swing back once the "hack" is made

Question: How can he be right about the estimated value of a ticket when the number of buyers is unknown? Should the game not swing back once the "hack" is made public?

kyleblarson 6y ago
Assuming they sold lotto tickets at their convenience store and that the couple actually worked at the counter, they could probably get a pretty solid gut feel for the relative demand of each drawing based on the number of tickets they sold.
toast0 6y ago
My (general) understanding is in these lotteries, whenever there's a rolldown, all tickets are positive EV, regardless of the number of tickets bought. Although, it certainly would get slim if the number was very high. I think there were three known large scale buying groups for the MA rolldown lottery? The exciting technique was determining when your buying could trigger a rolldown, possibly without it being previously announced.
- lazyjones 6y ago
  > whenever there's a rolldown, all tickets are positive EV, regardless of the number of tickets bought This is probably likely, but wrong in general. If the tickets cost $1 and the total prize money is composed from e.g. 50% of the ticket prices plus a fixed amount of leftover prize money, when enough tickets are bought for the rolldown round, the leftover prize money isn't enough to cover for the 50% of the new tickets that doesn't go in the pot. Example: $2m leftover money in the pot, 5 million tickets bought for $1 each. EV = $2m + 50% of $5m = $0.9 per ticket. Now, if you buy enough tickets to guarantee e.g. 4 correct numbers and know for a fact that due to a rolldown the minimum payout is going to be high enough to cover the cost of that (at least with a high probability), then you're fine. I'd assume that's what the couple in the story did.
  - choeger 6y ago
    So basically you are betting that not many other people have the same winning combination. Sounds like a good deal for the house to me.
busterarm 6y ago
You can estimate the number of buyers. You can also clock how long it takes to sell tickets at gas stations and calculate a theoretical maximum because you can get all of the selling locations.
- bryanlarsen 6y ago
  It's straightforward to calculate the number of buyers of a lotto given the before and after size of the jackpot, the number of winners of each prize and the formula by which the jackpot increases per buyer. All of this is public information, it's just that it's not known until after the lottery is over. But the number of buyers in the past is a great predictor of the number of buyers in the future for a given jackpot level.
deleted 6y ago
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Question: How can he be right about the estimated value of a ticket when the number of buyers is unknown? Should the game not swing back once the "hack" is made public?

kyleblarson 6y ago

Assuming they sold lotto tickets at their convenience store and that the couple actually worked at the counter, they could probably get a pretty solid gut feel for the relative demand of each drawing based on the number of tickets they sold.

toast0 6y ago

My (general) understanding is in these lotteries, whenever there's a rolldown, all tickets are positive EV, regardless of the number of tickets bought. Although, it certainly would get slim if the number was very high. I think there were three known large scale buying groups for the MA rolldown lottery? The exciting technique was determining when your buying could trigger a rolldown, possibly without it being previously announced.

lazyjones 6y ago
> whenever there's a rolldown, all tickets are positive EV, regardless of the number of tickets bought This is probably likely, but wrong in general. If the tickets cost $1 and the total prize money is composed from e.g. 50% of the ticket prices plus a fixed amount of leftover prize money, when enough tickets are bought for the rolldown round, the leftover prize money isn't enough to cover for the 50% of the new tickets that doesn't go in the pot. Example: $2m leftover money in the pot, 5 million tickets bought for $1 each. EV = $2m + 50% of $5m = $0.9 per ticket. Now, if you buy enough tickets to guarantee e.g. 4 correct numbers and know for a fact that due to a rolldown the minimum payout is going to be high enough to cover the cost of that (at least with a high probability), then you're fine. I'd assume that's what the couple in the story did.
- choeger 6y ago
  So basically you are betting that not many other people have the same winning combination. Sounds like a good deal for the house to me.

busterarm 6y ago

You can estimate the number of buyers. You can also clock how long it takes to sell tickets at gas stations and calculate a theoretical maximum because you can get all of the selling locations.

bryanlarsen 6y ago
It's straightforward to calculate the number of buyers of a lotto given the before and after size of the jackpot, the number of winners of each prize and the formula by which the jackpot increases per buyer. All of this is public information, it's just that it's not known until after the lottery is over. But the number of buyers in the past is a great predictor of the number of buyers in the future for a given jackpot level.

deleted 6y ago

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