In the 1970s, when state lotteries were new, the Massachusetts lottery had a parimutuel payout, akin to horse racing -- whoever had the winning 4-digit number d

In the 1970s, when state lotteries were new, the Massachusetts lottery had a parimutuel payout, akin to horse racing -- whoever had the winning 4-digit number divvied up a payout. Based, I suppose, on anecdotal evidence, some guys in the Harvard physics department judged which numbers were likely to be least popular, and bet those, getting a positive return. However, this arbitrage quickly went away. It seemed that organized criminals started using the lottery as a low cost (indeed initially negative cost) way of laundering money, using a similar scheme. The upside is that this turned into a kind of state income tax on criminal income.