6 ms·

As long as people continue to buy tickets, why should lottery officials care? The ticket sales go into a pool after the organizers Tae a cut, and then goes back

by j2kun 11y ago

As long as people continue to buy tickets, why should lottery officials care? The ticket sales go into a pool after the organizers Tae a cut, and then goes back to the winners.

bweitzman 11y ago
Well I think the point is that it's not a sustainable system. If everybody were exploiting this loophole, it wouldn't be effective as a loophole anymore, meaning that people would stop buying tickets. Of course, not everybody can exploit the loophole, only people with at least $100k to invest in the endeavor. So this means that the government is giving an unfair advantage, in a game that is supposed to be random chance, to the wealthy. As soon as those who can't take advantage of the lottery figure this out, they stop playing. This means the loophole stops being effective and the rich drop out too.
- x0054 11y ago
  From what I understand about the system, the article is incorrect. You don't NEED to invest $100k to get a return. Investing $1,000, for instance, will also have the same probability of providing you proportionately equivalent return.
  - bweitzman 11y ago
    Well there must be some minimum, otherwise we would have seen everybody who played on the right day win, right?
  - notahacker 11y ago
    Spending lesser amounts means a higher volatility of returns. The expected return on a $1000 bet might be the same, but your chances of actually equalling (or bettering) that ROI are much lower than if you bet $100k, especially if the the prize money is concentrated at the top end. The Boston Globe article implies that the MIT syndicates bought so many tickets they actually affected the distribution of the prizes in their favour http://www.boston.com/news/local/massachusetts/articles/2012/07/31/inspector_general_says_lottery_allowed_gambling_syndicates_to_take_over_winfall_game/?page=2 http://www.boston.com/news/local/massachusetts/articles/2012... Not to mention that having even just $1000 of free cash to "invest" in a positive sum gamble already puts you in a higher income/wealth bracket than most lotteries' most loyal players.
    - j2kun 11y ago
      Actually, I think this issue was brought up in the book "How Not to be Wrong" by Jordan Ellenberg, and the MIT students eliminated risk by taking advantage of a Steiner system. So I suppose it favors the intelligent, not necessarily the rich.
- fleitz 11y ago
  lotteries primarily unfairly advantage the numerate.
- caskance 11y ago
  The sort of people who stop playing the lottery because the odds are bad were never playing the lottery in the first place.
ganeumann 11y ago
The problem is the same as that for insider trading on the stock market: it undercuts trust in the market causing a drop in the number of participants which leads to less liquidity and a less efficient market. Anyone who knew there was a way to garner the profits from the lottery, but didn't know the way, would be a fool to play.
- discardorama 11y ago
  > The problem is the same as that for insider trading on the stock market: Nope, not at all. These people are playing by the rules. The lottery officials are aware of their play; and yet don't consider it illegal. There is nothing wrong with using your superior skillset legally to make some money.
  - bweitzman 11y ago
    IMO it's not the students that are in the wrong, it's the officials. The fact that they knew about this loophole and didn't nothing to close it is tantamount to bribery if you ask me.
  - ganeumann 11y ago
    The question was why should the lottery have a problem with that, not what the law is. If you design a game--whether it's a lottery or a market--that allows some an advantage others don't have or reasonably expect to get, then that's a bad design.
    - random28345 11y ago
      It's a lottery. The masses aren't playing it because they think it's equitable, the masses are playing it because they lack critical thinking skills. As long as people think they can get rich quick, it's a good design.
  - CamperBob2 11y ago
    Isn't this the same argument that gets you thrown out of casinos for counting cards? If the game has a bug that only a few players know about, it isn't fair, by definition.

by j2kun 11y ago

As long as people continue to buy tickets, why should lottery officials care? The ticket sales go into a pool after the organizers Tae a cut, and then goes back to the winners.

bweitzman 11y ago

Well I think the point is that it's not a sustainable system. If everybody were exploiting this loophole, it wouldn't be effective as a loophole anymore, meaning that people would stop buying tickets. Of course, not everybody can exploit the loophole, only people with at least $100k to invest in the endeavor. So this means that the government is giving an unfair advantage, in a game that is supposed to be random chance, to the wealthy. As soon as those who can't take advantage of the lottery figure this out, they stop playing. This means the loophole stops being effective and the rich drop out too.

x0054 11y ago
From what I understand about the system, the article is incorrect. You don't NEED to invest $100k to get a return. Investing $1,000, for instance, will also have the same probability of providing you proportionately equivalent return.
- bweitzman 11y ago
  Well there must be some minimum, otherwise we would have seen everybody who played on the right day win, right?
- notahacker 11y ago
  Spending lesser amounts means a higher volatility of returns. The expected return on a $1000 bet might be the same, but your chances of actually equalling (or bettering) that ROI are much lower than if you bet $100k, especially if the the prize money is concentrated at the top end. The Boston Globe article implies that the MIT syndicates bought so many tickets they actually affected the distribution of the prizes in their favour http://www.boston.com/news/local/massachusetts/articles/2012/07/31/inspector_general_says_lottery_allowed_gambling_syndicates_to_take_over_winfall_game/?page=2 http://www.boston.com/news/local/massachusetts/articles/2012... Not to mention that having even just $1000 of free cash to "invest" in a positive sum gamble already puts you in a higher income/wealth bracket than most lotteries' most loyal players.
  - j2kun 11y ago
    Actually, I think this issue was brought up in the book "How Not to be Wrong" by Jordan Ellenberg, and the MIT students eliminated risk by taking advantage of a Steiner system. So I suppose it favors the intelligent, not necessarily the rich.
fleitz 11y ago
lotteries primarily unfairly advantage the numerate.
caskance 11y ago
The sort of people who stop playing the lottery because the odds are bad were never playing the lottery in the first place.

ganeumann 11y ago

The problem is the same as that for insider trading on the stock market: it undercuts trust in the market causing a drop in the number of participants which leads to less liquidity and a less efficient market. Anyone who knew there was a way to garner the profits from the lottery, but didn't know the way, would be a fool to play.

discardorama 11y ago
> The problem is the same as that for insider trading on the stock market: Nope, not at all. These people are playing by the rules. The lottery officials are aware of their play; and yet don't consider it illegal. There is nothing wrong with using your superior skillset legally to make some money.
- bweitzman 11y ago
  IMO it's not the students that are in the wrong, it's the officials. The fact that they knew about this loophole and didn't nothing to close it is tantamount to bribery if you ask me.
- ganeumann 11y ago
  The question was why should the lottery have a problem with that, not what the law is. If you design a game--whether it's a lottery or a market--that allows some an advantage others don't have or reasonably expect to get, then that's a bad design.
  - random28345 11y ago
    It's a lottery. The masses aren't playing it because they think it's equitable, the masses are playing it because they lack critical thinking skills. As long as people think they can get rich quick, it's a good design.
- CamperBob2 11y ago
  Isn't this the same argument that gets you thrown out of casinos for counting cards? If the game has a bug that only a few players know about, it isn't fair, by definition.