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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, meanin

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.

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.