Jerry and Marge go large (lottery hackers)

[Gamecock-YT]

http://highline.huffingtonpost.com/articles/en/lotto-winners/

 

 

This story was nuts. Long read, but worth it.

[Rod]

Interesting story. You can see a little of Warren Buffett and Ed Thorp in Jerry.

[bizaro86]

Any lottery game that carries forward prizes should eventually reach positive expected value.

 

That happens once in awhile on the lotto max lottery game in Canada, where the expected value of a ticket exceeds it's cost because of jackpot rollover. However, almost all the expected value is in the jackpot, so to capture the value you'd need to buy tens of millions of tickets, which is a logistical problem.

[Hielko]

Yeah, cool story.

 

There is no guarantee that it will ever reach positive expected value. Just the fact that the jackpot/prizes are getting bigger might also induce more and more ticket buying, and you never know how much tickets will be sold.

[james22]

Well written, thanks.

[bizaro86]

Yeah, cool story.

 

There is no guarantee that it will ever reach positive expected value. Just the fact that the jackpot/prizes are getting bigger might also induce more and more ticket buying, and you never know how much tickets will be sold.

 

That's a good point. However, for Lotto Max specifically, I have checked it in retrospect enough times that I'm reasonably confident the expected value does end up positive, and that is partially for psychological reasons as more tickets are not necessarily sold as the pot goes up, because the headline jackpot stops changing. The way Lotto Max works is the jackpot reaches a maximum, and then they keep adding additional $1 MM prize jackpot draws as more is wagered. I think that reduces additional players. The expected value is very sensitive to sharing the big jackpot (usually $60 MM).

 

I think it's interesting, but cheerfully admit its totally useless information. You'd need to buy tens of millions of tickets to ensure winning, and if you bought too many that would change the expected value as you mention. And that's aside from finding tens of millions of dollars to wager and being able to physically buy that many tickets.

[benhacker]

Yeah, cool story.

 

There is no guarantee that it will ever reach positive expected value. Just the fact that the jackpot/prizes are getting bigger might also induce more and more ticket buying, and you never know how much tickets will be sold.

 

That's a good point. However, for Lotto Max specifically, I have checked it in retrospect enough times that I'm reasonably confident the expected value does end up positive, and that is partially for psychological reasons as more tickets are not necessarily sold as the pot goes up, because the headline jackpot stops changing. The way Lotto Max works is the jackpot reaches a maximum, and then they keep adding additional $1 MM prize jackpot draws as more is wagered. I think that reduces additional players. The expected value is very sensitive to sharing the big jackpot (usually $60 MM).

 

I think it's interesting, but cheerfully admit its totally useless information. You'd need to buy tens of millions of tickets to ensure winning, and if you bought too many that would change the expected value as you mention. And that's aside from finding tens of millions of dollars to wager and being able to physically buy that many tickets.

 

Yeah, i think the amazing thing about this story was that two different lotteries had such low thresholds for waterfalling that made the economics for big pools reasonable for "small dollar" players to basically make the bet be risk free.  Interestingly, they basically immediately started crowding each other out by betting more heavily.

 

Fun story.

[DTEJD1997]

Hey all:

 

There have been rumors & stories circulating for years that there are problems with state lotteries...

 

There are several different people have "gamed" the scratch off tickets such that they can pick which ones are probably winners (not 100% accurate...but accurate enough).  One of these people was mentioned in the story, but there are others.