How MIT Students Scammed the Massachusetts Lottery for $8 Million

[Tony_FLADEM]

Maybe Uncle Ben was right: With great power comes great responsibility. While most students at the famed Massachusetts Institute of Technology use their powers for good, for example creating drugs that can fight any virus, others are busily using their prodigious math skills to game the state of Massachusetts’ lottery system, earning millions of dollars in the process.

Several years ago, while doing research for a school project, a group of MIT students realized that, for a few days every three months or so, the most reliably lucrative lottery game in the country was Massachusetts’ Cash WinFall, due to a quirk in the way a jackpot was broken down into smaller prizes if there was no big winner. The math whizzes quickly discovered that buying about $100,000 in Cash WinFall tickets on those days would virtually guarantee success. Buying $600,000 worth of tickets would bring a 15-20 percent return on investment, according to the New York Daily News.



Read more: http://newsfeed.time.com/2012/08/07/how-mit-students-scammed-the-massachusetts-lottery-for-8-million/#ixzz22sE2GXrK

[Scuba]

1. Lotteries are a tax on folks who are bad at math....

... and a con for those who are good, and have a stake.

[1StrongBlackMan]

3. True ...

But who, among us, has not fantasized what it would be like to come across a fantastic fortune? And if, the cost to realize that fantasy is a buck or two ... Why not?

[Scuba]

4. I buy a ticket now and then. I account for it in my entertainment expense budget....

... and daydream about financial security for my family and a foundation to help folks in poverty.

Sadly, I see a whole lot of folks buy a whole lot of tickets that I know for a fact they can't afford.

[RKP5637]

6. I do the same, buy one once in a while, just on that wild chance. n/t

[1StrongBlackMan]

17. True. n/t

[DiverDave]

28. I do too

when I can afford a few bucks.
When the inevitable snotty person tells me I'm just throwing away my money
I ask them how much does a movie cost? and how long does it last?
for just a few bucks I can daydream for a couple of days on what I would do
with all that money.
Great bang for my entertainment buck.
And pretty much shuts up the snots.

[coalition_unwilling]

5. Classic case of a 'sucker bet' but I'm with you. It's like the Big Wheel

game in the casinos. Deep down, you know the vig is horrible but it's so much friggin' fun to do it just once or twice

[1StrongBlackMan]

19. I completely agree ...

Speaking of "sucker bets" ...

Living in Tucson, I am within 40 minutes of 4 Casinoes. Every couple of weeks Mrs. 1StrongBlackMan and I spend a couple hours (and dollars) in them.

Once, BabyGirl 1StrongBlackMan asked, "Dad ... Why do you go to the casino? It's like meeting someone on the street who says, 'Hey, if you give me $100, I MIGHT give you $10,000; but then again, I PROBABLY won't give you a penny!'"

I laughed at the absurd truth in the statement ... and told her to go to bed!

[RKP5637]

2. Pennies in the scheme compared to wall street and the banksters. n/t

[Poll_Blind]

9. Reducing one crime's significance in relation to another is a slippery slope but you've got one...

....hell of a good point there. Really. The manipulation of currencies, precious metals. The manipulation of balance sheets and assets. And what cannot be covered up can be ameliorated through bought and paid for politicians writing bespoke legislation. It makes a story like this pale in comparison. Of course, stories like this unintentionally cement the idea that bigger, grander and far more abusive manipulations aren't going on all the goddamned time on a corporate and banking level- which, they are.

PB

[RC]

7. Oh great. Now everyone knows about this and will be doing the same thing.

Thanks a lot for spreading the word.

That said, It doesn't look like a scam to me. The students just found a flaw and exploited it. They did nothing wrong. It is up to whoever runs the lottery to fix the quirk.

[ManiacJoe]

8. Where does the scam part come in?

There is no scam is buying enough tickets to move the odds more into your favor. Groups have been doing that for decades.

[Poll_Blind]

10. Though I indirectly referred upthread to what the students did as a crime, you're right.

PB

[Gormy Cuss]

14. Yeah, calling it a 'scam' is a great way to make it look like they did something wrong.

It's just like card counting. Casinos hate math. Apparently lotteries do too.

[Buns_of_Fire]

16. Come to think of it, it was also the MIT folks who excelled at card counting, too...

http://www.mitcardcounting.com/

These people are scary smart.

[Alduin]

11. I see nothing wrong with this.

Hell, even the law says it's not illegal.

[surrealAmerican]

12. It sounds like Massachusetts ...

... needs to hire a new mathematician to manage its lottery odds.

[hedgehog]

18. Someone is going to win the lottery sooner or later,

the prize pool just keeps getting larger until someone wins.

[closeupready]

20. Massachusetts MADE money on the game.

nt

[surrealAmerican]

22. I see you are correct ...

... but I also wonder if profitability for the state should be the only criteria used in designing a lottery.

[closeupready]

23. Sorry, I didn't mean to imply that I agreed with the decision to

continue running a game that had been cracked. When/if it became clear to lottery officials that the game was flawed, then it should have been either shut down or corrected immediately. To continue running such a game is tantamount to aiding the exploitation of disadvantaged players, thus reducing published odds.

That said, I also see nothing wrong in what the students did, from a player's perspective.

[Poll_Blind]

13. Worth reading the whole article- great twist in the last 3 paragraphs. nt

PB

[Nye Bevan]

15. Smart kids. Good for them (nt)

[goclark]

21. My father was a big gambler

and our family went to Vegas all the time.

He would win at least 90% of the time.

His theory was -- " If you don't bet, you can't win."

When he rolled the dice, the table was magical!
Other players would wait for him to get to roll again.

[closeupready]

24. Did he ever get banished? I know of some

professional gamblers who have been banned from Vegas casinos, though I believe casinos in Atlantic City are prohibited, by law, from banning players who are merely lucky.

[goclark]

25. Nope, never got banished....

In fact, the hotel would " Comp" our rooms

Another part of the story is that my dad was a physician and African American.
AA's were not allowed to go to Hotels on the Strip, only down town.

One of my dad's friends knew the head Bellman and he got the management of the hotel to invite about ten physicians to come to the hotel with their families.

It was a day to remember!

We were dressed up ( hats, gloves, fancy clothes) and the families formed a long line. The bellman was so thrilled when he opened the door for us -- tears were running down his cheeks.

From that day forward, we were warmly welcomed and that is how African Americans got into Vegas Hotels.

[SidDithers]

26. Why did you add the word "scammed" to your title?...

It's not used in the title of the Time article.

There was no scamming involved, just good data analysis, statistics and probability. The students did nothing illegal.

Sid

[Tony_FLADEM]

29. I copied the title from the article. They must have changed it.

[GodlessBiker]

27. Bogus OP title! Original story says "won" not "scammed."

You should be ashamed.

[Tony_FLADEM]

30. They must have changed it. I copied the OP title from the article.

[Iggo]

31. They probably caught the same flack you're catching.

[goclark]

32. Welcome to DU

Things like that happen around here ~ thanks for posting the article.

[CreekDog]

33. Wrong. It's not a "scam" if you figure out how to win the game while following the rules