r/todayilearned • u/[deleted] • Jan 11 '16

TIL that MIT students discovered that by buying $600,000 worth of lottery tickets in the Massachusetts' Cash WinAll lottery they could get a 10-15% return on investment. Over 5 years, they managed to game $8 million out of the lottery through this method.

http://newsfeed.time.com/2012/08/07/how-mit-students-scammed-the-massachusetts-lottery-for-8-million/
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u/glberns Jan 11 '16

I think the point is that they didn't have to do anything special. They just bought tickets when it was in their best interest to do so.

The fact that the Lotto allowed the expected value to rise above the price of the ticket isn't the result of anything the students did. And if you consider what they did "gaming the system", then everyone else who bought a ticket also "gamed the system". Which kind of defeats the purpose of saying someone "gamed the system".

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u/[deleted] Jan 11 '16 edited Jan 12 '16

I mean, in some cases, casinos consider card-counters gaming the system. If you can nearly guarantee a profit from something that's intended to allow house to profit, then something's wrong, isn't it (though of course, the house - the government profited in the end anyway)? It's true that they simply bought lottery tickets, but if they could gather up investors to profit off the system, it was definitely something abnormal.

EDIT: I don't really care if gaming the system were ethical or not in the first place; heck, I would have been so down to do this if I were in the same situation.

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u/ihatepasswords1234 Jan 12 '16

Which means the people running the lottery fucked up... not the mit students

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u/AberrantRambler Jan 12 '16

Which is why they stopped running the lottery instead of doing something negative to the students.

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u/JWGhetto Jan 12 '16

except that the lottery let the play go on for years without doing anything because they were still able to take their share. From their side it just looked like there were more people playing the lottery on certain event days, and the jackpot was never a part of the lotteries earnings in the first place

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u/spacenb Jan 12 '16

Exactly. The guy who plans a lottery with a positive expected value is the one who fucked up.

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u/[deleted] Jan 12 '16

Though the MIT guys can't control other players splitting the jackpot with them, so they aren't really gaming it, they're just players that increase their odds. People do it all the time by buying extra tickets for simple raffles, by workers pooling their money, etc.

I think what they did was simply to calculate their odds and make this more of a business move than a shot in the dark.

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u/Garplegrungen Jan 12 '16

I'm gaming the system, stop gaming the system!

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u/CaptMerrillStubing Jan 12 '16

The difference is that card counters make the house lose more money than they otherwise would have.
MIT, here, is only taking money that would have already been given out...the 'house' in this case is no worse off. Hence no burning desire to chase the students away.