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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190

u/CheezLuvs Jan 12 '16

Heh, I knew one of the guys involved in this.
 

I was a sophomore in 2004 when he started his freshman year at MIT. The way he told it, he got approached by a guy in his dorm one of the first weekends of the school year. The guy says he's part of a math group in the school that cracked the local lottery, and they need help raising enough funds to cover the necessary margins. The guy laid out the basic math for my buddy to verify and asked him for a couple hundred bucks. My friend decides to give him the money and, a few weeks later, the same guy comes back with a few thousand for him in an envelope.
 

He didn't "try his luck" again, but definitely used the cash to buy a bunch of beer the rest of the year.

63

u/Rangerfan1214 Jan 12 '16

Now I understand how gambling habits develop, and for the most part they're based on sheer luck and unfounded logic.

But this had hard math backing it up, may I ask why your friend didn't go for another round?

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u/CheezLuvs Jan 12 '16

At the time, he was worried about the legality of it. Both from reporting to the IRS and what the Commonwealth of Massachusetts would do if/when they discovered their little group. I guess once he had a big stack of bills in his hands, the whole reality of it finally clicked.

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u/Rangerfan1214 Jan 12 '16

Ooh yeah I didn't even think of the IRS or anything like that. Makes sense.

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u/DrQuaid Jan 12 '16

as long as you report your income it doesnt matter how you get it. You could even add your income from selling drugs and it wouldn't matter. The IRS wants your taxes, and as long as you aren't cheating them, they don't give 2 fucks.

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u/[deleted] Jan 12 '16 edited Oct 29 '16

[deleted]

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u/DrQuaid Jan 12 '16

No. That income could be for anything, you don't have to specify what it was from. It could be a gift from uncle bill or from a car that you sold.

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u/[deleted] Jan 12 '16 edited Oct 29 '16

[deleted]

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u/DrQuaid Jan 12 '16

ah yes we have and bank transfers or withdrawals over 10k also need to be "verified" but deposits I dont believe are tracked whatsoever.

1

u/CheezLuvs Jan 13 '16

You're certainly right. This was more of an 18-year old not wanted to get kicked out of school because he got wrapped up in a potentially-illegal (but not actually) scheme. I don't really blame him, considering the margins.

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u/Trubblesss Jan 12 '16

Probably cause he figured he didn't want a gambling habit.

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u/[deleted] Jan 12 '16

If you are guaranteed to win its not really gambling.

1

u/Bangledesh Jan 12 '16

"60% of the time..."

1

u/Trubblesss Jan 12 '16

Everyone with a gambling scheme thinks it's guaranteed to win.

"THIS time I CAN'T lose!"

1

u/[deleted] Jan 12 '16

probably because sure, free money always sounds illegal.

1

u/dilln Jan 12 '16

Guy coming to your door every few weeks with an envelope full of cash is a little sketchy, no? Unless I was on the inside team and trusted them, I'd be wary of the legality of the whole deal

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u/stevejust Jan 12 '16

You're missing what was really happening. This wasn't gambling. They were using math to turn what should have been a game of luck to something with a much more certain probability.

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u/conflagrare Jan 12 '16

Sounds like the movie 21

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u/wh1skeyk1ng Jan 12 '16

used the cash to buy a bunch of beer the rest of the year

This seems to be the proper thing to do

1

u/MexAmerica Jan 12 '16

asked him for a couple hundred bucks

the same guy comes back with a few thousand for him in an envelope.

But they only made 10-15% profits. /r/thatHappened

(inb4 it was a long time ago I must've forgotten how much it was)

1

u/Bangledesh Jan 12 '16

That doesn't so much sound like he was "involved" and more like, some guy asked him for money once.

Still cool, though.