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(Boston.com)   Massachusetts lottery officials knew one game was dominated by gambling syndicates who found reliable way to win, with one official asking "How do I become part of the club when I retire?"   (boston.com) divider line 51
    More: Interesting, Massachusetts Lottery, Cash WinFall, state lottery, officials knew, inspector generals, compliance officers, independent study  
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8681 clicks; posted to Main » on 31 Jul 2012 at 10:52 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-07-31 07:06:09 AM
The officials should be told. You're already part of the club. You're going to jail!

// RICO, RICO, RICO
 
2012-07-31 10:18:53 AM
This is just the sort of state government who should be overseeing casinos.

Which can start operating in Massachusetts next year.
 
2012-07-31 10:46:45 AM
They played the game and won.

And...?
 
2012-07-31 10:57:18 AM

Calmamity: They played the game and won.

And...?


It's not about the players (kudos to them!), it's about the lottery officials who bent the rules to allow the players to keep gaming the system. Even if nobody violated the law, they certainly violated the spirit of the lottery, and someone should have raised a red flag about it.
 
2012-07-31 11:00:26 AM
...spending $40 million on tickets over a seven-year period and winning an estimated $48 million.

...

"Revenues were tremendous and the lottery benefited, but there were practices that were not appropriate and things done that were not rignt,"

Say what?
 
2012-07-31 11:01:02 AM
Mass Democrats:

Yes, we are corrupt as holy hell.

Watchagonnadoaboudit?
 
2012-07-31 11:02:58 AM
Massholes are corrupt.
This is not news.
 
2012-07-31 11:04:15 AM
Good story. I was just wondering about Mitt Romney, "How the hell did this knucklehead ever become governor of Massachusetts? Now I know. Thanks, Fark!
 
2012-07-31 11:05:01 AM
They apologized. All's good. Move along.
 
2012-07-31 11:05:52 AM
Every major lottery is corrupted. Since, like, ever. Scandals are fairly regular but generally not hyped, for some mysterious reason. Frankly, if you play the lottery, it doesn't much affect your chances of winning. If you don't play, it doesn't much affect you at all.

Should've had the Obvious tag.
 
2012-07-31 11:07:31 AM

Snarfangel: ...spending $40 million on tickets over a seven-year period and winning an estimated $48 million.

...

"Revenues were tremendous and the lottery benefited, but there were practices that were not appropriate and things done that were not rignt,"

Say what?


These individuals playing the game won, but the game itself over the entire population probably made a profit. But yes, the lottery really didn't benefit unless these wins somehow encouraged others to play who wouldn't have. Realistically if this game didn't exist players would have just played a different game. The state didn't make money here.
 
2012-07-31 11:09:21 AM
Holy shiat! You mean those emails I constantly receive about lottery systems that guarantee profits, MIT professors making millions, and offering to let me in on the secrets are ALL REAL??
 
2012-07-31 11:10:24 AM

Snarfangel: ...spending $40 million on tickets over a seven-year period and winning an estimated $48 million.

...

"Revenues were tremendous and the lottery benefited, but there were practices that were not appropriate and things done that were not rignt,"

Say what?


The $40 mill is just what this group spent. Double that to account for the average Joes playing every day or week or whatever and it more than makes up for the $8 mill in winnings the group raked in.
 
2012-07-31 11:10:41 AM
MIT grads playing the Lottery? They must really suck at math.
 
2012-07-31 11:14:42 AM

Snarfangel: ...spending $40 million on tickets over a seven-year period and winning an estimated $48 million.

...

"Revenues were tremendous and the lottery benefited, but there were practices that were not appropriate and things done that were not rignt,"

Say what?


SOMEONE had to cash out the game. It's absolutely designed to pay out a specific rate, and if it's below the rate it's supposed to be at, it cranked up the payouts until it reached the pre-described payout rate. These guys just figured out how to invest enough money at the right times to ensure they were statistically likely to be the ones receiving the payouts, and only invested when the routine was boosted. The game still pays out at the same rate, only they had a massive group of people ENSURING that if the game stalled out and no one won, they'd dump a bunch of money into and essentially claim everyone's "unwon" money. The only real problem with it is to ensure that money kept flowing in to the game, the lottery officials ignored a few of the rules protecting the rest of the public.
 
2012-07-31 11:19:59 AM
"...a handful of math and science wizards, including Massachusetts Institute of Technology undergraduates looking for an interesting school project, turned Cash WinFall into a nearly fulltime business, spending $40 million on tickets over a seven-year period and winning an estimated $48 million."

Since we now give our best-and-brightest the biggest rewards when we put them to work gaming the financial system for the benefit of the hedge fund set, this ain't nothing more than a 21st century school project. Probably looks great on a resumé.

This is the world we decided we'll let them build for us.
 
2012-07-31 11:20:07 AM
Doesn't seem like such a big deal. The ROI for the tickets wasn't that huge ($8 million profit off $40 million investment), they didn't alter the chances of anyone else winning (in fact, if anything they increased the amount that other people were winning as well). Hard to see where exactly the "problem" was. Lottery officials weren't making anything extra out of it. Seems pretty non-storyish.
 
2012-07-31 11:20:43 AM

MindStalker: Snarfangel: ...spending $40 million on tickets over a seven-year period and winning an estimated $48 million.

...

"Revenues were tremendous and the lottery benefited, but there were practices that were not appropriate and things done that were not rignt,"

Say what?

These individuals playing the game won, but the game itself over the entire population probably made a profit. But yes, the lottery really didn't benefit unless these wins somehow encouraged others to play who wouldn't have. Realistically if this game didn't exist players would have just played a different game. The state didn't make money here.


Which they absolutely did, because everyone was aware your chances of winning were boosted during the recovery phase. Pumping money into the game encourages everyone else to do so as well, but they don't have their risks leveraged across as many chances to win as these groups did. THEN a group figured out they had enough money to trigger the recovery directly AND cash in on it before the general public could be notified.
 
2012-07-31 11:22:34 AM

Bhruic: Doesn't seem like such a big deal. The ROI for the tickets wasn't that huge ($8 million profit off $40 million investment), they didn't alter the chances of anyone else winning (in fact, if anything they increased the amount that other people were winning as well). Hard to see where exactly the "problem" was. Lottery officials weren't making anything extra out of it. Seems pretty non-storyish.


That's exactly why, I think we'll find, that lottery officials didn't do anything about it until AFTER they figured out how to trigger rollovers on their own, and capitalize on them before the general public was aware of it. That actually DOES affect everyone's odds directly. It STILL wouldn't be a problem, though, if it wasn't for the fact that the lottery officials had to improperly let them use machines in order to generate the requisite number of sales in the time period necessary.
 
2012-07-31 11:25:05 AM
The more tickets you buy, the more chances you have to win. Same as it's always been.

Yes, most of us can't (or won't) put down as much money as the MIT grads did. But hey, kudos to them for figuring out a nearly guaranteed system

I don't fault the lottery officials here, either. Allowing higher sales for a lottery is something they should do. If there's anyone to blame, it's the group responsible for designing the odds on this game. Very poorly executed (if you run a lottery) when money can be made so easily.

Whether it's this game or the Powerball game, where the odds of hitting the jackpot are 175 million to 1, what's stopping someone from buying all 175 million combinations for the Powerball when the Jackpot goes above $200 million?

Only the fear of another jackpot winner is stopping what the MIT grads are doing in the one lottery from happening in Powerball. There's no fear in this lottery, because as the prize pool increases, the lower probability outcome prizes go higher. Cap the lower prizes, and this MIT gaming will stop.

Also, do we know how much taxpayer money has been lost because of this game?
 
2012-07-31 11:32:05 AM

6502programmer: Holy shiat! You mean those emails I constantly receive about lottery systems that guarantee profits, MIT professors making millions, and offering to let me in on the secrets are ALL REAL??


Yes! And allow me to introduce you to my guaranteed system to beat the Nigerian lottery. Please.
 
2012-07-31 11:32:25 AM

under a mountain: MIT grads playing the Lottery? They must really suck at math.


And winning $8 Million? Yup they sure do suck at the maths.
 
2012-07-31 11:35:41 AM
"I see this as a teachable moment, to send a message to our customers that the integrity of the lottery is of paramount importance," said Grossman.

Best line in the story... it's so paramount that they let it go on for 5 years... I wonder how much money he made?
 
2012-07-31 11:39:36 AM
I have a foolproof method to win at roulette if any of you would like to send me $50 dollars for the errorproof way to break the casinos.
 
2012-07-31 11:40:23 AM
Isn't this how the stock exchange works?
 
2012-07-31 11:42:49 AM
mainstreet62: kudos

Yeah, it's clever and all, but I think our values are farked up if we start believing that generating cash windfalls is the highest and best use of human intelligence.

Thirty years ago it's more likely they'd be working on ion implantation or microchip lithography or whatever all that shiat is that changed the world; today too many of them are helping create fortunes for a few and collapsing the economy for everyone else.
 
2012-07-31 11:45:55 AM
Corruption in the Mass government? Say it isn't so!
 
2012-07-31 11:48:51 AM
If they just waited for rolldown weeks, they would probably still be doing this, and making plenty of cash. Someone was smart enough to figure out how to force the lottery into a rolldown week, but wasn't smart enough to realize that they were pushing the system too far and were going to get noticed.
 
2012-07-31 11:53:11 AM

phaseolus: mainstreet62: kudos

Yeah, it's clever and all, but I think our values are farked up if we start believing that generating cash windfalls is the highest and best use of human intelligence.

Thirty years ago it's more likely they'd be working on ion implantation or microchip lithography or whatever all that shiat is that changed the world; today too many of them are helping create fortunes for a few and collapsing the economy for everyone else.


That's a little oversimplified, given that this is a lottery. I've seen many on Fark aptly name it "The Idiot Tax".

I generally agree with your statement. There's not a lot out there recently that would have a big benefit to overall society, like 100+ MPG cars, more efficient transportation (not necessarily cars), better education, helping poor countries advance and care for their people, etc..Finding a way to game a system is hardly good for a Nobel prize
 
2012-07-31 11:53:12 AM

MindStalker: Snarfangel: ...spending $40 million on tickets over a seven-year period and winning an estimated $48 million.

...

"Revenues were tremendous and the lottery benefited, but there were practices that were not appropriate and things done that were not rignt,"

Say what?

These individuals playing the game won, but the game itself over the entire population probably made a profit. But yes, the lottery really didn't benefit unless these wins somehow encouraged others to play who wouldn't have. Realistically if this game didn't exist players would have just played a different game. The state didn't make money here.


Except in real life, where the state absolutely made money
 
2012-07-31 11:53:58 AM

mainstreet62:
Whether it's this game or the Powerball game, where the odds of hitting the jackpot are 175 million to 1, what's stopping someone from buying all 175 million combinations for the Powerball when the Jackpot goes above $200 million?


1) Powerball tickets cost two dollars each.

2) The jackpot is divided evenly among all jackpot winners. If you bought one of every ticket combination (at a cost of 350 million dollars), if someone else wins the jackpot as well it'll cut severely into your winnings.

The difference between Powerball and Winfall is that you can't really game powerball. The odds of winning are such that you can't guarantee yourself a profit with Powerball, you're always more likely to lose money than to win money no matter how much you spend or when you spend it.

Winfall wasn't like that. With winfall, if you timed it right, and spent the right amount, you could guarantee yourself a good and easy profit.
 
2012-07-31 11:55:55 AM

JuicePats: Except in real life, where the state absolutely made money


Yeah, if the state lost money, the lottery would be instantly shut down. I posed the question earlier in the thread if the state lost money, but then realized it was a dumb question.
 
2012-07-31 11:58:33 AM

Kiwimann: mainstreet62:
Whether it's this game or the Powerball game, where the odds of hitting the jackpot are 175 million to 1, what's stopping someone from buying all 175 million combinations for the Powerball when the Jackpot goes above $200 million?


1) Powerball tickets cost two dollars each.

2) The jackpot is divided evenly among all jackpot winners. If you bought one of every ticket combination (at a cost of 350 million dollars), if someone else wins the jackpot as well it'll cut severely into your winnings.

The difference between Powerball and Winfall is that you can't really game powerball. The odds of winning are such that you can't guarantee yourself a profit with Powerball, you're always more likely to lose money than to win money no matter how much you spend or when you spend it.

Winfall wasn't like that. With winfall, if you timed it right, and spent the right amount, you could guarantee yourself a good and easy profit.


That's not true, and has been done before, for the exact same reason, with powerball games that increased in value as people purchased tickets. Once the total cumulative prizes is high enough, the risk becomes manageable. It's the total value of all winnings that has to be higher than cost, not just the value of the top prize.
 
2012-07-31 12:01:11 PM

Kiwimann: mainstreet62:
Whether it's this game or the Powerball game, where the odds of hitting the jackpot are 175 million to 1, what's stopping someone from buying all 175 million combinations for the Powerball when the Jackpot goes above $200 million?


1) Powerball tickets cost two dollars each.

2) The jackpot is divided evenly among all jackpot winners. If you bought one of every ticket combination (at a cost of 350 million dollars), if someone else wins the jackpot as well it'll cut severely into your winnings.

The difference between Powerball and Winfall is that you can't really game powerball. The odds of winning are such that you can't guarantee yourself a profit with Powerball, you're always more likely to lose money than to win money no matter how much you spend or when you spend it.

Winfall wasn't like that. With winfall, if you timed it right, and spent the right amount, you could guarantee yourself a good and easy profit.


I forgot Powerball tickets cost $2.

But yeah, that was my point. It's basically impossible to game Powerball, but not Winfall, so if it was a concern, they needed to tweak the rules of Winfall
 
2012-07-31 12:07:38 PM

Mr Guy: That's not true, and has been done before, for the exact same reason, with powerball games that increased in value as people purchased tickets. Once the total cumulative prizes is high enough, the risk becomes manageable. It's the total value of all winnings that has to be higher than cost, not just the value of the top prize.


You can't do that with Powerball, the lower prizes are all fixed amounts.

If you bought every single 5 white ball combination, you'd have spent over $10 million to guarantee yourself $1 million.
 
2012-07-31 12:09:38 PM

Mr Guy:

That's not true, and has been done before, for the exact same reason, with powerball games that increased in value as people purchased tickets. Once the total cumulative prizes is high enough, the risk becomes manageable. It's the total value of all winnings that has to be higher than cost, not just the value of the top prize.


That's an incorrect assessment because of the shared jackpot. The higher the jackpot goes, the more people play and the more money they spend. The more that people play and the more money they spend, the higher the likelihood that the jackpot value will diminish on payout to multiple individuals.

Powerball is a correctly designed lottery from the standpoint that it functions as a tax on people who are bad at math. No matter how much you spend, or when you spend it, you are always more likely to lose your investment than to win it.

Cash Windfall didn't function like that. For starters, people weren't chasing the jackpot. The jackpot has only been won once in the game's history. Rather, what happens when no one's won enough money is that the small prizes got their value increased drastically. These gambling consortiums that were buying up tons of tickets were making their profits off of non-jackpot wins. Summed up, with their increased prize values, those small wins were exceeding the cost of the tickets in value.

Do you see how they're two completely different systems yet? You can game Cash Windfall (as described above). You can not game Powerball (or most lotteries for that matter). They're designed on the front end to avoid that situation mathematically. Whoever designed Cash Windfall wasn't paying attention (or didn't care).
 
2012-07-31 12:15:38 PM
How the fark would you organize the tickets? Ok. We just bought 50,000 tickets, and there are 50 winners in there. Go find them.
 
2012-07-31 12:18:15 PM

TheGreatGazoo: How the fark would you organize the tickets? Ok. We just bought 50,000 tickets, and there are 50 winners in there. Go find them.


Most lotteries use a barcode scanner to tell you if you've won or not. I'm sure MIT students could figure out how to expedite the process.
 
2012-07-31 12:40:42 PM
How can the lottery have benefited if the gamblers spent $40 million on tickets, but collected $48 million in winnings?
 
2012-07-31 12:51:11 PM

mainstreet62: Also, do we know how much taxpayer money has been lost because of this game?


Zero. The taxpayers made money off of it.
 
2012-07-31 12:54:21 PM

Kiwimann: mainstreet62:
Whether it's this game or the Powerball game, where the odds of hitting the jackpot are 175 million to 1, what's stopping someone from buying all 175 million combinations for the Powerball when the Jackpot goes above $200 million?


1) Powerball tickets cost two dollars each.

2) The jackpot is divided evenly among all jackpot winners. If you bought one of every ticket combination (at a cost of 350 million dollars), if someone else wins the jackpot as well it'll cut severely into your winnings.

The difference between Powerball and Winfall is that you can't really game powerball. The odds of winning are such that you can't guarantee yourself a profit with Powerball, you're always more likely to lose money than to win money no matter how much you spend or when you spend it.

Winfall wasn't like that. With winfall, if you timed it right, and spent the right amount, you could guarantee yourself a good and easy profit.


Utterly false. I always love threads like this on Fark. So many retarded lefties who think they're smart and expose themselves.
 
2012-07-31 12:54:34 PM

pciszek: How can the lottery have benefited if the gamblers spent $40 million on tickets, but collected $48 million in winnings?


Probably from the millions who played the game and didn't win.
 
2012-07-31 12:57:35 PM

pciszek: How can the lottery have benefited if the gamblers spent $40 million on tickets, but collected $48 million in winnings?


More people than the one MIT group were playing.
 
2012-07-31 01:17:47 PM
Wait, 8 mil in 7 years is a good return, but I would think these guys could have gamed the stock market and done better.

TheGreatGazoo: How the fark would you organize the tickets? Ok. We just bought 50,000 tickets, and there are 50 winners in there. Go find them.


They probably get some sort of CSV file from the lotto. It sounds like they would just buy number lots from the lotto directly. Or you could batch scan and ocr them no prob.
 
2012-07-31 01:30:03 PM

Bullseyed: mainstreet62: Also, do we know how much taxpayer money has been lost because of this game?

Zero. The taxpayers made money off of it.


I already corrected myself, had you bothered to read further.

Bullseyed: Utterly false. I always love threads like this on Fark. So many retarded lefties who think they're smart and expose themselves.


Yes, because picking one political leaning over another when speaking of intelligence proves that you have it.

/rolls eyes
 
2012-07-31 01:48:14 PM

Bullseyed:

Utterly false. I always love threads like this on Fark. So many retarded lefties who think they're smart and expose themselves.


Please, enlighten us. The powerball odds are all posted on their website. Please tell us at what jackpot value, and with how many tickets purchased, Powerball becomes a guaranteed profit.

"I can't tell you, it's a secret I use to earn my living" is not a valid answer.
 
2012-07-31 01:48:53 PM

Kiwimann: Powerball is a correctly designed lottery from the standpoint that it functions as a tax on people who are bad at math. No matter how much you spend, or when you spend it, you are always more likely to lose your investment than to win it.


Sure, except it's been done before, which either just means it wasn't exactly the powerball specific game, and was something like "mega millions" or whatever. However, looking up articles on companies that have invested large sums of money to deliberately win lotteries is surprisingly difficult on google, primarily due to all the people trying to sell you some book on some lottery system promised to win.
 
2012-07-31 02:20:20 PM

Bhruic: Doesn't seem like such a big deal. The ROI for the tickets wasn't that huge ($8 million profit off $40 million investment), they didn't alter the chances of anyone else winning (in fact, if anything they increased the amount that other people were winning as well). Hard to see where exactly the "problem" was. Lottery officials weren't making anything extra out of it. Seems pretty non-storyish.


8 on 40 is a 20% rate of return. In this economy, with my funds doing what they're doing, a guaranteed 20% or so rate of return over a couple years is, indeed, "huge." I saw this about a year ago, and actually considered buying in. One of the largest companies was Australian, and when they were first coming up, they were indeed allowing buy-ins above a certain dollar value. Then a bunch of big-money people trusted the math, and just dumped whatever was needed in. The only fly in the ointment was if others played the winning # at the same time you did. It was just-about-guaranteed cash.

This is a fantastic short-term ROI.
 
2012-07-31 02:20:32 PM

6502programmer: Holy shiat! You mean those emails I constantly receive about lottery systems that guarantee profits, MIT professors making millions, and offering to let me in on the secrets are ALL REAL??


Nonsense, not one kernel of truth to the lot of them, but I have a program that can guarantee you millions from the slots! Fax me at 867-5309 to get your copy.
 
2012-07-31 03:25:14 PM
I refer to lotteries as a tax on people that are bad at math. In this case it's a reward for people good at math and good at getting people to break rules for you...
 
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