Saturday, August 04, 2012

Markets in Everything: A Private Lottery in Massachusetts for Skilled Gamblers

The Boston Globe reports on "A game with a windfall for a knowing few: High-rolling gamblers are exploiting a quirk in Cash WinFall, raking in huge profits every 3 months as the Lottery looks on":

"For a few days about every three months, Cash WinFall may be the most reliably lucrative lottery game in the country. Because of a quirk in the rules, when the jackpot reaches roughly $2 million and no one wins, payoffs for smaller prizes swell dramatically, which statisticians say practically assures a profit to anyone who buys at least $100,000 worth of tickets.

During these brief periods - “rolldown weeks’’ in gambling parlance - a tiny group of savvy bettors, among them highly trained computer scientists from MIT and Northeastern University, virtually take over the game. Just three groups, including the Selbees, claimed 1,105 of the 1,605 winning Cash WinFall tickets statewide after the rolldown week in May, according to lottery records. They also appear to have purchased about half the tickets, based on reports from the stores that the top gamblers frequent most.

"It’s a private lottery for skilled people,’’ said Secretary of State William Galvin."

HT: W.E. Heasley

3 Comments:

At 8/04/2012 10:44 AM, Blogger Buddy R Pacifico said...

From the Boston Globe article on the WindFall private lottery:

"Mark Kon, a professor of math and statistics at Boston University, calculated that...

Bettors like the Selbees, who spent at least $500,000 on the game, had almost no risk of losing money, Kon said."


and the reaction from the Mass lottery :

“This is generating income for us..."

Lotteries are for suckers but is this one legal?

 
At 8/04/2012 2:10 PM, Blogger Ron H. said...

Buddy

"Lotteries are for suckers but is this one legal?"

I can't imagine why not. These clever people are buying lottery tickets - period. Nothing wrong with that, in fact as noted, it generates income for the system.

The danger might be that the millions of suckers who make this scheme possible will realize they are just handing their money to clever rich people and stop doing it.

 
At 8/04/2012 9:55 PM, Blogger juandos said...

How about a chuckle instead?

Massachusetts: A State Lottery Shows Its Corrupt And Irresponsible Core

A group of science and math whizzes, many of whom had MIT credentials, formed a gambling syndicate to beat the lottery, and did, generating almost $8 million in winnings after exploiting a flaw in the lottery rules to execute a system that virtually guaranteed profit. Their domination of the lottery continued over seven years, and was known about by lottery officials, who did nothing. Why? Because the money was coming in, and they didn’t understand that they were facing a net loss....

 

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