Are you one of those people who roll your eyes whenever you see the lottery advertised on TV? Seems no matter where you are in the world lotteries are advertised in exactly the same way; they always emphasize the fact that “it could be you”, but only if you enter. Of course this conveniently ignores
Are you one of those people who roll your eyes whenever you see the lottery advertised on TV? Seems no matter where you are in the world lotteries are advertised in exactly the same way; they always emphasize the fact that “it could be you”, but only if you enter.
Of course this conveniently ignores the obvious fact that, statistically-speaking, it won’t be.
Take PowerBall, the US lottery that currently holds the world record for the biggest jackpot of all time ($1.58 billion).
The odds of you winning that are one in over 292 million, which is so infinitesimal you might as well not bother playing at all and just save your money.
Of course I’m not their target demographic, I’m not one of those starry-eyed “one day I’ll win the lottery” people. Let’s call them Group A.
I belong in Group B, one of the millions of rationally-minded individuals who see those astronomical odds and think, “there’s no way!”
But then there’s the third type of person, a very rare breed, admittedly, let’s call them Group C. And although Group C shares many traits with Group B, their conclusions differ dramatically.
While we of Group B see the lottery as folly, the mathematically-minded challenge junkies in Group C look at those staggering odds the same way an adventurous mountain climber might view K2 – no matter how high and difficult it may be, it can be conquered!
One such person was Voltaire, one of the most influential and, often times, controversial thinkers of the French Enlightenment.
A gifted writer and polymath, Voltaire’s liberal views on racial equality and his repeated condemnation of Church and State put him at odds with the rigid, patriarchal power structures of the time. As a result, he often ran foul of authorities, spent time imprisoned in France’s infamous Bastille and at one point was forced into exile in Britain.
Just under three years later Voltaire was able to return to Paris, where, alongside a mathematician named Charles Marie de la Condamine, hatched a plan that would secure him enormous wealth while also humiliating the French establishment which had persecuted him.
The government, at that time, was in serious financial difficulty and this was having a knock-on effect on their ability to issue bonds. The city of Paris needed a way to bolster the value of its bonds and so the finance minister, Michel Le Pelletier Desforts, suggested they run a parallel lottery. The proceeds would then be used to bolster to the shortfall in bond value.
“Genius!”, though the French government.
“Au contraire!”, thought Voltaire.
The lottery was run throughout Paris, but the value of bonds differed by district. So by linking the cost of bonds and lottery tickets together, this meant that it was significantly cheaper to buy lottery tickets in one district, compared to others.
Once they crunched the numbers it soon became apparent that all Voltaire and his syndicate had to do was buy up all the tickets in one district and corner the market completely.
Eventually Voltaire and his associates were brought to court, but the case was thrown out since it was ruled that they had done nothing illegal. So Voltaire was allowed to keep his vast wealth which, even in today’s money, would make him a multimillionaire.
Not content to rest on his laurels Voltaire used his money to invest in new ideas and industries, but that didn’t mean he became one of the aristocracy, on the contrary he continued to live, as he always did, provoking the rich and powerful – except now he was never in short of getaway money.
Luck of the Polish
Ok, I know what you’re thinking; nice story but what relevance does it have today? You can’t compare a bunch of bumbling French bureaucrates from the 1700s to contemporary lottery operators!
Today we have professional organizations with racks of computing power and legions of statisticians – surely nothing can slip past them!
Well not quite. In recent times we’ve seen numerous “lottery hacks” successfully beat these so-called unassailable systems for huge profits.
In 1992, for example, a Polish-Irish accountant formed a syndicate which managed to brute force the fledgling Irish Lottery, making off with millions.
Dublin native Stefan Klincewicz had been keeping a keen eye on the Irish Lotto which, at the time, was only four years old. Ireland being a small island with a relatively low population the operators felt it made sense that it was only a 6/36 game.
What Klincewicz realized, however, was that, due to the low odds and similarly low ticket price, once the jackpot rolled over to reach a certain value, a brute force attack would suddenly become profitable, allowing his 28-strong syndicate to bulk-buy tickets just like Voltaire done.
This gave them a massive 80% of winning tickets for a cost of just under £900,000IRL (this was several years before the adoption of the Euro) before officials finally realized what was happening. Of course by then it was too late. But in an ironic twist of fate one non-syndicate member also had a winning ticket, so the eventual jackpot was split. (Today the Irish Lotto is a much tougher 6/47 game, and the price has been increased several times.)
Meanwhile, across the pond, lotteries in North America were set to receive a similar fate, starting in Virginia where, in 1992, a group of Australians brute forced the state lottery, buying up a total of 7 million different number combinations before making off with $27 million. Of course in this instance the amount of syndicate members was much higher, 2,500 in total, meaning they each received just over ten grand – still, not bad for a days “work”, eh?
Now it’s one thing to spot something and take advantage of it, it’s quite another, however, when the game designers are aware of a flaw, but decide not to do anything about it. This is what happened in 2012 when a bunch of MIT students discovered that brute force ticket buy would always result in a profit of between 15 to 20%. Time and time again they milked the lottery but the weird thing this time, though, was that the Massachusetts State Lottery had also known this for seven whole years but hadn’t bothered to do anything about it! Only after the syndicate won a huge jackpot did they decide to take action and discontinue the game.
Another MIT alum, Mohan Srivastava, was somewhat more sporting when he discovered a glaring flaw in a tic-tac-toe scratchcard game. The scratchcard had actually been purchased for him as a joke and turned out to be a winner, earning him $3.
Anyone else would probably have enjoyed the little win for what it was on the surface, but Srivastava was not an on-the-surface kind of guy.
The Toronto-based statistician specialized in geology and mining, specifically how to locate the spread of precious mineral deposits deep underground. He began thinking about how he could apply the same principals to scratchcards. Turns out there was an underlying pattern to how the cards were printed allowing him to predict winners in 19 cases out of 20. But, unlike the others in this story he decided not to take advantage and instead reported his findings to the lottery operators who promptly removed the game from circulation.
Would you have done the same? Let us know in the comments below!
Hacking Through Your Wallet…
Another question, if I had a way to beat the lottery would I tell you?
Who’s the say I haven’t already!
Well, honestly, I don’t claim to be as smart as Voltaire but perhaps you can find a flaw in the probability of your local lottery game and take advantage just as he did.
In order to “hack” the lottery you need five simple ingredients
- You need a low-odds lottery that has rolled over to a large jackpot
- You need the ticket price to also be quite low
- You need to have a syndicate of like-minded individuals ready to put up the significant cash involved in order to make it work
- You need to be fast, and highly coordinated to make sure the operators and vendors don’t know what’s happening before it’s too late
- And you still need a lot of luck!
Let’s not forget that, for all his meticulous planning for years, the one thing Stefan Klincewicz hadn’t counted on was someone else having the exact same numbers. Splitting a fraction of the jackpot with a syndicate isn’t quite like splitting the whole thing – and at some point there’s the danger that fraction will be less than the amount of the syndicate’s investment!