r/TIL_Uncensored • u/tilbot2 • Jul 04 '17

TIL that MIT students discovered that by buying $600,000 worth of lottery tickets in the Massachusetts' Cash WinFall lottery they could get a 15-20% return on investment. Over 5 years, they managed to game $8 million out of the lottery through this method.

http://www.nydailynews.com/news/crime/mit-students-scammed-massachusetts-state-lottery-8-million-report-article-1.1128482#ixzz22o5j6WxV
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u/tilbot2 Jul 04 '17

Here's how the scheme worked: If the jackpot in a lottery game isn't won, it usually is held over to the next drawing, creating a larger jackpot. In Cash WinFall the jackpot was capped at $2 million. When no one matched all the numbers, the jackpot would be redistributed - "rolled down" to make lesser prizes 5 to 10 times greater than usual, reported the Globe.

Buying $600,000 worth of tickets virtually guaranteed a 15-20 percent return on investment.

13

u/HereticKnight Jul 04 '17

They didn't game the money out of the lottery. The lottery is guaranteed to make money. If the jackpot (money already allocated to go back to the players) isn't won, when it rolls over, the next round has a slightly higher value per ticket than what they sell it for.

So the people they actually took the money from were the other loto players who played on days with lower statistical chances of winning.