June 13, 2018 • 37 mins
From the Canadian professor who found patterns in Scratch-off lottery tickets to the Michigan couple that turned a lottery flaw into their retirement savings plan to the strange reason you should hold onto any lottery ticket that has Herbert Hoover's face on it, Will and Mango look into the long history of lotteries and the geniuses who've managed to game them.
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Speaker 1 (00:00):
Guess what will what's that man go? So in two
thousand twelve, this little farming village in Spain called Sodetto
was struggling and there had been this downturn in the economy.
There was also this massive drought and the town's homeowner
association was running short on cash. But for some reason
they decided to spend what was left of their dues
on the Christmas Lottery. I guess this is kind of
(00:21):
a Spanish tradition and the whole country gets into it,
but they bought tickets for the whole town. Wow. Yeah,
I've actually heard about the Christmas Lottery. I think we
wrote about it a while back, and of course it
being such a big deal in Spain. Actually saw this
one study where people were so optimistic around the time
and the Christmas Lottery, Like, even though they know they're
most likely not going to win, but that optimism actually
(00:43):
changes their opinions of politicians, and so whoever's running for
reelection at the time, even if they're overwhelmingly disliked, they
end up getting this big bounce because of this. Oh
that's crazy. But going back to this town, they were
actually really lucky. They played the village when fifty million
dollars and it got split up among the towns seventy families. Yeah, so,
(01:04):
like there were these unemployed construction workers, are down on
their luck farmers, and they all walked away like millionaires
or at the very least hundred thousand rs. But everyone
except one guy, that is. And he was this Greek
gentleman who was down on his luck. He he'd moved
to the town for a woman and they'd just broken up,
and I guess he just wasn't interested in playing and
(01:26):
losing money, So so he didn't get to cash in.
Oh man, what a bumber. So he's the only one
who didn't participate. Yeah, I mean, things ended up kind
of all right for him. Like he'd been trying to
sell his barn there and before the lottery, no one
had money to buy it. But once they did, suddenly
everyone was clamboring to purchase his barn, so he ended
(01:46):
up with a real estate deal. But today's show is
all about the lottery. How does statisticians out fox the system?
And why should you care if you find Herbert Hoover
on your lotto ticket? So let's dive in. Hey, their
(02:17):
podcast listeners, welcome to part time genius. I'm Will Pearson
and as always I'm joined by my good friend Mangesh
Ticketer and on the other side of the soundproof glass,
hunched over the fattest stack of Georgia Lotto scratchers I
think I've ever seen. I feel like he might have
bought all of them, Mango. But that's our friend and
producer Tristan McNeil. You know the other thing I've noticed,
this guy loves scratching these things, Mango. Have you been
(02:38):
watching him over here? Yeah, he actually is using this
special scratch off tool. It's shaped like a little ice craper,
but it goes on your key ring. I think he
got it off, Etsy, but I think he has it
just in case of a lot of emergencies. Well, you
never know what's going to happen, and I do wish
you luck, Tristan. But the truth is, winning the lottery
is a universally accepted long shot, like it's right up
(03:00):
there with being struck by lightning or crushed by a meteor,
except in the case of winning the lotto, your odds
are actually much much worse, you know. Yet despite that,
despite knowing, the odds are ridiculously long millions of people
around the world will still pony up for lotteries every
single year. So with that in mind, we thought it'd
be interesting to explore the psychology behind why people play
(03:21):
the lottery, including how playing changes lives. Plus along the way,
we'll check out the stories of a few enterprising gamblers
who found pretty clever ways to game the system and
beat those odds. But before we get to that, I
know you did some digging this week into the history
of lottery, so can you fill us in just a
little bit on that before we get to anything else. Yeah, So,
what's crazy is that lotteries are basically as old as arithmetic,
(03:44):
and you can actually find stories of lotteries in the Bible.
In fact, the first lotteries weren't really about winning prize
money like in the Old Testament. There are all these
references to land lotteries, and Moses actually used one to
divvy up portions of the promised land along the Jordan River.
Skulls think this worked similar to how we play powerball,
Like the tribes of Israel would have each taken a
(04:05):
differently shaped or marked stone and dropped it into a
clay pot or maybe wrapped it up in a piece
of cloth and then they would have shaken up all
the stones and drawn one for each piece of land
on the docket. But ancient lotteries also had these other uses,
Like in the sixth century BC, Athenians chose most of
their government officials through sortition, which is actually a term
(04:25):
for when political representatives are selected at random by people
casting or drawing lots. Which seems like a weird fit
for that to have been in in Athens, I mean,
like what it wasn't Athens like the birthplace of democracy? Yeah,
And and that's actually the thing, Like the Athenians actually
viewed the lottery as more democratic than elections, and they're
thinking was that, you know, politicians or wealthy citizens could
(04:48):
easily rig the outcomes of elections, and to them, sortitians
just seemed like the safer option. So while Athens did
hold elections for a few positions, the bulk of the
appointments were simply left to chance. And the way it
work was that any freeman over the age of eighteen
was entered into a lottery, and if their name was drawn,
they would either be assigned a term as a juror
or as a member of the Citizen Council. I'm curious about, like,
(05:10):
how exactly did they run this lottery. It sounds like
they were trying to sort through and pick from a
lot of people, right, Yeah, And it wasn't done powerball style.
They actually had a special device called Claritarian. It's to
help ensure that the draws were as random as possible.
And it was basically this massive stone slab and it
had these tiny slots in it for putting tokens in,
(05:34):
and each token identified a different person in the lottery.
And then they had this long tube connected to the
side of the slab, and when officials poured a bunch
of black and white pebbles into the tube, I mean,
this is ingenious. The pebbles would just scatter across the
slab and land on different tokens, and that indicated who
would receive positions and who would be dismissed. And I
don't know, it kind of feels like something out of
(05:55):
the Flintstones Prices. Right. That's pretty great. Yeah, Actually, lotteries
are so much more on when they include these weird
gadgets or honestly, these like overly complicated systems for choosing
their winners and just in doing your other digging, did
you find any other early examples of of weirdness like this? Yeah?
I mean, I think you would like the lottery style
(06:15):
game that they played in China during the Han dynasty.
It was typically played on I guess a white ticket
and players would select like a series of numbers of characters,
and if their picks were chosen in the random drawing,
then they'd be senterprize. But this is where it gets special, right,
because how do you communicate the winning numbers when all
your players are spread out across a bunch of rural villages?
(06:36):
All right, well we're talking ancient China, so I'm gonna
go with I don't know, like a fireworks display or something.
I mean, that would be so fun, right to watch
these fireworks sort of reveal the answers. But fireworks were
still a few centuries away at this point, so instead,
these Chinese governments used birds to deliver the results to villages,
Like they had a whole fleet of carrier pigeons that
(06:58):
would carry the results from village to village, and then
they'd also collect the winning tickets along the way. And
in fact, this is actually where the game got its
original name. Bige Po. I know I'm pronouncing that wrong,
but roughly translated, it's called white Pigeon Ticket. I mean
that's pretty cool. So do people still play this white
pigeon ticket game today? They do, except now the game
(07:20):
has been rebranded as Keno. They've I guess stripped the
pigeons out of the game, which feels like a major
loss to me. But Keino is still a huge money
maker for Xino's. Even two thousand years ago, the game
was this big financial windfall for China. It was supposedly
invented by a warlord who's named Chung Lung. He'd been
(07:41):
looking for a way to get citizens to help fund
his army, and selling those white pigeon tickets proved a
great way to do just that. Pretty soon the game
was being used to fund not just the military, but
all sorts of other public works projects, and in fact,
one version of the game supposedly helped pay for the
Great Wall of China. You know, that was one of
the surprising things as we were doing our research for
(08:02):
this week, was realizing how many of these huge projects
were funded by lotteries. I was actually reading just recently
about colonial America and that it was largely built using
revenue from lotteries. Like apparently, lotteries had made their way
to America's shores. I think it was back in the
sixteenth century. And this was really around the same time
that they were catching on in Europe. So I guess
(08:24):
in places like Italy and France and England they all
borrowed a page from China's playbook, because you know, they
realized that lotteries were a smart way to raise money
for these various civic projects. And so it's kind of
crazy how early it was being used in America too.
You look back around sixteen twelve, you had the Virginia
Company of London actually held a lottery to support the
(08:45):
struggling Jamestown Colony and and really used it to save
the settlers there from starvation. But it was used in
these other pittal moments to like, you know, seventeen seventy six,
you had the Constitutional Congress holding a lottery to finance
soldiers for the Revolutionary Or. And then even after the
war was one, the New States relied on these lotteries
for much more of their revenue. And you know, after all,
(09:07):
unfair taxation had been a big part of the war
so you can see why this alternative way to raise
money was so appealing to politicians. It was, you know,
just so much easier than creating a new tax. I mean,
it's funny because people often refer to the lottery as
I don't know, like like a voluntary tax. Yeah, and
you know, that's actually how one of the founding fathers
felt about lotteries too. And I'm talking about Thomas Jefferson here,
(09:30):
and he wrote a good bit about it. So once
he wrote about it, he said, um, far from being immoral,
they were indispensable to the existence of man. Their attacks
laid on the willing only. Of course, Jefferson was more
than a little bit biased in this situation. I mean
that quote comes from a letter that he was writing
to the Virginia legislature. And he was writing this because
he was looking for permission to hold his own lottery.
(09:52):
And I was actually looking into why he was doing this,
and the whole reason he wanted to do it was
to pay off some of his debts. It's pretty pretty fun.
That's pretty amazing. Yeah, But you know what's weird is
that there's this whole idea that lotteries are really kind
of this voluntary tax, right, like, it's it's only attacks
if you're willing to buy in. But there's actually pretty
(10:12):
strong evidence that suggests that long time lotto players are
induced to play a game that maybe they otherwise wouldn't,
so explain that, Like, what do you mean by that?
All right, well, it might be helpful just to give
a little bit of background on who's playing the lottery.
So I was looking at this information from Gallop and
it was showing that nearly half of all US adults
have played a state lottery at least once in their lives.
(10:34):
That's not that surprising. But then if you look a
little bit closer, the vast majority of those tickets are
bought by just twenty of the population, and as you
might guess, most of those players who make up that
are actually among the poorest in the country. In fact,
according to a study from Duke this was done back
in the nineteen eighties, the poorest third of American households
(10:56):
by roughly half of the lottery tickets that are sold.
But there's more recent data, and this is what's even
more disturbing, is that on average, households that make less
than twelve thousand dollars a year, spent a full five
pc of their incomes on lotteries, five percent of their
incomes on matters. It's it's it's pretty tragic to see that.
That's horrifying. So, I mean, there's so many things that
(11:18):
work against the poor. Like I was reading about I'm
pretty sure it was Chicago, but it was about parking tickets,
where if you get a ticket and you don't pay
in time, the price automatically skyrockets, and if you can't
pay that, they boot your car or take away your license,
which then makes it harder to get to your job
to pay that ticket. And that's actually been driving a
(11:39):
ton of bankruptcies in the city. I mean, I guess
if you're desperate and you're looking for a fast fix
for your financial troubles, like playing the lottery seems like
the quickest way out. At least that's how I think
about it. But it sounds like you're saying it's more
than that, Like these people are actually being misled or
maybe duped or something. Yeah, and you know this, this
(12:00):
actually goes back to a two thousand eight study. You
like the number of studies I'm quoting today. I'm just
grief on all these studies that came armed with them.
But this was a group of behavioral economists there at
Carnegie Mellon, and so what they were looking to is,
is it really like the reason why poor people are
so much more likely to play the lottery than those
who are better off. And what they found was that
(12:20):
a lot of the desire that drives these low income
players isn't so much from being poor as it is
from feeling poor. So here's how the studies authors broke
down their findings. It says um an experiment one, participants
were more likely to purchase lottery tickets when they were
primed to perceive that their own income was low relative
to the implicit standard. And then an experiment to, participants
(12:42):
purchased more lottery tickets when they considered non lottery situations
in which rich people or poor people receive advantages, implicitly
highlighting the fact that everyone has an equal chance of
winning the lottery. So basically, when you make people feel poor,
they played a lottery more, and when they feel like
it's equal like then then they want to put money
(13:04):
on it because they feel like it's a fair game.
I mean, it's kind of heartbreaking when you think about
how low their chances of winning actually are though, right, Yeah,
And I actually found yet another study, and this comes
from the the late age. Can have studies, I'm coming with,
so many of them have almost as many studies as
Tristan has scratch off tickets. Not quite. This one's a
(13:25):
good one too. So this was also in the late eighties,
and the researchers discovered that lottery ticket sales in California,
they rise along with the poverty rate, but movie ticket
sales actually don't. And so what that says is that
people don't just play the lottery for fun. They're they're
playing it out of desperation. So, you know, all too
often the lottery becomes a way for states to shift
(13:45):
the cost of government services from you know, from the
wealthier citizens onto honestly like the most hopeless ones. Alright, Well,
now that you've got us all righteously indignant about the lottery,
here's what I want to talk about. Nerdy geniuses who
out fox the system and made a lot of pay
out big time. All right, that sounds like a good idea.
(14:05):
But before we do that, let's take a quick break.
If you're listening to part time genius, so we're talking
about some of the most brazen lottery scams in history. Alright, Mago,
(14:26):
So let's live vicariously for a minute through some of
these Loto legends. So who do you want to talk
about first? Okay, So first I'm gonna tell you about
Moen Shivasa. He is this m I T Train statistician
who actually found a flaw in a certain scratch off
game from the Ontario Lottery and this effectively allowed him
to predict winning cards about nine of the time. Oh wow,
(14:49):
So what's his story? So Moen wasn't really interested in
playing a lot of much less exploiting it. But one day,
and this was back in two thousand three, he found
some old scratch offs on his desks that have been
part of this gag gift I guess someone give him,
and on a whim, he scratched off one and one
three dollars. So he's walking to cash in his ticket
as lunch break, and as he's thinking about it, he
(15:10):
started thinking about how scratch offs must be made right,
and it dawned on him that the tickets are obviously
mass produced, which means that a computer program must be
involved in laying out the numbers on each ticket. Yeah,
I get that, But it's all random, isn't it. Like
that's probably another reason ticket makers use a computer, because
there's no way a human could actually design that many
tickets and still keep the numbering completely random, right, Sure,
(15:33):
but Moon realized that the computers can't be generating truly
random numbers either, Like if they were, that mean the
lottery company had no control over the actual number of
winning tickets produced. And if that were the case, it
would mean that some ticket packets would have very few
winners or maybe even none at all. And obviously it
would be tough to get retailers and also players to
keep buying those tickets if so many of those cards
(15:55):
were duds. Okay, that that that makes sense. So if
the tickets like they kind of have to have the
illusion of randomness while actually being incredibly ordered beneath the surface,
is that what you're saying exactly? And once Moman figured
this out, he decided to try and crack the algorithm
that generated all those numbers, you know, just for fun,
because he was from M I. T In a statistician,
(16:17):
so he sat down to study this one tic tac
toe scratch off game he'd been playing, and after just
a few hours he discovered that the visible numbers on
the ticket actually dictated which digits were hidden under the
latex coding. So basically, every ticket had like eight tic
tac toe game boards on it, and each board would
contain some visible numbers. But if you look to see
(16:39):
how many times those numbers repeated on the card, and
mostly it was if a number was a singleton and
not repeating, you could actually tell which cards were winners,
and the prize money could be anywhere between three dollars
and fifty dollars. Okay, all right, I mean, I know
it all sounds complicated, But what I find so fascinating
about this is he's just saying momen basically found a
(16:59):
way to determine if a ticket was a winner without
having to scratch anything off. And and you're saying he
got this trick to work like nine of the time,
that must have made a fortune. So that's the weirdest part.
Moon really did this for the love of math and
not money. In fact, once he was sure his technique worked,
he actually contacted the Ontario Lottery Gaming Corporation and told
(17:21):
him about the flaw he'd found and It's funny because
he told NPR that he was playing telephone tag with lottery,
and when they finally got to talk to one another,
they kind of didn't believe him. So he sent them
twenty unscratched cards and separated them into what he thought
would be winning cards and duds. And when they scratched
them off and realized he predicted correctly, that's when they
called him back. Oh man, I bet he felt pretty awesome.
(17:43):
That's pretty wild. Yeah, I mean, he later discovered the
problem wasn't exclusive Ontario. I mean, it kind of makes sense, right.
It turned out the same trick was also being employed
in Colorado, though when he analyzed those cards he could
only figure them out with accuracy. I mean, that's still
pretty impressive. But I mean, you know, it's as nice
as it was for Owen to come clean about his discovery.
(18:04):
I feel like that's certainly not how most attempts to
game the lottery turnout. And I was just looking at
some other cases, you know, if you take the case
of Jerry and Marge Selby, for instance, And this comes
from this great story by Jason Fagoni and and we
actually had Jason on the program earlier. This year to
talk about his book. It was called The Woman Who
Smashed Codes. I mean, that was honestly one of my
favorite episodes. Is so fascinating, and my mom just bought
(18:27):
that book because she loved Jason so much. But to
tell me about the Selby's. All right, So they're from
Michigan and they were basically among the first players to
find a flaw in a state lottery game. The game
was called Windfall, and this was back in two thousand three,
and it came down to this unique quirk and windfalls rules, namely,
whenever the jackpot would rise to roughly two million dollars
or so without anybody winning it, the payoffs for smaller
(18:49):
prizes increased dramatically. So basically, if a player waited until
this so called rolldown period, which typically lasted for a
few days every three months or so, they would stay
and to win more than they lost. And of course
this is on average, and so if they were to
buy an especially high number of tickets during that rolldown,
say like you know, a hundred thousand dollars worth, then
(19:10):
they would be practically guaranteed to turn a ten to
fifteen percent profit. Okay, so the more tickets of player
buys during the special period, the more money they're kind
of a short to win. So I'm curious how many
tickets did Jerry and March go in on. It was unbelievable,
the number of tickets. I mean, they basically treated Windfall
like their retirement plan, and they played for the better
(19:32):
part of a decade. In fact, Michigan retired the game
only from Massachusetts to roll out their own versions soon after,
and so the Selby's actually took their ticket buying operation
on the road. What they would do is they just
pile into their truck, they drive the twelve hours or
so to Massachusetts, and then they'd set up shop in
two separate convenience stores, printing ream after ream of tickets
(19:53):
for honestly, for hours at a time. So I've been
stuck in bodegos behind people playing the lotto, and it's
so frustrating, Like you can be there for like ten
minutes or fifteen minutes. You can take forever when you're
in a rush. But how many tickets are we actually
talking about here? You are not going to believe this.
So at the height of their scheme, the couple was
spending over six hundred thousand dollars on a single play
(20:16):
of Windfall. Keep this in mind, we're talking two dollars
of pop here, so that means they had more than
three hundred thousand tickets that week. That's insane. So I'm
always nervous when I see people gambling and gambling with
such ridiculous amounts of money, like, I'm so afraid they're
gonna lose it. And you know, my favorite thing to
do in Las Vegas is to go up to an
(20:36):
a t M and act like I've one when it
spits out cash, because I do not want to get
ripped off five machines. But obviously these people are made
of much stronger stuff than I am. So how much
did they end up making? Well, the Selbies actually didn't
play alone, at least not the whole time. There was
one point where they started this company called GS Investment Strategies.
(20:57):
I love that that's the name of their company for
some reason, and Sting Firm, I know. So basically it
was a betting group that consisted of the Selby's and
their extended family and friends. And just looking at the
you know, the list of people in this it's pretty funny.
It included a state trooper, a parole officer, three lawyers,
among all these others that we're playing, and at their
(21:17):
final tally, they managed to get almost eight million dollars.
It was just shy of eight million dollars before taxes,
and of course all that was divvied up among the
company's twenty five players. So really not a bad hale
for nine years of printing out these slips of paper,
But it actually was a little bit short of what
this small group of M I T students managed to win.
And this was off the very same game. This was
(21:40):
between two thousand and four and two thousand and ten.
The students made actually just a little bit over eight
million dollars in profit. So I'm still kind of blown
away that this happened. I mean, like, why didn't the
lottery commissions of these states wise up to what was happening.
You've got these multiple groups of people pulling off the
same scheme for like a decade and obviously buying massive
amounts of tickets. Well, I mean, this may be the
(22:03):
weirdest part of all of this is that somebody did notice.
And this was in two thousand twelve. There was an
investigation into the Windfall Game, and and that investigation revealed
that the Massachusetts Lottery had known all about the m
I T students and the Selbys for years, but had
actually done nothing to stop them. Apparently, lottery officials had
been the rules so that the high stakes players could
(22:24):
buy hundreds of thousands of tickets because you know, the
added revenue and the success that brought to the lottery,
and of course by extension to the state, they just
considered it worth it. But you know, in the end,
even though none of this was technically illegal, the state Treasurer,
who oversees the lottery, they officially shut down the Windfall
game in two thousand twelve, and of course this put
(22:46):
an end to the player's long winning streak at that point. Yeah,
I mean, they made eight million dollars offense. It's not
that bad. It is staying that they figured this out,
But it also seems to suggest that, like once you
find a game that's beatable, you need lots of money
to win, right, Like these M I T students, the Celbes,
they all had the resources to buy up hundreds of
(23:07):
thousands of dollars worth of tickets, which is what allowed
them to win as often as they did. Meanwhile, you know,
the people who couldn't afford enough tickets to gain that
statistical advantage, they're kind of shut out. And not only that,
but it's really the poor folks money that's going to
all the payouts. You know that said, I mean, I
don't want to give the impression that lotteries are zero
(23:27):
sum game for society, Like like we were saying at
the top of the show. You know, countries have been
putting lottery revenue to good use for centuries, and that's
still true today. So even if you feel squeamish about
who these games might be targeting, like I do, it's
still worth taking a look at the benefits that come
from them. Yeah, I agree with that. But but before
we get to that, let's take one more quick break.
(24:01):
All right, Mango, so Cluisson, where exactly does all this
lottery money go? Well, first, let's clarify how much money
we're talking about here. So when you actually add up
all the revenue from the modern US lottery industry, all
the sales you know, from cash drawings, the instant win, scratchaws,
video lottery games, Kenno like, you wind up with a
(24:22):
yearly total of eighty billion dollars. That stunning, And and
just to put that in perspective, movie ticket sales in
the US add up to only about eleven billion dollars annually.
In fact, that eight billion is more than Americans spend
every year, not only on movie tickets, but also on
sports tickets, books, video games, music sales, all of that combined.
(24:44):
That's crazy, all right. So obviously we love to gamble,
and that must mean that we're getting something out of
the deal, right though, So how much of that eight
billion ends up in the player's pockets. It's way more
than you think. Like, I was actually surprised to hear this,
but over fifty billion of that to will goes to
players in the former prizes. Oh yeah, I wouldn't have
guessed that. Yeah, And then another eight billion is used
(25:05):
to cover the cost of the lotteries themselves, So like
this is the boring stuff like printing, advertising, design, employee salaries,
vendor fees. But the remaining twenty two billion, which you
know is still a ton of money, is funneled into
public programs, and that includes everything from education and land
conservation to senior assistance and even pension funds well, and
(25:28):
obviously different states will claim different amounts of that profit
depending on their individual sales numbers. But but it's up
to each state to decide what to do with their profits. Yeah,
that's right. So there are currently lotteries and forty seven
different U S jurisdictions, which includes forty four states plus
m d c Is on their Puerto Rico the virgin Islands,
(25:48):
and they each get to use their money for whatever
they want. So education budgets are probably the most popular choice.
Like the Virginia lottery for example, it actually puts all
of its profits into a cage to twelve education fund.
And last year our lottery right here in Georgia actually
gave out a billion dollars in profits to education programs
compared to the two point seven billion to gave out
(26:09):
in prizes to players. Wow. I I mean, you know,
there's no denying that state run lotteries can deliver pretty
big benefits to their citizens, at at least generally speaking.
And again, it's easy to see why most politicians would
want to keep that easy money flowing through their states. Sure,
But on a different note, one of the things that's
really fun to hear about is the individual lottery winners
(26:29):
who actually share their wealth. And I was reading about
this guy named John Coody who split a three million
dollar payout with six other I T specialists and this
was back in two thousand eleven. I mean, that sounds nice,
but you're saying seven I T guys won the jack.
But I feel like that has to be some kind
of fits, like with the m I T students, right, Yeah,
(26:50):
I mean that's possible, but considering what Coody did with
his money, like I wouldn't hold it against him. He
and his wife actually decided to use a good chunk
of their winnings to build this massive water park for
the community. And this was in Green Island, New York.
They called it Spray Park, and it's dedicated to Cootie's parents,
who apparently used to take their kids into this, uh,
I guess outdated water park in the community, and that's
(27:12):
the one he helped replace. That's pretty sweet and I
do love these kinds of stories. I was actually reading
about another lot of winning couple. They were named Allen
and Violet Large, and they want about eleven million dollars
back in two thousand and ten, and they ended up
giving away nine percent of it within the first year.
Is that not crazy? Yeah, I mean is a lot
of percent. So where did the money go? Well, according
(27:35):
to an article in the Toronto Star, the couple donated
nearly all of their winnings to the Red Cross, to
their local churches, fire departments, and even the hospitals where
Violet had undergone cancer treatment. And of course, while while
parting with that much lout is painful for you know,
so many of us to even think about, it was
apparently pretty easy for the largest There was this interview
I was looking at where Violet told reporters what you've
(27:57):
never had, you never miss I mean, it really is
amazing to see people react and you found wealth so
humbly like that. Um, speaking of humility, did did you
hear about this homeless guy in Illinois who won fifty
on a scratcher? Apparently he lived in a tent in
homeless community for like thirty five years at this point,
and that's when he won the money. But rather than
(28:17):
leave his friends for a comfy home of his own,
he decided to stay right where he was. Wait, so
he just stayed in his tent. Yeah. He told reporters
that he planned to use the money for an overdue
trip to the dentist, and he also wanted to use
some of the money to visit his son. But then
he gave a hundred dollars to every homeless person he knew,
and I'm guessing he knew a lot of them. Wow.
(28:39):
All right, so this is kind of a tangent, but
you made me think of it when you brought up
scratchers again. And we've been talking about the bright side
of playing the lottery throughout this segment. But there's actually
a way to get enjoyment from lotteries without playing them,
and the best part is it won't cost you a dime.
So what was the catch? Actually, there's no catch. All
you have to do is become a litologist. And if
(29:00):
by some chance you don't already know what a latologist is,
I can tell you that it's a person who collects
lottery tickets. So how does that cost no money? Well,
because it's a collecting hobby, it's not a gambling hobby.
So most latologists don't collect fresh or unused scratch cards.
They're actually collecting losing tickets or maybe even winners tickets
that have already been redeemed by the customers. So how
(29:23):
many latologists are there. I feel like you keep saying they,
but to me it feels like one person in his
parent's basement. Well, according to the Global Lottery Collectors Society.
You may not have been familiar with the Global Lottery
Collectors Society, there's a group of a few hundred passionate
collectors who trade and catalog all these various scratch off
(29:43):
games released in the US. And this one guy in particular,
his name is Arthur Rain, and he has one of
the biggest collections in the world. He's got over fifty
seven thousand different scratchers in his collection, so that's pretty crazy.
But I did notice you said one of the biggest,
So what's that mean exact Well, apparently they are one
or two other people in the society with bigger collections,
(30:04):
which I know is pretty hard to believe. So I'm
curious now, like, is there a holy grail for lata
just like, is there one special scratch off that everyone
would spend money on? Yeah, there definitely is. According to Rain,
the most sought after scratcher is this nineteen seventies six
card and it was from Illinois and it has Herbert
Hoover's picture on it. Apparently it was part of a
(30:26):
promotion where each ticket featured a different president, and once
the game was over, the lottery picked one president, and
anybody who submitted a losing ticket with that president's face
on it would be entered to win a consolation prize. Well,
Herbert Hoover ended up as the lucky President, and because
so many players mailed him in, there aren't many Hoover's
left in circulation. In fact, if you're lucky to find
(30:49):
one of the three or four copies known to exist
and you want to add it to your collection, it'll
set you back about five hundred bucks to do so.
I love that it's only worth five minute dollars, but
I mean it is a four year old losing lottery tickets.
But I am curious, though, if the Hoover card is
this exception to the rule, how are lutologious getting the
(31:10):
bulk of their collections. I mean, I get that they
trade with each other, but they've got to start out
with something to trade, right, Yeah, of course that's true.
I mean, so so many collectors actually have deals with
a whole network of stores, so they'll you know, make
their rounds once a week or so, and they'll collect
all the used tickets that A stores customers just left behind.
It's such a specific hobby, it sounds amazing. You know.
(31:34):
It kind of reminds me of our friends Sarah, who
used to find business cards on sidewalks or I guess
that convention floors and and collect them. And I think
her big idea was that someday she was going to
throw a party for all these people who wanted to
network and get their name out there. But I mean,
it's I know, I think it's great, Like I love
to I should start leaving my business card places. But
(31:54):
I mean, at least like a business card has value.
I can't imagine keeping fifty of anything in my house.
You know, where do you even find the room for that? Well,
that's what's funny about I read this interview with Rain
from Atlas Obscura and and and he says, I gotta
beg my wife every day not to throw me out
of the house. So I mean, i'd say the fact
that it hasn't happened already makes him pretty lucky. And
(32:17):
speaking of lucky, well, what do you say we get
a little fact off going. I've got to can't lose
feeling today. All right, well, let's see what you got
so well, did you know that pigeons love to gamble?
According to scientific American scientists at the University of Kentucky
(32:38):
set up these Avian gambling parlors where pigeons could pick
at one symbol and reliably get a single food pellet,
and this happened every single time. Or they had the
option to peck at a second symbol, and this was
a wild card, and most of the times they'd get nothing,
But every once in a while they'd hit the jackpot
and they'd get ten food pellets. But that big pay
(33:00):
it was actually way too much for them to resist.
So whenever they were given a choice, the pigeons chose
to gamble. And this was more than eighty percent of a
a time, even though the winnings were way less when
you average them out, that's pretty good, all right. Well,
in Europe and particularly Italy, there's a tradition where the
lottery is drawn by blindfolded kids, which seems like kind
(33:21):
of a weird tradition. And the idea here is that
children are innocent, so this is a game you can
supposedly trust. Although I feel like there have been so
many studies showing that children are not at all honest
on this kind of thing. But anyway, but this was
before things were automated, back in the two thousands, and
as it turns out, not surprisingly, the kids were part
of a massive scam. They'd actually been trained to feel
(33:44):
for these roughed up lottery balls, and when the journalists
who broke the scandal started looking into this, they found
that the kids were being paid in toys. So I
love the idea that, like, you can actually fix a
multimillion lottery with I don't know, like some e bears
and director sets, that's all it takes. Did you realize
that it's way harder to win McDonald's monopoly game than
(34:07):
it is to win an actual lottery And apparently the
odds of winning Powerball are one in a hundred seventy
five million, So already you're more likely to die on
the way to playing a lot of than you are
to winning it. But that one in a hundred seventy
five million is great odds compared to the odds of
finding a boardwalk piece, which is one in six hundred million.
And when you factor in also finding a park place,
(34:30):
your odds of winning go down to one in three billion.
Isn't that the saying, wow, that's pretty great? All right? Well,
in nineteen twelve, Popular Mechanics reported that a hospital in
Paris had held a lottery, but they actually were giving
out something a little different than money. They were giving
out babies, like if you won, you won a baby,
which is I don't know. It feels like kind of
a dubious prize for a lot of people, but it's
(34:52):
the only time we know of that this has happened.
But the hospital they not only consulted authorities, but they
actually made sure to research whether a winning pupple was
actually good to be foster parents before they handed them
a baby. I guess that sounds smart. So this feels
like such luck. But when Zimbabwe ran a lottery in
two thousand, the dictator and president of Zimbabwe at the time,
(35:14):
Robert Mugabe, just happened to win it, like he won
the grand prize of a hundred thousand dollars in the
state run lottery. And it's kind of amazing how that happened. Yeah,
just such a lucky guy, I guess. All right, all right,
so I've got one more fun one. So you remember
how they were all those Volkswagen commercials that we're trying
to gamify good behavior a while back, right, yeah, yeah, yeah,
(35:36):
like they you know, they made those trash cans that
would blink and flash whenever you put your litter in them,
and I remember one of the others they had those
musical steps that made sounds when you use them instead
of the elevator, And it was all these little bits
of joy that we're there to encourage you to do
good things, either for you or for society. One of
the ideas that actually got implemented in Sweden was when
(35:57):
they set up the lottery at traffic lights. So you
know when you run a red light, they're all these
places where cameras will catch you and then send you
a ticket in the mail. Well, well they actually turn
that into a lottery for good drivers. So whenever you
slowed down and stopped, you were automatically put into a lottery,
and then the winners were paid out with money that
came from speeding fines. Isn't that a great idea? I
(36:19):
love it, you know, for all my hubers going into this,
I I do think you get to walk away with
the prize this week. Well, thank you very much and uh,
I'm sure we forgot some great facts about lotteries over
the years and we would love to hear those from.
You can always email us part Time Genius and How
Stuff Works dot com. You can also call us on
fact hot line that's eight six six pt Genius, or
(36:40):
as always, you can hit us up on Facebook or Twitter.
But thanks so much for listening. Thanks again for listening.
Part Time Genius is a product and of How Stuff
(37:00):
Works and wouldn't be possible without several brilliant people who
do the important things we couldn't even begin to understand.
Tristan McNeil does the editing thing. Noel Brown made the
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Rowland does the exact producer thing. Gay Bluesier is our
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Nolan Brown and Lucas Adams and Eve Jeff Cook gets
(37:20):
the show to your ears. Good job, Eves. If you
like what you heard, we hope you'll subscribe, And if
you really really like what you've heard, maybe you could
leave a good review for us. Do we do? We
forget Jason Jason, who
Guess what will what's that man go? So in two
thousand twelve, this little farming village in Spain called Sodetto
was struggling and there had been this downturn in the economy.
There was also this massive drought and the town's homeowner
association was running short on cash. But for some reason
they decided to spend what was left of their dues
on the Christmas Lottery. I guess this is kind of
(00:21):
a Spanish tradition and the whole country gets into it,
but they bought tickets for the whole town. Wow. Yeah,
I've actually heard about the Christmas Lottery. I think we
wrote about it a while back, and of course it
being such a big deal in Spain. Actually saw this
one study where people were so optimistic around the time
and the Christmas Lottery, Like, even though they know they're
most likely not going to win, but that optimism actually
(00:43):
changes their opinions of politicians, and so whoever's running for
reelection at the time, even if they're overwhelmingly disliked, they
end up getting this big bounce because of this. Oh
that's crazy. But going back to this town, they were
actually really lucky. They played the village when fifty million
dollars and it got split up among the towns seventy families. Yeah, so,
(01:04):
like there were these unemployed construction workers, are down on
their luck farmers, and they all walked away like millionaires
or at the very least hundred thousand rs. But everyone
except one guy, that is. And he was this Greek
gentleman who was down on his luck. He he'd moved
to the town for a woman and they'd just broken up,
and I guess he just wasn't interested in playing and
(01:26):
losing money, So so he didn't get to cash in.
Oh man, what a bumber. So he's the only one
who didn't participate. Yeah, I mean, things ended up kind
of all right for him. Like he'd been trying to
sell his barn there and before the lottery, no one
had money to buy it. But once they did, suddenly
everyone was clamboring to purchase his barn, so he ended
(01:46):
up with a real estate deal. But today's show is
all about the lottery. How does statisticians out fox the system?
And why should you care if you find Herbert Hoover
on your lotto ticket? So let's dive in. Hey, their
(02:17):
podcast listeners, welcome to part time genius. I'm Will Pearson
and as always I'm joined by my good friend Mangesh
Ticketer and on the other side of the soundproof glass,
hunched over the fattest stack of Georgia Lotto scratchers I
think I've ever seen. I feel like he might have
bought all of them, Mango. But that's our friend and
producer Tristan McNeil. You know the other thing I've noticed,
this guy loves scratching these things, Mango. Have you been
(02:38):
watching him over here? Yeah, he actually is using this
special scratch off tool. It's shaped like a little ice craper,
but it goes on your key ring. I think he
got it off, Etsy, but I think he has it
just in case of a lot of emergencies. Well, you
never know what's going to happen, and I do wish
you luck, Tristan. But the truth is, winning the lottery
is a universally accepted long shot, like it's right up
(03:00):
there with being struck by lightning or crushed by a meteor,
except in the case of winning the lotto, your odds
are actually much much worse, you know. Yet despite that,
despite knowing, the odds are ridiculously long millions of people
around the world will still pony up for lotteries every
single year. So with that in mind, we thought it'd
be interesting to explore the psychology behind why people play
(03:21):
the lottery, including how playing changes lives. Plus along the way,
we'll check out the stories of a few enterprising gamblers
who found pretty clever ways to game the system and
beat those odds. But before we get to that, I
know you did some digging this week into the history
of lottery, so can you fill us in just a
little bit on that before we get to anything else. Yeah, So,
what's crazy is that lotteries are basically as old as arithmetic,
(03:44):
and you can actually find stories of lotteries in the Bible.
In fact, the first lotteries weren't really about winning prize
money like in the Old Testament. There are all these
references to land lotteries, and Moses actually used one to
divvy up portions of the promised land along the Jordan River.
Skulls think this worked similar to how we play powerball,
Like the tribes of Israel would have each taken a
(04:05):
differently shaped or marked stone and dropped it into a
clay pot or maybe wrapped it up in a piece
of cloth and then they would have shaken up all
the stones and drawn one for each piece of land
on the docket. But ancient lotteries also had these other uses,
Like in the sixth century BC, Athenians chose most of
their government officials through sortition, which is actually a term
(04:25):
for when political representatives are selected at random by people
casting or drawing lots. Which seems like a weird fit
for that to have been in in Athens, I mean,
like what it wasn't Athens like the birthplace of democracy? Yeah,
And and that's actually the thing, Like the Athenians actually
viewed the lottery as more democratic than elections, and they're
thinking was that, you know, politicians or wealthy citizens could
(04:48):
easily rig the outcomes of elections, and to them, sortitians
just seemed like the safer option. So while Athens did
hold elections for a few positions, the bulk of the
appointments were simply left to chance. And the way it
work was that any freeman over the age of eighteen
was entered into a lottery, and if their name was drawn,
they would either be assigned a term as a juror
or as a member of the Citizen Council. I'm curious about, like,
(05:10):
how exactly did they run this lottery. It sounds like
they were trying to sort through and pick from a
lot of people, right, Yeah, And it wasn't done powerball style.
They actually had a special device called Claritarian. It's to
help ensure that the draws were as random as possible.
And it was basically this massive stone slab and it
had these tiny slots in it for putting tokens in,
(05:34):
and each token identified a different person in the lottery.
And then they had this long tube connected to the
side of the slab, and when officials poured a bunch
of black and white pebbles into the tube, I mean,
this is ingenious. The pebbles would just scatter across the
slab and land on different tokens, and that indicated who
would receive positions and who would be dismissed. And I
don't know, it kind of feels like something out of
(05:55):
the Flintstones Prices. Right. That's pretty great. Yeah, Actually, lotteries
are so much more on when they include these weird
gadgets or honestly, these like overly complicated systems for choosing
their winners and just in doing your other digging, did
you find any other early examples of of weirdness like this? Yeah?
I mean, I think you would like the lottery style
(06:15):
game that they played in China during the Han dynasty.
It was typically played on I guess a white ticket
and players would select like a series of numbers of characters,
and if their picks were chosen in the random drawing,
then they'd be senterprize. But this is where it gets special, right,
because how do you communicate the winning numbers when all
your players are spread out across a bunch of rural villages?
(06:36):
All right, well we're talking ancient China, so I'm gonna
go with I don't know, like a fireworks display or something.
I mean, that would be so fun, right to watch
these fireworks sort of reveal the answers. But fireworks were
still a few centuries away at this point, so instead,
these Chinese governments used birds to deliver the results to villages,
Like they had a whole fleet of carrier pigeons that
(06:58):
would carry the results from village to village, and then
they'd also collect the winning tickets along the way. And
in fact, this is actually where the game got its
original name. Bige Po. I know I'm pronouncing that wrong,
but roughly translated, it's called white Pigeon Ticket. I mean
that's pretty cool. So do people still play this white
pigeon ticket game today? They do, except now the game
(07:20):
has been rebranded as Keno. They've I guess stripped the
pigeons out of the game, which feels like a major
loss to me. But Keino is still a huge money
maker for Xino's. Even two thousand years ago, the game
was this big financial windfall for China. It was supposedly
invented by a warlord who's named Chung Lung. He'd been
(07:41):
looking for a way to get citizens to help fund
his army, and selling those white pigeon tickets proved a
great way to do just that. Pretty soon the game
was being used to fund not just the military, but
all sorts of other public works projects, and in fact,
one version of the game supposedly helped pay for the
Great Wall of China. You know, that was one of
the surprising things as we were doing our research for
(08:02):
this week, was realizing how many of these huge projects
were funded by lotteries. I was actually reading just recently
about colonial America and that it was largely built using
revenue from lotteries. Like apparently, lotteries had made their way
to America's shores. I think it was back in the
sixteenth century. And this was really around the same time
that they were catching on in Europe. So I guess
(08:24):
in places like Italy and France and England they all
borrowed a page from China's playbook, because you know, they
realized that lotteries were a smart way to raise money
for these various civic projects. And so it's kind of
crazy how early it was being used in America too.
You look back around sixteen twelve, you had the Virginia
Company of London actually held a lottery to support the
(08:45):
struggling Jamestown Colony and and really used it to save
the settlers there from starvation. But it was used in
these other pittal moments to like, you know, seventeen seventy six,
you had the Constitutional Congress holding a lottery to finance
soldiers for the Revolutionary Or. And then even after the
war was one, the New States relied on these lotteries
for much more of their revenue. And you know, after all,
(09:07):
unfair taxation had been a big part of the war
so you can see why this alternative way to raise
money was so appealing to politicians. It was, you know,
just so much easier than creating a new tax. I mean,
it's funny because people often refer to the lottery as
I don't know, like like a voluntary tax. Yeah, and
you know, that's actually how one of the founding fathers
felt about lotteries too. And I'm talking about Thomas Jefferson here,
(09:30):
and he wrote a good bit about it. So once
he wrote about it, he said, um, far from being immoral,
they were indispensable to the existence of man. Their attacks
laid on the willing only. Of course, Jefferson was more
than a little bit biased in this situation. I mean
that quote comes from a letter that he was writing
to the Virginia legislature. And he was writing this because
he was looking for permission to hold his own lottery.
(09:52):
And I was actually looking into why he was doing this,
and the whole reason he wanted to do it was
to pay off some of his debts. It's pretty pretty fun.
That's pretty amazing. Yeah, But you know what's weird is
that there's this whole idea that lotteries are really kind
of this voluntary tax, right, like, it's it's only attacks
if you're willing to buy in. But there's actually pretty
(10:12):
strong evidence that suggests that long time lotto players are
induced to play a game that maybe they otherwise wouldn't,
so explain that, Like, what do you mean by that?
All right, well, it might be helpful just to give
a little bit of background on who's playing the lottery.
So I was looking at this information from Gallop and
it was showing that nearly half of all US adults
have played a state lottery at least once in their lives.
(10:34):
That's not that surprising. But then if you look a
little bit closer, the vast majority of those tickets are
bought by just twenty of the population, and as you
might guess, most of those players who make up that
are actually among the poorest in the country. In fact,
according to a study from Duke this was done back
in the nineteen eighties, the poorest third of American households
(10:56):
by roughly half of the lottery tickets that are sold.
But there's more recent data, and this is what's even
more disturbing, is that on average, households that make less
than twelve thousand dollars a year, spent a full five
pc of their incomes on lotteries, five percent of their
incomes on matters. It's it's it's pretty tragic to see that.
That's horrifying. So, I mean, there's so many things that
(11:18):
work against the poor. Like I was reading about I'm
pretty sure it was Chicago, but it was about parking tickets,
where if you get a ticket and you don't pay
in time, the price automatically skyrockets, and if you can't
pay that, they boot your car or take away your license,
which then makes it harder to get to your job
to pay that ticket. And that's actually been driving a
(11:39):
ton of bankruptcies in the city. I mean, I guess
if you're desperate and you're looking for a fast fix
for your financial troubles, like playing the lottery seems like
the quickest way out. At least that's how I think
about it. But it sounds like you're saying it's more
than that, Like these people are actually being misled or
maybe duped or something. Yeah, and you know this, this
(12:00):
actually goes back to a two thousand eight study. You
like the number of studies I'm quoting today. I'm just
grief on all these studies that came armed with them.
But this was a group of behavioral economists there at
Carnegie Mellon, and so what they were looking to is,
is it really like the reason why poor people are
so much more likely to play the lottery than those
who are better off. And what they found was that
(12:20):
a lot of the desire that drives these low income
players isn't so much from being poor as it is
from feeling poor. So here's how the studies authors broke
down their findings. It says um an experiment one, participants
were more likely to purchase lottery tickets when they were
primed to perceive that their own income was low relative
to the implicit standard. And then an experiment to, participants
(12:42):
purchased more lottery tickets when they considered non lottery situations
in which rich people or poor people receive advantages, implicitly
highlighting the fact that everyone has an equal chance of
winning the lottery. So basically, when you make people feel poor,
they played a lottery more, and when they feel like
it's equal like then then they want to put money
(13:04):
on it because they feel like it's a fair game.
I mean, it's kind of heartbreaking when you think about
how low their chances of winning actually are though, right, Yeah,
And I actually found yet another study, and this comes
from the the late age. Can have studies, I'm coming with,
so many of them have almost as many studies as
Tristan has scratch off tickets. Not quite. This one's a
(13:25):
good one too. So this was also in the late eighties,
and the researchers discovered that lottery ticket sales in California,
they rise along with the poverty rate, but movie ticket
sales actually don't. And so what that says is that
people don't just play the lottery for fun. They're they're
playing it out of desperation. So, you know, all too
often the lottery becomes a way for states to shift
(13:45):
the cost of government services from you know, from the
wealthier citizens onto honestly like the most hopeless ones. Alright, Well,
now that you've got us all righteously indignant about the lottery,
here's what I want to talk about. Nerdy geniuses who
out fox the system and made a lot of pay
out big time. All right, that sounds like a good idea.
(14:05):
But before we do that, let's take a quick break.
If you're listening to part time genius, so we're talking
about some of the most brazen lottery scams in history. Alright, Mago,
(14:26):
So let's live vicariously for a minute through some of
these Loto legends. So who do you want to talk
about first? Okay, So first I'm gonna tell you about
Moen Shivasa. He is this m I T Train statistician
who actually found a flaw in a certain scratch off
game from the Ontario Lottery and this effectively allowed him
to predict winning cards about nine of the time. Oh wow,
(14:49):
So what's his story? So Moen wasn't really interested in
playing a lot of much less exploiting it. But one day,
and this was back in two thousand three, he found
some old scratch offs on his desks that have been
part of this gag gift I guess someone give him,
and on a whim, he scratched off one and one
three dollars. So he's walking to cash in his ticket
as lunch break, and as he's thinking about it, he
(15:10):
started thinking about how scratch offs must be made right,
and it dawned on him that the tickets are obviously
mass produced, which means that a computer program must be
involved in laying out the numbers on each ticket. Yeah,
I get that, But it's all random, isn't it. Like
that's probably another reason ticket makers use a computer, because
there's no way a human could actually design that many
tickets and still keep the numbering completely random, right, Sure,
(15:33):
but Moon realized that the computers can't be generating truly
random numbers either, Like if they were, that mean the
lottery company had no control over the actual number of
winning tickets produced. And if that were the case, it
would mean that some ticket packets would have very few
winners or maybe even none at all. And obviously it
would be tough to get retailers and also players to
keep buying those tickets if so many of those cards
(15:55):
were duds. Okay, that that that makes sense. So if
the tickets like they kind of have to have the
illusion of randomness while actually being incredibly ordered beneath the surface,
is that what you're saying exactly? And once Moman figured
this out, he decided to try and crack the algorithm
that generated all those numbers, you know, just for fun,
because he was from M I. T In a statistician,
(16:17):
so he sat down to study this one tic tac
toe scratch off game he'd been playing, and after just
a few hours he discovered that the visible numbers on
the ticket actually dictated which digits were hidden under the
latex coding. So basically, every ticket had like eight tic
tac toe game boards on it, and each board would
contain some visible numbers. But if you look to see
(16:39):
how many times those numbers repeated on the card, and
mostly it was if a number was a singleton and
not repeating, you could actually tell which cards were winners,
and the prize money could be anywhere between three dollars
and fifty dollars. Okay, all right, I mean, I know
it all sounds complicated, But what I find so fascinating
about this is he's just saying momen basically found a
(16:59):
way to determine if a ticket was a winner without
having to scratch anything off. And and you're saying he
got this trick to work like nine of the time,
that must have made a fortune. So that's the weirdest part.
Moon really did this for the love of math and
not money. In fact, once he was sure his technique worked,
he actually contacted the Ontario Lottery Gaming Corporation and told
(17:21):
him about the flaw he'd found and It's funny because
he told NPR that he was playing telephone tag with lottery,
and when they finally got to talk to one another,
they kind of didn't believe him. So he sent them
twenty unscratched cards and separated them into what he thought
would be winning cards and duds. And when they scratched
them off and realized he predicted correctly, that's when they
called him back. Oh man, I bet he felt pretty awesome.
(17:43):
That's pretty wild. Yeah, I mean, he later discovered the
problem wasn't exclusive Ontario. I mean, it kind of makes sense, right.
It turned out the same trick was also being employed
in Colorado, though when he analyzed those cards he could
only figure them out with accuracy. I mean, that's still
pretty impressive. But I mean, you know, it's as nice
as it was for Owen to come clean about his discovery.
(18:04):
I feel like that's certainly not how most attempts to
game the lottery turnout. And I was just looking at
some other cases, you know, if you take the case
of Jerry and Marge Selby, for instance, And this comes
from this great story by Jason Fagoni and and we
actually had Jason on the program earlier. This year to
talk about his book. It was called The Woman Who
Smashed Codes. I mean, that was honestly one of my
favorite episodes. Is so fascinating, and my mom just bought
(18:27):
that book because she loved Jason so much. But to
tell me about the Selby's. All right, So they're from
Michigan and they were basically among the first players to
find a flaw in a state lottery game. The game
was called Windfall, and this was back in two thousand three,
and it came down to this unique quirk and windfalls rules, namely,
whenever the jackpot would rise to roughly two million dollars
or so without anybody winning it, the payoffs for smaller
(18:49):
prizes increased dramatically. So basically, if a player waited until
this so called rolldown period, which typically lasted for a
few days every three months or so, they would stay
and to win more than they lost. And of course
this is on average, and so if they were to
buy an especially high number of tickets during that rolldown,
say like you know, a hundred thousand dollars worth, then
(19:10):
they would be practically guaranteed to turn a ten to
fifteen percent profit. Okay, so the more tickets of player
buys during the special period, the more money they're kind
of a short to win. So I'm curious how many
tickets did Jerry and March go in on. It was unbelievable,
the number of tickets. I mean, they basically treated Windfall
like their retirement plan, and they played for the better
(19:32):
part of a decade. In fact, Michigan retired the game
only from Massachusetts to roll out their own versions soon after,
and so the Selby's actually took their ticket buying operation
on the road. What they would do is they just
pile into their truck, they drive the twelve hours or
so to Massachusetts, and then they'd set up shop in
two separate convenience stores, printing ream after ream of tickets
(19:53):
for honestly, for hours at a time. So I've been
stuck in bodegos behind people playing the lotto, and it's
so frustrating, Like you can be there for like ten
minutes or fifteen minutes. You can take forever when you're
in a rush. But how many tickets are we actually
talking about here? You are not going to believe this.
So at the height of their scheme, the couple was
spending over six hundred thousand dollars on a single play
(20:16):
of Windfall. Keep this in mind, we're talking two dollars
of pop here, so that means they had more than
three hundred thousand tickets that week. That's insane. So I'm
always nervous when I see people gambling and gambling with
such ridiculous amounts of money, like, I'm so afraid they're
gonna lose it. And you know, my favorite thing to
do in Las Vegas is to go up to an
(20:36):
a t M and act like I've one when it
spits out cash, because I do not want to get
ripped off five machines. But obviously these people are made
of much stronger stuff than I am. So how much
did they end up making? Well, the Selbies actually didn't
play alone, at least not the whole time. There was
one point where they started this company called GS Investment Strategies.
(20:57):
I love that that's the name of their company for
some reason, and Sting Firm, I know. So basically it
was a betting group that consisted of the Selby's and
their extended family and friends. And just looking at the
you know, the list of people in this it's pretty funny.
It included a state trooper, a parole officer, three lawyers,
among all these others that we're playing, and at their
(21:17):
final tally, they managed to get almost eight million dollars.
It was just shy of eight million dollars before taxes,
and of course all that was divvied up among the
company's twenty five players. So really not a bad hale
for nine years of printing out these slips of paper,
But it actually was a little bit short of what
this small group of M I T students managed to win.
And this was off the very same game. This was
(21:40):
between two thousand and four and two thousand and ten.
The students made actually just a little bit over eight
million dollars in profit. So I'm still kind of blown
away that this happened. I mean, like, why didn't the
lottery commissions of these states wise up to what was happening.
You've got these multiple groups of people pulling off the
same scheme for like a decade and obviously buying massive
amounts of tickets. Well, I mean, this may be the
(22:03):
weirdest part of all of this is that somebody did notice.
And this was in two thousand twelve. There was an
investigation into the Windfall Game, and and that investigation revealed
that the Massachusetts Lottery had known all about the m
I T students and the Selbys for years, but had
actually done nothing to stop them. Apparently, lottery officials had
been the rules so that the high stakes players could
(22:24):
buy hundreds of thousands of tickets because you know, the
added revenue and the success that brought to the lottery,
and of course by extension to the state, they just
considered it worth it. But you know, in the end,
even though none of this was technically illegal, the state Treasurer,
who oversees the lottery, they officially shut down the Windfall
game in two thousand twelve, and of course this put
(22:46):
an end to the player's long winning streak at that point. Yeah,
I mean, they made eight million dollars offense. It's not
that bad. It is staying that they figured this out,
But it also seems to suggest that, like once you
find a game that's beatable, you need lots of money
to win, right, Like these M I T students, the Celbes,
they all had the resources to buy up hundreds of
(23:07):
thousands of dollars worth of tickets, which is what allowed
them to win as often as they did. Meanwhile, you know,
the people who couldn't afford enough tickets to gain that
statistical advantage, they're kind of shut out. And not only that,
but it's really the poor folks money that's going to
all the payouts. You know that said, I mean, I
don't want to give the impression that lotteries are zero
(23:27):
sum game for society, Like like we were saying at
the top of the show. You know, countries have been
putting lottery revenue to good use for centuries, and that's
still true today. So even if you feel squeamish about
who these games might be targeting, like I do, it's
still worth taking a look at the benefits that come
from them. Yeah, I agree with that. But but before
we get to that, let's take one more quick break.
(24:01):
All right, Mango, so Cluisson, where exactly does all this
lottery money go? Well, first, let's clarify how much money
we're talking about here. So when you actually add up
all the revenue from the modern US lottery industry, all
the sales you know, from cash drawings, the instant win, scratchaws,
video lottery games, Kenno like, you wind up with a
(24:22):
yearly total of eighty billion dollars. That stunning, And and
just to put that in perspective, movie ticket sales in
the US add up to only about eleven billion dollars annually.
In fact, that eight billion is more than Americans spend
every year, not only on movie tickets, but also on
sports tickets, books, video games, music sales, all of that combined.
(24:44):
That's crazy, all right. So obviously we love to gamble,
and that must mean that we're getting something out of
the deal, right though, So how much of that eight
billion ends up in the player's pockets. It's way more
than you think. Like, I was actually surprised to hear this,
but over fifty billion of that to will goes to
players in the former prizes. Oh yeah, I wouldn't have
guessed that. Yeah, And then another eight billion is used
(25:05):
to cover the cost of the lotteries themselves, So like
this is the boring stuff like printing, advertising, design, employee salaries,
vendor fees. But the remaining twenty two billion, which you
know is still a ton of money, is funneled into
public programs, and that includes everything from education and land
conservation to senior assistance and even pension funds well, and
(25:28):
obviously different states will claim different amounts of that profit
depending on their individual sales numbers. But but it's up
to each state to decide what to do with their profits. Yeah,
that's right. So there are currently lotteries and forty seven
different U S jurisdictions, which includes forty four states plus
m d c Is on their Puerto Rico the virgin Islands,
(25:48):
and they each get to use their money for whatever
they want. So education budgets are probably the most popular choice.
Like the Virginia lottery for example, it actually puts all
of its profits into a cage to twelve education fund.
And last year our lottery right here in Georgia actually
gave out a billion dollars in profits to education programs
compared to the two point seven billion to gave out
(26:09):
in prizes to players. Wow. I I mean, you know,
there's no denying that state run lotteries can deliver pretty
big benefits to their citizens, at at least generally speaking.
And again, it's easy to see why most politicians would
want to keep that easy money flowing through their states. Sure,
But on a different note, one of the things that's
really fun to hear about is the individual lottery winners
(26:29):
who actually share their wealth. And I was reading about
this guy named John Coody who split a three million
dollar payout with six other I T specialists and this
was back in two thousand eleven. I mean, that sounds nice,
but you're saying seven I T guys won the jack.
But I feel like that has to be some kind
of fits, like with the m I T students, right, Yeah,
(26:50):
I mean that's possible, but considering what Coody did with
his money, like I wouldn't hold it against him. He
and his wife actually decided to use a good chunk
of their winnings to build this massive water park for
the community. And this was in Green Island, New York.
They called it Spray Park, and it's dedicated to Cootie's parents,
who apparently used to take their kids into this, uh,
I guess outdated water park in the community, and that's
(27:12):
the one he helped replace. That's pretty sweet and I
do love these kinds of stories. I was actually reading
about another lot of winning couple. They were named Allen
and Violet Large, and they want about eleven million dollars
back in two thousand and ten, and they ended up
giving away nine percent of it within the first year.
Is that not crazy? Yeah, I mean is a lot
of percent. So where did the money go? Well, according
(27:35):
to an article in the Toronto Star, the couple donated
nearly all of their winnings to the Red Cross, to
their local churches, fire departments, and even the hospitals where
Violet had undergone cancer treatment. And of course, while while
parting with that much lout is painful for you know,
so many of us to even think about, it was
apparently pretty easy for the largest There was this interview
I was looking at where Violet told reporters what you've
(27:57):
never had, you never miss I mean, it really is
amazing to see people react and you found wealth so
humbly like that. Um, speaking of humility, did did you
hear about this homeless guy in Illinois who won fifty
on a scratcher? Apparently he lived in a tent in
homeless community for like thirty five years at this point,
and that's when he won the money. But rather than
(28:17):
leave his friends for a comfy home of his own,
he decided to stay right where he was. Wait, so
he just stayed in his tent. Yeah. He told reporters
that he planned to use the money for an overdue
trip to the dentist, and he also wanted to use
some of the money to visit his son. But then
he gave a hundred dollars to every homeless person he knew,
and I'm guessing he knew a lot of them. Wow.
(28:39):
All right, so this is kind of a tangent, but
you made me think of it when you brought up
scratchers again. And we've been talking about the bright side
of playing the lottery throughout this segment. But there's actually
a way to get enjoyment from lotteries without playing them,
and the best part is it won't cost you a dime.
So what was the catch? Actually, there's no catch. All
you have to do is become a litologist. And if
(29:00):
by some chance you don't already know what a latologist is,
I can tell you that it's a person who collects
lottery tickets. So how does that cost no money? Well,
because it's a collecting hobby, it's not a gambling hobby.
So most latologists don't collect fresh or unused scratch cards.
They're actually collecting losing tickets or maybe even winners tickets
that have already been redeemed by the customers. So how
(29:23):
many latologists are there. I feel like you keep saying they,
but to me it feels like one person in his
parent's basement. Well, according to the Global Lottery Collectors Society.
You may not have been familiar with the Global Lottery
Collectors Society, there's a group of a few hundred passionate
collectors who trade and catalog all these various scratch off
(29:43):
games released in the US. And this one guy in particular,
his name is Arthur Rain, and he has one of
the biggest collections in the world. He's got over fifty
seven thousand different scratchers in his collection, so that's pretty crazy.
But I did notice you said one of the biggest,
So what's that mean exact Well, apparently they are one
or two other people in the society with bigger collections,
(30:04):
which I know is pretty hard to believe. So I'm
curious now, like, is there a holy grail for lata
just like, is there one special scratch off that everyone
would spend money on? Yeah, there definitely is. According to Rain,
the most sought after scratcher is this nineteen seventies six
card and it was from Illinois and it has Herbert
Hoover's picture on it. Apparently it was part of a
(30:26):
promotion where each ticket featured a different president, and once
the game was over, the lottery picked one president, and
anybody who submitted a losing ticket with that president's face
on it would be entered to win a consolation prize. Well,
Herbert Hoover ended up as the lucky President, and because
so many players mailed him in, there aren't many Hoover's
left in circulation. In fact, if you're lucky to find
(30:49):
one of the three or four copies known to exist
and you want to add it to your collection, it'll
set you back about five hundred bucks to do so.
I love that it's only worth five minute dollars, but
I mean it is a four year old losing lottery tickets.
But I am curious, though, if the Hoover card is
this exception to the rule, how are lutologious getting the
(31:10):
bulk of their collections. I mean, I get that they
trade with each other, but they've got to start out
with something to trade, right, Yeah, of course that's true.
I mean, so so many collectors actually have deals with
a whole network of stores, so they'll you know, make
their rounds once a week or so, and they'll collect
all the used tickets that A stores customers just left behind.
It's such a specific hobby, it sounds amazing. You know.
(31:34):
It kind of reminds me of our friends Sarah, who
used to find business cards on sidewalks or I guess
that convention floors and and collect them. And I think
her big idea was that someday she was going to
throw a party for all these people who wanted to
network and get their name out there. But I mean,
it's I know, I think it's great, Like I love
to I should start leaving my business card places. But
(31:54):
I mean, at least like a business card has value.
I can't imagine keeping fifty of anything in my house.
You know, where do you even find the room for that? Well,
that's what's funny about I read this interview with Rain
from Atlas Obscura and and and he says, I gotta
beg my wife every day not to throw me out
of the house. So I mean, i'd say the fact
that it hasn't happened already makes him pretty lucky. And
(32:17):
speaking of lucky, well, what do you say we get
a little fact off going. I've got to can't lose
feeling today. All right, well, let's see what you got
so well, did you know that pigeons love to gamble?
According to scientific American scientists at the University of Kentucky
(32:38):
set up these Avian gambling parlors where pigeons could pick
at one symbol and reliably get a single food pellet,
and this happened every single time. Or they had the
option to peck at a second symbol, and this was
a wild card, and most of the times they'd get nothing,
But every once in a while they'd hit the jackpot
and they'd get ten food pellets. But that big pay
(33:00):
it was actually way too much for them to resist.
So whenever they were given a choice, the pigeons chose
to gamble. And this was more than eighty percent of a
a time, even though the winnings were way less when
you average them out, that's pretty good, all right. Well,
in Europe and particularly Italy, there's a tradition where the
lottery is drawn by blindfolded kids, which seems like kind
(33:21):
of a weird tradition. And the idea here is that
children are innocent, so this is a game you can
supposedly trust. Although I feel like there have been so
many studies showing that children are not at all honest
on this kind of thing. But anyway, but this was
before things were automated, back in the two thousands, and
as it turns out, not surprisingly, the kids were part
of a massive scam. They'd actually been trained to feel
(33:44):
for these roughed up lottery balls, and when the journalists
who broke the scandal started looking into this, they found
that the kids were being paid in toys. So I
love the idea that, like, you can actually fix a
multimillion lottery with I don't know, like some e bears
and director sets, that's all it takes. Did you realize
that it's way harder to win McDonald's monopoly game than
(34:07):
it is to win an actual lottery And apparently the
odds of winning Powerball are one in a hundred seventy
five million, So already you're more likely to die on
the way to playing a lot of than you are
to winning it. But that one in a hundred seventy
five million is great odds compared to the odds of
finding a boardwalk piece, which is one in six hundred million.
And when you factor in also finding a park place,
(34:30):
your odds of winning go down to one in three billion.
Isn't that the saying, wow, that's pretty great? All right? Well,
in nineteen twelve, Popular Mechanics reported that a hospital in
Paris had held a lottery, but they actually were giving
out something a little different than money. They were giving
out babies, like if you won, you won a baby,
which is I don't know. It feels like kind of
a dubious prize for a lot of people, but it's
(34:52):
the only time we know of that this has happened.
But the hospital they not only consulted authorities, but they
actually made sure to research whether a winning pupple was
actually good to be foster parents before they handed them
a baby. I guess that sounds smart. So this feels
like such luck. But when Zimbabwe ran a lottery in
two thousand, the dictator and president of Zimbabwe at the time,
(35:14):
Robert Mugabe, just happened to win it, like he won
the grand prize of a hundred thousand dollars in the
state run lottery. And it's kind of amazing how that happened. Yeah,
just such a lucky guy, I guess. All right, all right,
so I've got one more fun one. So you remember
how they were all those Volkswagen commercials that we're trying
to gamify good behavior a while back, right, yeah, yeah, yeah,
(35:36):
like they you know, they made those trash cans that
would blink and flash whenever you put your litter in them,
and I remember one of the others they had those
musical steps that made sounds when you use them instead
of the elevator, And it was all these little bits
of joy that we're there to encourage you to do
good things, either for you or for society. One of
the ideas that actually got implemented in Sweden was when
(35:57):
they set up the lottery at traffic lights. So you
know when you run a red light, they're all these
places where cameras will catch you and then send you
a ticket in the mail. Well, well they actually turn
that into a lottery for good drivers. So whenever you
slowed down and stopped, you were automatically put into a lottery,
and then the winners were paid out with money that
came from speeding fines. Isn't that a great idea? I
(36:19):
love it, you know, for all my hubers going into this,
I I do think you get to walk away with
the prize this week. Well, thank you very much and uh,
I'm sure we forgot some great facts about lotteries over
the years and we would love to hear those from.
You can always email us part Time Genius and How
Stuff Works dot com. You can also call us on
fact hot line that's eight six six pt Genius, or
(36:40):
as always, you can hit us up on Facebook or Twitter.
But thanks so much for listening. Thanks again for listening.
Part Time Genius is a product and of How Stuff
(37:00):
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(37:20):
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