Did no one notice that the lottery always lost huge sums of money during the Rolldown draws, while it gained money on normal draws (as it should always be the case)? No one noticed that certain convenience stores suddenly sold hundreds of thousands worth of tickets in these draws, while most other stores sold a normal amount?
So they sold more tickets, and made more payouts on lesser tickets. Exactly as they planned. The lottery doesn't actually lose out - it's just emptying the pot (which was filled in previous games) in return for increased sales.
It's the old adage "the house never loses" - if 50% goes in the pot and 50% goes in their pockets, it doesn't matter who wins the pot - their 50% doesn't change. If a mechanic creates an incentive for more sales, their take increases. Fantastic. But if popular perception becomes that the game is rigged, less people buy tickets - and their take decreases.
(We had an office draw that'd run for months at a time, until someone eventually won. But we wouldn't take new players until the pot had been emptied, as someone joining for the last 2 rounds and winning everything, lost us more players than we gained. That is essentially the long-term risk here too. 10 people paying in until one of them wins, feels fair. 10 people paying in until the 11th wins, doesn't. And when the game stops feeling fair, you start to lose the feeders that fill the pot in the first place.)
So there's a collectivism that goes into a growing pot. This is the only thing that really makes a "rollover" enticing to players. If each draw was an isolated incident, the "windfall" mechanic the article describes would be in place for every draw. So a collective pitches in, and the pot is distributed amongst the collective's members (the players) according to how successful each ticket is. So if there's no 6-number winners, there's more left in the pot for the 5-number winners. If there's 5-number winners, there's more left in the pot for the 4-number winners, etc.
(Either that, or the house makes out like bandits. State lotteries are usually regulated to keep a distinction between the pot and the profit, hence such pot-emptying mechanisms.)
But if the pot rolls over - it's not distributed, but added to the pot for the next draw - you now have more than one collective. One collective that's contributed to the pot (over n draws), and one collective that participates in the winning game (over 1 draw). And if there's a significant disconnect between the two, then yes - as one commenter put it, sour grapes. It's the difference between feeling like you've lost a fair game, and feeling like you've been hustled.
Technically it makes zero difference. But if it makes people less inclined to play in future, then it's bad for the long-term health of the game.
The state never "loses." In this case, for example, the MIT group "17 and $18 million ... over a seven-year period, earning at least $3.5 million in profits," yet the state made $120 million. Even if the state noticed, why would they care? Pay out $3.5 million to make $120 million? Why not. The problem is that it :"sounds" rigged.
>No one noticed that certain convenience stores suddenly sold hundreds of thousands worth of tickets in these draws, while most other stores sold a normal amount?
Someone noticed, because they tipped off the Boston Globe that "in certain Massachussetts locations, Cash Winfall tickets were being sold at an extraordinary volume." Again, it "sounds" rigged.
The average person is not going to think that a lottery has a "loophole" in it. The average person thinks something like that can't happen.
They also did notice.
>And, there was also the fact that lottery officials in Massachusetts had started to figure out that the Selbees and the MIT students had identified an advantage, but had done very little to combat it.
>"How do I become a member of the [Selbees'] club when I retire?" one lottery official joked in an email that later became public.
End of the day, the providers don’t have much interest in finding problems, and the states have limited ability to detect them. Protecting the integrity of the system can be largely addressed with PR.