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The paper's reporting revealed that two groups were dominating Cash Winfall: the Selbee gang from Evart, Michigan, and their competition, a syndicate led by math majors from MIT, the Massachusetts Institute of Technology. These were kids young enough to be the Selbees' grandchildren.

Incredibly, the MIT group bet between $17 and $18 million on Cash Winfall over a seven-year period, earning at least $3.5 million in profits. Almost the exact same rate of return as the Selbees.

A nice illustration of the fact that there is only one mathematics, and it's equally available to everyone!




Based on the numbers alone, that's about a 20% return for the MIT group, for an annualized return (not considering compound interest) of less than 3% per year. Does this suggest that those trying to game the lottery should just turn to investing in the market? It's amusing to see that the market, which is less structured in probability and more volatile, outperforms the lottery in this aspect.


That doesn't mean they had that amount of capital under investment.

If you bet $10 every week, and every week you win $11, at the end of the year you've bet $520 and made a profit of $52. But you never had more than $10 "invested".

If that $18 million was evenly spread out over 7 years, it would be close to $50k/week, or $215k/month. Those are probably more accurate amounts of working capital for calculating ROI.


Yeah, the way the article phrased it, I have a feeling this is a useless statistic like the sum total of all the money spent on tickets.


The money is only tied up for a few days of the year while they hold tickets though, the rest of the time it could be sitting in a suitably liquid investment. In that sense it far outperforms the market.


Um, needing millions to risk on this means it isn't "available to everyone".

And yes, it is a risk, even if your mask is solid. There's always the risk that the lottery commission could say "oh, come on, the terms and conditions prohibit this kind of thing", leading to a protracted legal battle.


If you have a 60% rate of return from a single play, it only takes some 15 rounds of compounding to pass your first million, starting with $1000.


> There's always the risk that the lottery commission could say "oh, come on, the terms and conditions prohibit this kind of thing", leading to a protracted legal battle.

Not sure why this is down-voted. It's spot on.


Think downvoting is on first half of the comment because as is noted already, compounding.

On the legal topic, I think it’s not a prohibitive risk. It’s completely in the game’s design and completely within the lottery’s control as they basically control distribution. Running a casino isn’t a risk free operation, miscalculations cost money.


Probably because it didn't happen; these people got away with it for years, and don't seem to be in any hot water.

They bought tickets and won due to the inherent probability of the game, fair and square. No inside information, no gaming of anything.

What supposed to make mass ticket buying non-profitable is the expected return being < 1, not any hidden terms and conditions.


On the other hand, in arbitrage, it’s winner takes all.




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