To all the folks saying, "how did the State not know the odds?", a lot of gambling games come out without anyone running the odds. A great example is blackjack switch [0]. The game was invented by an ex-gambler and he never really knew the odds of the game. He just convinced some casinos to try it and would advertise what their average take was. Because most people are bad at math and wouldn't play well, it was always bigger than the actual house advantage anyway.
It was only years later that someone finally ran the numbers and figured out the actual house advantage of the game [1], but no one cared because everyone who had a table was making money on it. Even with regular blackjack, the casinos always make way more than the statistical house advantage because people play poorly.
It was probably the same deal here. The State didn't care what they actual odds were, they just cared that they were making money on it.
I work in the gambling industry and live in au. From my perspective this is super strange. By law vendors have to publish the odd (and on some games the EV).
Lotteries are required to publish the odds of matching x out of y numbers. Once the design is fixed, this figure does not change.
The expected dollar value of a winning ticket, on the other hand, changes every week depending on the number of tickets sold that week as well as the amount of any unclaimed jackpot(s) rolled over from previous weeks. I won't be surprised if state lotteries are not legally required to publish these figures every week. Nobody wants to be held responsible for a precise amount published on Tuesday when a snowstorm on Friday causes ticket sales to plummet.
Many states do publish estimates of the jackpot, of course, for advertising purposes. But they're only estimates, and I've never seen estimates of anything other than the jackpot. The Selbees took advantage of smaller winnings that usually go unnoticed.
I took his comment to mean that players doing the math isn't common. The operators know the odds and they publish those odds. Players often don't care what the odds actually mean (doing the math) and they'll play anyways.
I think these people just didn't read the article. Given the state made money, it knew what the odds were. It seemed the only reason there was an investigation was to see the real world outcome of how the game was setup. What may be more remarkable is that the state didn't have the analytics to notice this trend before-hand.
The title is misleading. There was no loop-hole. There was simply a structure of the game and the people in the article were able to exploit that structure. They were playing the same rules as everyone else. Buy tickets. They just figured out the right time and the right volume for buying tickets.
I don't know how the lottery works, but I imagine he also got a bit lucky. Apparently there wasn't enough people who caught on to the trick to significantly put a dent in his game. He was also lucky that the game wasn't popular enough to prevent triggering the roll-downs. Playing just 7 times a year even over the course of 7 years isn't a great sample size to account for long term variance. I wonder if there was a chance he could have lost money on some plays.
It was only years later that someone finally ran the numbers and figured out the actual house advantage of the game [1], but no one cared because everyone who had a table was making money on it. Even with regular blackjack, the casinos always make way more than the statistical house advantage because people play poorly.
It was probably the same deal here. The State didn't care what they actual odds were, they just cared that they were making money on it.
[0] https://en.wikipedia.org/wiki/Blackjack_Switch
[1] https://wizardofodds.com/games/blackjack/switch/