Speaker 1: Guess what will what's that mango? So in twenty twelve,
Speaker 1: this little farming village in Spain called Sedetto was struggling
Speaker 1: and there had been this downturn in the economy. There
Speaker 1: was also this massive drought and the town's homeowner association
Speaker 1: was running short on cash. But for some reason, they
Speaker 1: decided to spend what was left of their dues on
Speaker 1: the Christmas Lottery. I guess this is kind of a
Speaker 1: Spanish tradition and the whole country gets into it, but
Speaker 1: they bought tickets for the whole town.
Speaker 2: Wow. Yeah, I've actually heard about the Christmas Lottery. I
Speaker 2: think we wrote about it a while back, and of
Speaker 2: course it being such a big deal in Spain. I
Speaker 2: actually saw this one study where people were so optimistic
Speaker 2: around the time and the Christmas Lottery, Like, even though
Speaker 2: they know they're most likely not going to win, but
Speaker 2: that optimism actually changes their opinions of politicians, and so
Speaker 2: whoever's running for reelection at the time, even if they're
Speaker 2: overwhelmingly disliked, they end up getting this big bounce because
Speaker 2: of this.
Speaker 1: Oh that's crazy. But going back to this town, they
Speaker 1: were actually really lucky. They played. The village won nine
Speaker 1: hundred fifty million dollars and it got split up among
Speaker 1: the town's seventy families. Yeah. So, like there were these
Speaker 1: unemployed construction workers, down on their luck farmers, and they
Speaker 1: all walked away like millionaires or at the very least
Speaker 1: one hundred thousand hoars. But everyone except one guy, that is.
Speaker 1: And he was this Greek gentleman who was down on
Speaker 1: his luck. He'd moved to the town for a woman
Speaker 1: and they'd just broken up, and I guess he just
Speaker 1: wasn't interested in playing and losing money, so he didn't
Speaker 1: get to cash in.
Speaker 2: Oh man, what a bummer. So he's the only one
Speaker 2: who didn't participate.
Speaker 1: Yeah, I mean, things ended up kind of all right
Speaker 1: for him. Like he'd been trying to sell his barn there,
Speaker 1: and before the lottery, no one had money to buy it.
Speaker 1: But once they did, suddenly everyone was clamoring to purchase
Speaker 1: his barn, so he ended up with a real estate deal.
Speaker 1: But today's show is all about the lottery. How do
Speaker 1: statisticians outfox the system?
Speaker 2: And why should you care.
Speaker 1: If you find Herbert Hoover on your lotto ticket? So
Speaker 1: let's dive in.
Speaker 2: Hey, their podcast listeners, welcome to part time genius. I'm
Speaker 2: Will Pearson and as always I'm joined by my good
Speaker 2: friend Mangesh how Ticketer and on the other side of
Speaker 2: the soundproof glass, hunched over the fattest stack of Georgia
Speaker 2: a lotto scratchers I think I've ever seen. I feel
Speaker 2: like he might have bought all of them, Mango. But
Speaker 2: that's our friend and producer Tristan McNeil. You know the
Speaker 2: other thing, I've noticed, this guy loves scratching these things, Mango.
Speaker 2: Have you been watching him over here?
Speaker 1: Yeah, he actually is using this special scratch off tool.
Speaker 1: It's shaped like a little ice craper, but it goes
Speaker 1: on your key ring. I think he got it off, Etsy,
Speaker 1: but I think he has it just in case of
Speaker 1: a lot of emergencies.
Speaker 2: Well, you never know what's going to happen, and I
Speaker 2: do wish you luck, Tristan. But the truth is, winning
Speaker 2: the lottery is a universally accepted long shot. It's up
Speaker 2: there with being struck by lightning or crushed by a meteor,
Speaker 2: except in the case of winning the lotto, your odds
Speaker 2: are actually much much worse, you know. Yet despite that,
Speaker 2: despite knowing, the odds are ridiculously long millions of people
Speaker 2: around the world will still pony up for lotteries every
Speaker 2: single year. So with that in mind, we thought it'd
Speaker 2: be interesting to explore the psychology behind why people play
Speaker 2: the lottery, including how playing changes lives. Plus along the way,
Speaker 2: we'll check out the stories of a few enterprising gamblers
Speaker 2: who found pretty clever ways to game the system and
Speaker 2: beat those odds. But before we get to that, I
Speaker 2: know you did some digging this week into the history
Speaker 2: of lottery, so can you fill us in just a
Speaker 2: little bit on that before we get to anything else.
Speaker 1: Yeah, So, what's crazy is that lotteries are basically as
Speaker 1: old as arithmetic, and you can actually find stories of
Speaker 1: lotteries in the Bible. In fact, the first lotteries weren't
Speaker 1: really about winning prize money like in the Old Testament.
Speaker 1: There are all these references to land lotteries, and Moses
Speaker 1: actually used one to divvy up portions of the promised
Speaker 1: land along the Jordan River. Er think this worked similar
Speaker 1: to how we play powerball, Like the tribes of Israel
Speaker 1: would have each taken a differently shaped or marked stone
Speaker 1: and dropped it into a clay pot or maybe wrapped
Speaker 1: it up in a piece of cloth and then they
Speaker 1: would have shaken up all the stones and drawn one
Speaker 1: for each piece of land on the docket. But ancient
Speaker 1: lotteries also had these other uses, Like in the sixth
Speaker 1: century BC, Athenians chose most of their government officials through sortition,
Speaker 1: which is actually a term for when political representatives are
Speaker 1: selected at random by people casting or drawing lots.
Speaker 2: Which seems like a weird fit for that to have
Speaker 2: been in Athens. I mean, like it wasn't Athens like
Speaker 2: the birthplace of democracy.
Speaker 1: Yeah, And that's actually the thing, Like the Athenians actually
Speaker 1: viewed the lottery as more democratic than elections, and they're
Speaker 1: thinking was that, you know, politicians or wealthy citizens could
Speaker 1: easily rig the outcomes of elections, and to them, sortians
Speaker 1: just seemed like the safer option. So while Athens did
Speaker 1: hold elections for a few positions, the bulk of the
Speaker 1: appointments were simply left to chance. And the way it
Speaker 1: worked was that any free men over the age of
Speaker 1: eighteen was entered into a lottery, and if their name
Speaker 1: was drawn, they would either be assigned a term as
Speaker 1: a juror or as a member of the citizen council.
Speaker 2: I'm curious, So, like, how exactly did they run this lottery?
Speaker 2: It sounds like they were trying to sort through and
Speaker 2: pick from a lot of people, right.
Speaker 1: Yeah, And it wasn't done powerball style. They actually had
Speaker 1: a special device called a claritarian. It's to help ensure
Speaker 1: that the draws were as random as possible. And it
Speaker 1: was basically this massive stone slab and it had these
Speaker 1: tiny slots in it for putting tokens in, and each
Speaker 1: token identified a different person in the lottery. And then
Speaker 1: they had this long tube connected to the side of
Speaker 1: the slab, and when officials poured a bunch of black
Speaker 1: and white pebbles into the tube, I mean, this is ingenious.
Speaker 1: The pebbles would just scatter across the slab and land
Speaker 1: on different tokens, and that indicated who would receive physicians
Speaker 1: and who would be dismissed. And I don't know, it
Speaker 1: kind of feels like something out of the Flintstones.
Speaker 2: Price is right, that's pretty great, you know. Actually, lotteries
Speaker 2: are so much more on when they include these weird
Speaker 2: gadgets or honestly, these like overly complicated systems for choosing
Speaker 2: their winners and just in doing your other digging. Did
Speaker 2: you find any other early examples of weirdness like this?
Speaker 1: Yeah? I mean, I think you would have liked the
Speaker 1: lottery style game that they played in China during the
Speaker 1: Han dynasty. It was typically played on I guess a
Speaker 1: white ticket and players would select like a series of
Speaker 1: numbers of characters, and if their picks were chosen in
Speaker 1: the random drawing, then they'd be senter prize. But this
Speaker 1: is where it gets special, right, because how do you
Speaker 1: communicate the winning numbers when all your players are spread
Speaker 1: out across a bunch of rural villages?
Speaker 2: All right, well, we're talking ancient China, So I'm going
Speaker 2: to go with I don't know, like a fireworks display
Speaker 2: or something.
Speaker 1: I mean, that would be so fun, right to watch
Speaker 1: these fireworks sort of reveal the answers. But fireworks were
Speaker 1: still a few centuries away at this point, so instead,
Speaker 1: these Chinese governments used birds to deliver the results to villages,
Speaker 1: Like they had a whole fleet of carrier pigeons that
Speaker 1: would carry the results from village to village, and then
Speaker 1: they'd also collect the winning tickets along the way. And
Speaker 1: in fact, this is actually where the game got its
Speaker 1: original name, bige Po I know I'm pronouncing that wrong,
Speaker 1: but roughly translated, it's called a white pigeon ticket.
Speaker 2: I mean, that's pretty cool. So do people still play
Speaker 2: this white pigeon ticket game today?
Speaker 1: They do, except now the game has been rebranded as Keino.
Speaker 1: They've I guess stripped the pigeons out of the game,
Speaker 1: which feels like a major loss to me.
Speaker 2: That's a huge mistake.
Speaker 1: Yeah, but Quino is still a huge money maker for casinos.
Speaker 1: Even two thousand years ago, the game was this big
Speaker 1: financial windfall for China. It was supposedly invented by a
Speaker 1: warlord who's named Chung Lun. He'd been looking for a
Speaker 1: way to get citizens to help fund his army, and
Speaker 1: selling those white pigeon tickets proved a great way to
Speaker 1: do just that. Pretty soon the game was being used
Speaker 1: to fund not just the military, but all sorts of
Speaker 1: other public works projects, and in fact, one version of
Speaker 1: the game supposedly helped pay for the Great Wall of China.
Speaker 2: You know, that was one of the surprising things as
Speaker 2: we were doing our research for this week, was realizing
Speaker 2: how many of these huge projects were funded by lotteries.
Speaker 2: I was actually reading just recently about colonial America and
Speaker 2: that it was largely built using revenue from lotteries. Like
Speaker 2: apparently lotteries had made their way to America shores. I
Speaker 2: think it was back in the sixteenth century. And this
Speaker 2: was really around the same time that they were catching
Speaker 2: on in Europe. So I guess in places like Italy
Speaker 2: and France and England, they'd all borrowed a page from
Speaker 2: China's playbook because they realized that lotteries were a smart
Speaker 2: way to raise money for these various civic projects. And
Speaker 2: so it's kind of crazy how early it was being
Speaker 2: used in America too. You look back around sixteen twelve,
Speaker 2: you had the Virginia Company of London that actually held
Speaker 2: a lottery to support the struggling Jamestown colony and really
Speaker 2: used it to save the settlers there from starvation. But
Speaker 2: it was used in these other pitole moments too, like
Speaker 2: you know, seventeen seventy six you had the Constitutional Congress
Speaker 2: holding a lottery to finance soldiers for the Revolutionary Wars
Speaker 2: or and then even after the war was won, the
Speaker 2: New States relied on these lotteries for much more of
Speaker 2: their revenue. And you know, after all, unfair taxation had
Speaker 2: been a big part of the war. So you can
Speaker 2: see why this alternative way to raise money was so
Speaker 2: appealing to politicians. It was, you know, just so much
Speaker 2: easier than creating a new tax.
Speaker 1: I mean, it's funny because people often refer to the
Speaker 1: lottery as, I don't know, like a voluntary tax.
Speaker 2: Yeah, and you know, that's actually how one of the
Speaker 2: founding fathers felt about lotteries too. And I'm talking about
Speaker 2: Thomas Jefferson here, and he wrote a good bit about it.
Speaker 2: So once he wrote about it, he said, far from
Speaker 2: being immoral, they are indispensable to the existence of man.
Speaker 2: Their attacks laid on the willing only. Of course, Jefferson
Speaker 2: was more than a little bit biased in this situation.
Speaker 2: I mean that quote comes from a letter that he
Speaker 2: was writing to the Virginia legislature. And he was writing
Speaker 2: this because he was looking for permission to hold his
Speaker 2: own lottery. And I was actually looking into why he
Speaker 2: was doing this, and the whole reason he wanted to
Speaker 2: do it was to pay off some of his debts.
Speaker 2: It's pretty pretty fun.
Speaker 1: That's pretty amazing.
Speaker 2: Yeah, But you know what's weird is that there's this
Speaker 2: whole idea that lotteries are really kind of this voluntary tax, right, Like,
Speaker 2: it's only a tax if you're willing to buy in.
Speaker 2: But there's actually pretty strong evidence that suggests that longtime
Speaker 2: lotto players are induced to play a game that maybe
Speaker 2: they otherwise wouldn't.
Speaker 1: So explain that a little like, what do you mean
Speaker 1: by that?
Speaker 2: All right, Well, it might be helpful just to give
Speaker 2: a little bit of background on who's playing the lottery.
Speaker 2: So I was looking at this information from Gallup, and
Speaker 2: it was showing that nearly half of all US adults
Speaker 2: have played a state lottery at least once in their lives.
Speaker 2: That's not that surprising. But then if you look a
Speaker 2: little bit closer, the vast majority of those tickets are
Speaker 2: bought by just twenty percent of the population, And as
Speaker 2: you might guess, most of those players who make up
Speaker 2: that twenty percent are actually among the poorest in the country.
Speaker 2: In fact, according to a study from Duke this was
Speaker 2: done back in the nineteen eighties, the poorest third of
Speaker 2: American households by roughly half of the lottery tickets that
Speaker 2: are sold. There's more recent data, and this is what's
Speaker 2: even more disturbing, is that on average, households that make
Speaker 2: less than twelve thousand dollars a year spend a full
Speaker 2: five percent of their incomes on lotteries. Five percent of
Speaker 2: their incomes on lotteries. It's pretty tragic to see that.
Speaker 1: That's horrifying. So, I mean, there are so many things
Speaker 1: that work against the poor. Like I was reading about
Speaker 1: I'm pretty sure it was Chicago, but it was about
Speaker 1: parking tickets, where if you get a ticket and you
Speaker 1: don't pay in time, the price automatically skyrockets, and if
Speaker 1: you can't pay that, they boot your car or take
Speaker 1: away your license, which then makes it harder to get
Speaker 1: to your job to pay that ticket. And that's actually
Speaker 1: been driving a ton of bankruptcies in the city. I mean,
Speaker 1: I guess if you're desperate and you're looking for a
Speaker 1: fast fix for your financial troubles, like playing the lottery
Speaker 1: seems like the quickest way out. At least that's how
Speaker 1: I think about it. But it sounds like you're saying
Speaker 1: it's more than that, Like these people are actually being
Speaker 1: misled or maybe duped or something.
Speaker 2: Yeah, and you know, this actually goes back to a
Speaker 2: two thousand and eight study. You like the number of
Speaker 2: studies I'm quoting today. I'm just breathed on. All these
Speaker 2: studies came armed with them. But this was a group
Speaker 2: of behavioral economists there at Carnegie Mellon, and so what
Speaker 2: they were looking to is, is it really like the
Speaker 2: reason why poor people are so much more likely to
Speaker 2: play the lottery than those who are better off? And
Speaker 2: what they found was that a lot of the desire
Speaker 2: that drives these low income players isn't so much from
Speaker 2: being poor as it is from feeling poor. So here's
Speaker 2: how the studies authors broke down their findings. It says
Speaker 2: in experiment one, participants were more likely to purchase lottery
Speaker 2: tickets when they were primed to perceive that their own
Speaker 2: income was low relative to the implicit standard. And then
Speaker 2: an experiment too, participants purchased more lottery tickets when they
Speaker 2: considered non lottery situations in which rich people or poor
Speaker 2: people receive advantages, implicitly highlighting the fact that everyone has
Speaker 2: an equal chance of winning the lottery.
Speaker 1: So basically, when you make people feel poor, they play
Speaker 1: the lottery more. And when they feel like it's equal like,
Speaker 1: then they want to put money on it because they
Speaker 1: feel like it's a fair game. I mean, it's kind
Speaker 1: of heartbreaking when you think about how low their chances
Speaker 1: of winning actually are though.
Speaker 2: Right, Yeah, And I actually found yet another study, and
Speaker 2: this comes from the late eighties.
Speaker 1: Justly have studies.
Speaker 2: I'm coming with, so many of them have almost as
Speaker 2: many studies as Tristan has scratch off tickets. Not quite anyway,
Speaker 2: this one's a good one too. So this was also
Speaker 2: in the late eighties, and the researchers discovered that lottery
Speaker 2: ticket sales in California, they rise along with the poverty rate,
Speaker 2: but movie ticket sales actually don't. And so what that
Speaker 2: says is that people don't just play the lottery for fun.
Speaker 2: They're playing it out of desperation. So, you know, all
Speaker 2: too often the lottery becomes a way for states to
Speaker 2: shift the cost of government services from, you know, from
Speaker 2: the wealthier citizens onto honestly like the most hopeless ones.
Speaker 1: All right, Well, now that you've got us all righteously
Speaker 1: indignant about the lottery, here's what I want to talk about.
Speaker 1: Nerdy geniuses who out fox the system and made a
Speaker 1: lot of payout big time.
Speaker 2: All right, that sounds like a good idea. But before
Speaker 2: we do that, let's take a quick break. You're listening
Speaker 2: to part time genius. So we're talking about some of
Speaker 2: the most brazen lottery scams in history. All right, mego,
Speaker 2: So let's live vicariously for a minute through some of
Speaker 2: these lotto legends. So who do you want to talk about? First?
Speaker 1: Okay? So first I've got to tell you about Mohen
Speaker 1: sivas the He is this MIT trained statistician who actually
Speaker 1: found a flaw in a certain scratch off game from
Speaker 1: the Ontario Lottery and this effectively allowed him to predict
Speaker 1: winning cards about ninety percent.
Speaker 2: Of the time. Oh wow, So what's his story?
Speaker 1: So Mowen wasn't really interested in playing the lotto, much
Speaker 1: less exploiting it. But one day, and this was back
Speaker 1: in two thousand and three, he found some old scratch
Speaker 1: offs on his desks that have been part of this
Speaker 1: gag gift I guess someone gave him, and on a whim,
Speaker 1: he scratched off one and won three dollars. So he's
Speaker 1: walking to cash in his ticket on his lunch break,
Speaker 1: and as he's thinking about it, he started thinking about
Speaker 1: how scratch offs must be made right, and it dawned
Speaker 1: on him that the tickets are obviously mass produced, which
Speaker 1: means that a computer program must be involved in laying
Speaker 1: out the numbers on each ticket.
Speaker 2: Yeah, I get that, But it's all random, isn't it.
Speaker 2: Like that's probably another reason ticket makers use a computer,
Speaker 2: because there's no way a human could actually design that
Speaker 2: many tickets and still keep the numbering completely random, right, Sure?
Speaker 1: But Moan realized that the computers can't be generating truly
Speaker 1: random numbers either. Like if they were, though, I mean,
Speaker 1: the lottery company had no control over the actual number
Speaker 1: of winning tickets produced, and if that were the case,
Speaker 1: it would mean that some ticket packets would have very
Speaker 1: few winners or maybe even none at all. And obviously
Speaker 1: it would be tough to get retailers and also players
Speaker 1: to keep buying those tickets if so many of those
Speaker 1: cards were duds.
Speaker 2: Okay, that makes sense. So if the tickets like they
Speaker 2: can kind of have to have the illusion of randomness
Speaker 2: while actually being incredibly ordered beneath the surface, is that
Speaker 2: what you're saying exactly?
Speaker 1: And once Moan figured this out, he decided to try
Speaker 1: and crack the algorithm that generated all those numbers, you know,
Speaker 1: just for fun, because he was from MIT and a statistician, right,
Speaker 1: so he sat down to study this one tic TAC
Speaker 1: toe scratch off game he'd been playing, and after just
Speaker 1: a few hours he discovered that the visible numbers on
Speaker 1: the ticket actually dictated which digits were hidden under the
Speaker 1: latex coding. So basically, every ticket had like eight tic
Speaker 1: tac toe game boards on it, and each board would
Speaker 1: contain some visible numbers. But if you look to see
Speaker 1: how many times those numbers repeated on the card, and
Speaker 1: mostly it was if a number was a singleton and
Speaker 1: not repeating, you could actually tell which cards were winners,
Speaker 1: and the prize money could be anywhere between three dollars
Speaker 1: and fifty thousand dollars.
Speaker 2: Okay, all right, I mean, I know it all sounds complicated,
Speaker 2: But what I find so fascinating about this is, as
Speaker 2: you're saying, Mohen basically found a way to determine if
Speaker 2: a ticket was a winner without having to scratch anything off, right,
Speaker 2: And you're saying he got this trick to work like
Speaker 2: ninety percent of the time, the guy must have made
Speaker 2: a fortune.
Speaker 1: So that's the weirdest part. Moon really did this for
Speaker 1: the love of math and not money. In fact, once
Speaker 1: he was sure his technique worked, he actually contacted the
Speaker 1: Ontario Lottery Gaming Corporation and told him about the flaw
Speaker 1: he'd found. And it's funny because he told NPR that
Speaker 1: he was playing telephone tag with lottery, and when they
Speaker 1: finally got to talk to one another, they kind of
Speaker 1: didn't believe him. So he sent them twenty unscratched cards
Speaker 1: and separated them into what he thought would be winning
Speaker 1: cards and duds. And when they scratched them off and
Speaker 1: realized he predicted correctly, that's when they called him back.
Speaker 2: Oh man, I bet he felt pretty awesome. That's pretty wild.
Speaker 1: Yeah, I mean, he later discovered the problem wasn't exclusive
Speaker 1: to Ontario. I mean, it kind of makes sense, right.
Speaker 1: It turned out the same trick was also being employed
Speaker 1: in Colorado, though when he analyzed those cards, he could
Speaker 1: only figure him out with seventy percent accuracy.
Speaker 2: And that's still pretty impressive. I mean, you know, as
Speaker 2: nice as it was for Mowen to come clean about
Speaker 2: his discovery, I feel like that's certainly not how most
Speaker 2: attempts to game the lottery turnout. And I was just
Speaker 2: looking at some other cases, you know, if you take
Speaker 2: the case of Jerry and Marge Selby, for instance, and
Speaker 2: this comes from this great story by Jason FAGONI and
Speaker 2: we actually had Jason on the program earlier this year
Speaker 2: to talk about his book. It was called The Woman
Speaker 2: Who Smashed Codes.
Speaker 1: I mean, that was honestly one of my favorite episodes.
Speaker 1: Is so fascinating, and my mom just bought that book
Speaker 1: because she loved Jason so much. But tell me about
Speaker 1: the Selby's.
Speaker 2: All right, So they're from Michigan and they were basically
Speaker 2: among the first players to find a flaw in a
Speaker 2: state lottery game. The game was called Windfall, and this
Speaker 2: was back in two thousand and three, and it came
Speaker 2: down to this unique quirk and wind falls rules, namely,
Speaker 2: whenever the jackpot would rise to roughly two million dollars
Speaker 2: or so without anybody winning it, the payoffs for smaller
Speaker 2: prizes increased dramatically. So basically, if a player waited until
Speaker 2: this so called roll down period, which typically lasted for
Speaker 2: a few days every three months or so, they would
Speaker 2: stay to win more than they lost. Then. Of course,
Speaker 2: this is on average, and so if they were to
Speaker 2: buy an especially high number of tickets during that rolldown,
Speaker 2: say like you know, one hundred thousand dollars worth, then
Speaker 2: they would be practically guaranteed to turn a ten to
Speaker 2: fifteen percent profit.
Speaker 1: Okay, So the more tickets a player buys during the
Speaker 1: special period, the more money they're kind of assured to win.
Speaker 1: So I'm curious how many tickets did Jerry and March
Speaker 1: go in on.
Speaker 2: It was unbelievable, the number of tickets. I mean, they
Speaker 2: basically treated Windfall like their retirement plan, and they played
Speaker 2: for the better part of a decade. In fact, Michigan
Speaker 2: retired the game, only for Massachusetts to roll out their
Speaker 2: own versions soon after, and so the Selby's actually took
Speaker 2: their ticket buying operation on the road. What they would
Speaker 2: do is they just pile into their truck, they'd drive
Speaker 2: the twelve hours or so to Massachusetts, and then they'd
Speaker 2: set up shop in two separate convenience stores, printing ream
Speaker 2: after ream of tickets for honestly, for hours at a time.
Speaker 1: So I've been stuck in bodegos behind people playing the lotto,
Speaker 1: and it's so frustrating, Like you can be there for
Speaker 1: like ten minutes or fifteen minutes. It can take forever
Speaker 1: when you're in a rush. But how many tickets are
Speaker 1: we actually talking about here?
Speaker 2: You are not going to believe this. So, at the
Speaker 2: height of their scheme. The couple was spending over six
Speaker 2: hundred thousand dollars on a single play of Windfall. Keep
Speaker 2: this in mind, we're talking two dollars a pop here,
Speaker 2: so that means they had more than three hundred thousand
Speaker 2: tickets that week.
Speaker 1: That's insane. So I'm always nervous when I see people
Speaker 1: gambling and gambling with such ridiculous amounts of money, like,
Speaker 1: I'm so afraid they're gonna lose it. And you know,
Speaker 1: my favorite thing to do in Las Vegas is to
Speaker 1: go up to an ATM and act like I've won
Speaker 1: when it spits out cash, because I do not want
Speaker 1: to get ripped off by machines. But obviously these people
Speaker 1: are made of much stronger stuff than I am. So
Speaker 1: how much did they end up making?
Speaker 2: Well, the Selby's actually didn't play alone, at least not
Speaker 2: the whole time. There was one point where they started
Speaker 2: this company called GS Investment Strategies. I love that that's
Speaker 2: the name of their company for some reason, firm I know.
Speaker 2: So basically, it was a betting group that consisted of
Speaker 2: the Selby's and their extended family and friends. And just
Speaker 2: looking at the you know the list of people in
Speaker 2: this it's pretty funny. It included a state trooper, a
Speaker 2: parole officer, three lawyers, among all these others that were playing,
Speaker 2: and at their final tally, they managed to get almost
Speaker 2: eight million dollars. It was just shy of eight million
Speaker 2: dollars before taxes, and of course all that was divvied
Speaker 2: up among the company's twenty five players. So really not
Speaker 2: a bad haul for nine years of printing out these
Speaker 2: slips of paper. But you know it, actually it was
Speaker 2: a little bit short of what this small group of
Speaker 2: MIT students managed to win. And this was off the
Speaker 2: very same game. This was between two thousand and four
Speaker 2: and twenty ten. The students made actually just a little
Speaker 2: bit over eight million dollars in profit.
Speaker 1: So I've still kind of blown away that this happened.
Speaker 1: I mean, like, why didn't the lottery commissions of these
Speaker 1: states wise up to what was happening. You've got these
Speaker 1: multiple groups of people pulling off the same scheme for
Speaker 1: like a decade and obviously buying massive amounts of tickets.
Speaker 2: Well, I mean, this may be the weirdest part of
Speaker 2: all of this is that somebody did notice, and this
Speaker 2: was in twenty twelve. There was an investigation into the
Speaker 2: Windfall Game, and that investigation revealed that the Massachusetts Lottery
Speaker 2: had known all about the MIT students and the Selby's
Speaker 2: per years. What has actually done nothing to stop them. Apparently,
Speaker 2: lottery officials had been the rules so that the high
Speaker 2: stakes players could buy hundreds of thousands of tickets because
Speaker 2: you know, the added revenue and the success this brought
Speaker 2: to the lottery and of course by extension to the state,
Speaker 2: they just considered it worth it. But you know, in
Speaker 2: the end, even though none of this was technically illegal,
Speaker 2: the state Treasurer who oversees the lottery, they officially shut
Speaker 2: down the wind Fall Game in twenty twelve, and of
Speaker 2: course this put an end to the player's long winning
Speaker 2: streak at that point.
Speaker 1: Yeah, but I mean they made eight million dollars on it,
Speaker 1: so it's not that bad.
Speaker 2: Yeah, it is saying.
Speaker 1: That they figure this out, but it also seems to
Speaker 1: suggest that, like once you find a game that's beatable,
Speaker 1: you need lots of money to win, right, Like these
Speaker 1: MIT students, the Selby's, they all had the resources to
Speaker 1: buy up hundreds of thousands of dollars worth of tickets,
Speaker 1: which is what allowed them to win as often as
Speaker 1: they did. Meanwhile, you know, the people who couldn't afford
Speaker 1: enough tickets to gain that statistical advantage, they're kind of
Speaker 1: shut out. And not only that, but it's really the
Speaker 1: poor folks money that's going to all the payouts. You
Speaker 1: know that said, I mean, I don't want to give
Speaker 1: the impression that lotteries are zero sum game for society,
Speaker 1: Like like we were saying at the top of the show.
Speaker 1: You know, countries have been putting lottery revenue to good
Speaker 1: use for centuries, and that's still true today. So even
Speaker 1: if you feel squeamish about who these games might be targeting,
Speaker 1: like I do, it's still worth taking a look at
Speaker 1: the benefits that come from them.
Speaker 2: Yeah, I agree with that. But but before we get
Speaker 2: to that, let's take one more quick break. All right, Mango,
Speaker 2: So cluisen, where exactly does all this lottery money go?
Speaker 1: Well, first, let's clarify how much money we're talking about here.
Speaker 1: So when you actually add up all the revenue from
Speaker 1: the modern US lottery industry, all the sales you know,
Speaker 1: from cash drawings, the instant win scratch offs, video lottery games,
Speaker 1: keino like, you wind up with a yearly total of
Speaker 1: eighty billion dollars.
Speaker 2: Oh my god, that's stunning.
Speaker 1: And just to put that in perspective, movie ticket sales
Speaker 1: in the US add up to only about eleven billion
Speaker 1: dollars annually. In fact, that eighty billion is more than
Speaker 1: American spend every year, not only on movie tickets, but
Speaker 1: also on sports tickets, books, video games, music sales, all
Speaker 1: that combined.
Speaker 2: That's crazy, all right. So obviously we love to gamble,
Speaker 2: and that must mean that we're getting something out of
Speaker 2: the deal, right though, So how much of that eighty
Speaker 2: billion ends up in the player's pockets.
Speaker 1: It's way more than you think. Like, I was actually
Speaker 1: surprised to hear this, but over fifty billion of that
Speaker 1: tot goes to players in the former prizes.
Speaker 2: Oh yeah, I wouldn't have guessed that.
Speaker 1: Yeah, And then another eight billion is used to cover
Speaker 1: the cost of the lotteries themselves, So like this is
Speaker 1: the boring stuff like printing, advertising, design, employee salaries, vendor fees.
Speaker 1: But the remaining twenty two billion, which you know is
Speaker 1: still a ton of money, is funneled into public programs,
Speaker 1: and that includes everything from education and land conservation to
Speaker 1: senior assistants and even pension funds.
Speaker 2: Well, and obviously different states will claim different amounts of
Speaker 2: that profit depending on their individual sales numbers, but it's
Speaker 2: up to each state to decide what to do with
Speaker 2: their profits.
Speaker 1: Yeah, that's right. So there are currently lotteries and forty
Speaker 1: seven different US jurisdictions, which includes forty four states plus
Speaker 1: dc is on their Puerto Rico the virgin Islands, and
Speaker 1: they each get to use their money for whatever they want.
Speaker 1: So education budgets are probably the most popular choice, Like
Speaker 1: the Virginia lottery, for example, it actually puts all of
Speaker 1: its profits into a K to twelve education fund, and
Speaker 1: last year our lottery right here in Georgia actually gave
Speaker 1: out a billion dollars in profits to education programs compared
Speaker 1: to the two point seven billion it gave out in
Speaker 1: prizes to players.
Speaker 2: Wow, Army, you know, there's no denying that state run
Speaker 2: lotteries can deliver pretty big benefits to their citizens, at
Speaker 2: least generally speaking, and again, it's easy to see why
Speaker 2: most politicians would want to keep that easy money flowing
Speaker 2: through their states.
Speaker 1: Sure, But on a different note, one of the things
Speaker 1: that's really fun to hear about is the individual lottery
Speaker 1: winners who actually share their wealth. And I was reading
Speaker 1: about this guy named John Coody who split a three
Speaker 1: hundred and twenty million dollar payout with six other IT specialists,
Speaker 1: and this was back in twenty eleven.
Speaker 2: I mean, that sounds nice, but you're saying seven IT
Speaker 2: guys won that jack. But I feel like that has
Speaker 2: to be some kind of fix, like with the MIT students, right.
Speaker 1: Yeah, I mean that's possible, but considering what Coody did
Speaker 1: with his money, like, I wouldn't hold it against him.
Speaker 1: He and his wife actually decided to use a good
Speaker 1: chunk of their winnings to build this massive water park
Speaker 1: the community. And this was in Green Island, New York.
Speaker 1: They called it Spray Park, and it's dedicated to Coody's parents,
Speaker 1: who apparently used to take their kids into this I
Speaker 1: guess outdated water park in the community, and that's the
Speaker 1: one he helped replace.
Speaker 2: That's pretty sweet, and I do love these kinds of stories.
Speaker 2: I was actually reading about another lot of winning couple.
Speaker 2: They were named Alan and Violet Large, and they went
Speaker 2: about eleven million dollars back in twenty ten, and they
Speaker 2: ended up giving away ninety eight percent of it within
Speaker 2: the first year. Is that not crazy?
Speaker 1: Yeah, I mean, ninety eight percent is a lot of percent.
Speaker 1: So where did that money go?
Speaker 2: Well, according to an article in the Toronto Star, the
Speaker 2: couple donated nearly all of their winnings to the Red Cross,
Speaker 2: to their local churches, fire departments, and even the hospitals
Speaker 2: where Violet had undergone cancer treatment. And of course, while
Speaker 2: parting with that much loud is painful for you know,
Speaker 2: so many of us to even think about, it was
Speaker 2: apparently pretty easy for the Larges. There was this interview
Speaker 2: I was looking at where Violet told reporters what you've
Speaker 2: never had, you never miss I mean.
Speaker 1: It really is amazing to see people react to newfound
Speaker 1: wealth so humbly like that. Speaking of humility, did you
Speaker 1: hear about this homeless guy in Illinois who won fifty
Speaker 1: thousand dollars on a scratcher? No, apparently he'd lived in
Speaker 1: a tent in a homeless community for like thirty five
Speaker 1: years at this point, and that's when he won the money.
Speaker 1: But rather than leave his friends for a comfy home
Speaker 1: of his own, he decided to stay right where he was.
Speaker 2: Wait, so he just stayed in his tent.
Speaker 1: Yeah. He told reporters that he planned to use the
Speaker 1: money for an overdue trip to the dentist, and he
Speaker 1: also wanted to use some of the money to visit
Speaker 1: his son. But then he gave one hundred dollars to
Speaker 1: every homeless person he knew, and I'm guessing he knew
Speaker 1: a lot of them.
Speaker 2: Wow. All right, so this is kind of a tangent,
Speaker 2: but you made me think of it when you brought
Speaker 2: up scratchers again. And we've been talking about the bright
Speaker 2: side of playing the lottery throughout this segment. But there's
Speaker 2: actually a way to get enjoyment from lotteries without playing them,
Speaker 2: and the best part is it won't cost you a dime.
Speaker 2: So what's the catch, Actually, there's no catch. All you
Speaker 2: have to do is become a latologist. If by some
Speaker 2: chance you don't already know what a litologist is, I
Speaker 2: can tell you that it's a person who collects lottery tickets.
Speaker 1: So how does that cost no money?
Speaker 2: Well, because it's a collecting hobby, it's not a gambling hobby.
Speaker 2: So most litologists don't collect fresh or unused scratch cards.
Speaker 2: They're actually collecting losing tickets or maybe even winners tickets
Speaker 2: that have already been redeemed by the customers.
Speaker 1: So how many litologists are there? I feel like you
Speaker 1: keep saying they, but to me it feels like one
Speaker 1: person in his bearent's basement.
Speaker 2: Well, according to the Global Lottery Collectors Society. You may
Speaker 2: not have been familiar with the Global Lottery Collectors Society,
Speaker 2: there was a group of a few hundred passionate collectors
Speaker 2: who trade and catalog all these various scratch off games
Speaker 2: released in the US. And this one guy in particular,
Speaker 2: his name is Arthur Rain, and he has one of
Speaker 2: the biggest collections in the world. He's got over fifty
Speaker 2: seven thousand different scratchers in his collection.
Speaker 1: So that's pretty crazy. But I did notice you said
Speaker 1: one of the biggest, So what's that mean exact.
Speaker 2: Well, apparently there are one or two other people in
Speaker 2: the society with bigger collections, which I know is pretty
Speaker 2: hard to believe.
Speaker 1: So I'm curious, now, is there a holy grail for littologists? Like,
Speaker 1: is there one special scratch off that everyone would spend
Speaker 1: money on?
Speaker 2: Yeah, there definitely is. According to Rain, the most sought
Speaker 2: after scratcher is this nineteen seventy six card and it
Speaker 2: was from Illinois and it has Herbert Hoover's picture on it.
Speaker 2: Apparently it was part of a promotion where each ticket
Speaker 2: featured a different president, and once the game was over,
Speaker 2: the lottery picked one president, and anybody who submitted a
Speaker 2: losing ticket with that president's face on it would be
Speaker 2: entered to win a consolation prize. Well, Herbert Hoover ended
Speaker 2: up as the lucky President, and because so many players
Speaker 2: mailed him in, there aren't many Hoovers left in circulation.
Speaker 2: In fact, if you're lucky to find one of the
Speaker 2: three or four copies known to exist and you want
Speaker 2: to add it to your collection, it'll set you back
Speaker 2: about five hundred bucks to do so.
Speaker 1: I love that it's only worth five hundred dollars, but
Speaker 1: I mean it is a forty year old losing lottery ticket. Yeah,
Speaker 1: but I am curious, though, if the Hoover card is
Speaker 1: this exception to the rule, how are littologists getting the
Speaker 1: bulk of their collections. I mean, I get that they
Speaker 1: trade with each other, but they've got to start out
Speaker 1: with something to trade, right.
Speaker 2: Yeah, of course that's true. I mean, so many collectors
Speaker 2: actually have deals with a whole network of stores, so
Speaker 2: they'll you know, make their rounds once a week or
Speaker 2: so and they'll collect all the used tickets that a
Speaker 2: store's customers just left behind.
Speaker 1: It's such a specific hobby. It amazing.
Speaker 2: You know.
Speaker 1: It kind of reminds me of our friend Sarah, who
Speaker 1: used to find business cards on sidewalks or I guess
Speaker 1: that convention floors and collect them. And I think her
Speaker 1: big idea was that someday she was going to throw
Speaker 1: a party for all these people who wanted a network
Speaker 1: and get their name out there.
Speaker 2: But I mean it's a great idea.
Speaker 1: I know, I think it's great. Like I love to
Speaker 1: I should start leaving my business card places, but at
Speaker 1: least like a business card has value. I can't imagine
Speaker 1: keeping fifty thousand of anything in my house. You know,
Speaker 1: where do you even find the room for that?
Speaker 2: Well, that's what's funny about I read this interview with
Speaker 2: Rain from Atlas Obscura. In it, he says, I gotta
Speaker 2: beg my wife every day not to throw me out
Speaker 2: of the house.
Speaker 1: So I mean, i'd say the fact that it hasn't
Speaker 1: happened already makes them pretty lucky. And speaking of lucky,
Speaker 1: what do you say we get a little fact off going.
Speaker 1: I've got a can't lose feeling today.
Speaker 2: All right, well, let's see what you got.
Speaker 1: So well, did you know that pigeons love to gamble?
Speaker 1: According to scientific American scientists at the University of Kentucky
Speaker 1: set up these Avian gambling parlors where pigeons could peck
Speaker 1: at one symbol and reliably get a single food pellet,
Speaker 1: and this happened every single time. Or they had the
Speaker 1: option to peck at a second symbol, and this was
Speaker 1: a wild card, and most of the times they'd get nothing,
Speaker 1: but every once in a while they'd hit the jackpot
Speaker 1: and they'd get ten food pellets. But that big pay
Speaker 1: was actually way too much for them to resist. So
Speaker 1: whenever they were given a choice, the pigeons chose to gamble.
Speaker 1: And this was more than eighty percent at a time,
Speaker 1: even though the winnings were way less when you average.
Speaker 2: Them out, that's pretty good, all right. Well, in Europe
Speaker 2: and particularly Italy, there's a tradition where the lottery is
Speaker 2: drawn by blindfolded kids, which seems like kind of a
Speaker 2: weird tradition. And the idea here is that children are innocent,
Speaker 2: so this is a game you can supposedly trust. Although
Speaker 2: I feel like there have been so many studies showing
Speaker 2: that children are not at all honest on this kind
Speaker 2: of thing. But anyway, but this was before things were automated,
Speaker 2: back in the two thousands, and as it turns out,
Speaker 2: not surprisingly, the kids were part of a massive scam.
Speaker 2: They'd actually been trained to feel for these roughed up
Speaker 2: lottery balls, and when the journalists who broke the scandal
Speaker 2: started looking into this, they found that the kids were
Speaker 2: being paid in toys.
Speaker 1: So I love the idea that like you can actually
Speaker 1: fix a multimillion lottery with I don't know, like some
Speaker 1: is in an erector set.
Speaker 2: It's politics, that's all it.
Speaker 1: Tics Did you realize that it's way harder to win
Speaker 1: McDonald's monopoly game than it is to win actual lottery
Speaker 1: And apparently the odds of winning power Ball are one
Speaker 1: in one hundred and seventy five million, So already you're
Speaker 1: more likely to die on the way to playing a
Speaker 1: lot of than you are to winning it. But that
Speaker 1: one in one hundred and seventy five million is great
Speaker 1: odds compared to the odds of finding a boardwalk piece,
Speaker 1: which is one in six hundred million. And when you
Speaker 1: factor in also finding a park place, your odds of
Speaker 1: winning go down to one in three billion, isn't that
Speaker 1: the same?
Speaker 2: Wow, that's pretty great, all right. Well, in nineteen twelve,
Speaker 2: Popular Mechanics reported that a hospital in Paris had held
Speaker 2: a lottery, but they actually were giving out something a
Speaker 2: little different than money. They were giving out babies, Like
Speaker 2: if you won, you won a baby, which is I
Speaker 2: don't know. It feels like kind of a dubious prize
Speaker 2: for a lot of people, but it's the only time
Speaker 2: we know of that this has happened. But the hospital
Speaker 2: they not only consulted authorities, but they actually made sure
Speaker 2: to research whether a winning was actually good to be
Speaker 2: foster parents before they handed them a baby.
Speaker 1: I guess that sounds smart. So this feels like such luck.
Speaker 1: But when Zimbabwe ran a lottery in two thousand, the
Speaker 1: dictator and president of Zimbabwe at the time, Robert Mugabe,
Speaker 1: just happened to win it, like he won the grand
Speaker 1: prize of one hundred thousand dollars in the state run lottery.
Speaker 1: And it's kind of amazing how that happened.
Speaker 2: Yeah, just such a lucky guy, I guess. All right,
Speaker 2: all right, so I've got one more fun one. So
Speaker 2: you remember how there were all those voltswaggon commercials that
Speaker 2: were trying to gamify good behavior a while back, right, yeah,
Speaker 2: in the two thousands. Yeah, yeah, like they you know,
Speaker 2: they made those trash cans that would blink and flash
Speaker 2: whenever you put your litter in them, and I remember
Speaker 2: one of the others they had those musical steps that
Speaker 2: made sounds when you use them instead of the elevator,
Speaker 2: And it was all these little bits of joy that
Speaker 2: were there to encourage you to do good things, either
Speaker 2: for you or for society. One of the ideas that
Speaker 2: actually got implemented in Sweden was when they set up
Speaker 2: the lottery at traffic lights. So you know when you
Speaker 2: run a red light, there are all these places where cameras
Speaker 2: will catch you and then send you a ticket and
Speaker 2: the mail. Well, well they actually turn that into a
Speaker 2: lottery for good drivers. So whenever you slowed down and stopped,
Speaker 2: you were automatically put into a lottery, and then the
Speaker 2: winners were paid out with money that came from speeding fines.
Speaker 2: Isn't that a great idea?
Speaker 1: I love it, you know, for all my hubers going
Speaker 1: into this, I do think you get to walk away
Speaker 1: with the prize this week.
Speaker 2: Well, Thank you very much, and I'm sure we forgot
Speaker 2: some great facts about lotteries over the years and we
Speaker 2: would love to hear those from. You can always email
Speaker 2: us part Time Genius at HowStuffWorks dot com. You can
Speaker 2: also call us on our twenty four to seven fact
Speaker 2: hotline that's eight six six pt Genius, or as always,
Speaker 2: you can hit us up on Facebook or Twitter. But
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