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