Speaker 1: Guess what will what's that man go? So in two
Speaker 1: thousand twelve, this little farming village in Spain called Sodetto
Speaker 1: was struggling and there had been this downturn in the economy.
Speaker 1: There was also this massive drought and the town's homeowner
Speaker 1: association was running short on cash. But for some reason
Speaker 1: they decided to spend what was left of their dues
Speaker 1: on the Christmas Lottery. I guess this is kind of
Speaker 1: a Spanish tradition and the whole country gets into it,
Speaker 1: but they bought tickets for the whole town. Wow. Yeah,
Speaker 1: I've actually heard about the Christmas Lottery. I think we
Speaker 1: wrote about it a while back, and of course it
Speaker 1: being such a big deal in Spain. Actually saw this
Speaker 1: one study where people were so optimistic around the time
Speaker 1: and the Christmas Lottery, Like, even though they know they're
Speaker 1: most likely not going to win, but that optimism actually
Speaker 1: changes their opinions of politicians, and so whoever's running for
Speaker 1: reelection at the time, even if they're overwhelmingly disliked, they
Speaker 1: end up getting this big bounce because of this. Oh
Speaker 1: that's crazy. But going back to this town, they were
Speaker 1: actually really lucky. They played the village when fifty million
Speaker 1: dollars and it got split up among the towns seventy families. Yeah, so,
Speaker 1: like there were these unemployed construction workers, are down on
Speaker 1: their luck farmers, and they all walked away like millionaires
Speaker 1: or at the very least hundred thousand rs. But everyone
Speaker 1: except one guy, that is. And he was this Greek
Speaker 1: gentleman who was down on his luck. He he'd moved
Speaker 1: to the town for a woman and they'd just broken up,
Speaker 1: and I guess he just wasn't interested in playing and
Speaker 1: losing money, So so he didn't get to cash in.
Speaker 1: Oh man, what a bumber. So he's the only one
Speaker 1: who didn't participate. Yeah, I mean, things ended up kind
Speaker 1: of all right for him. Like he'd been trying to
Speaker 1: sell his barn there and before the lottery, no one
Speaker 1: had money to buy it. But once they did, suddenly
Speaker 1: everyone was clamboring to purchase his barn, so he ended
Speaker 1: up with a real estate deal. But today's show is
Speaker 1: all about the lottery. How does statisticians out fox the system?
Speaker 1: And why should you care if you find Herbert Hoover
Speaker 1: on your lotto ticket? So let's dive in. Hey, their
Speaker 1: podcast listeners, welcome to part time genius. I'm Will Pearson
Speaker 1: and as always I'm joined by my good friend Mangesh
Speaker 1: Ticketer and on the other side of the soundproof glass,
Speaker 1: hunched over the fattest stack of Georgia Lotto scratchers I
Speaker 1: think I've ever seen. I feel like he might have
Speaker 1: bought all of them, Mango. But that's our friend and
Speaker 1: producer Tristan McNeil. You know the other thing I've noticed,
Speaker 1: this guy loves scratching these things, Mango. Have you been
Speaker 1: watching him over here? Yeah, he actually is using this
Speaker 1: special scratch off tool. It's shaped like a little ice craper,
Speaker 1: but it goes on your key ring. I think he
Speaker 1: got it off, Etsy, but I think he has it
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 universally 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: Skulls 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: like 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, sortitians
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: work 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 great. Yeah, Actually, lotteries
Speaker 1: are so much more on when they include these weird
Speaker 1: gadgets or honestly, these like overly complicated systems for choosing
Speaker 1: their winners and just in doing your other digging, did
Speaker 1: you find any other early examples of 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 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 white Pigeon Ticket. I mean
Speaker 1: that's pretty cool. So do people still play this white
Speaker 1: pigeon ticket game today? They do, except now the game
Speaker 1: has been rebranded as Keno. They've I guess stripped the
Speaker 1: pigeons out of the game, which feels like a major
Speaker 1: loss to me. But Keino is still a huge money
Speaker 1: maker for Xino's. Even two thousand years ago, the game
Speaker 1: was this big financial windfall for China. It was supposedly
Speaker 1: invented by a warlord who's named Chung Lung. He'd been
Speaker 1: looking for a way to get citizens to help fund
Speaker 1: his army, and selling those white pigeon tickets proved a
Speaker 1: great way to do just that. Pretty soon the game
Speaker 1: was being used to fund not just the military, but
Speaker 1: all sorts of other public works projects, and in fact,
Speaker 1: one version of the game supposedly helped pay for the
Speaker 1: Great Wall of China. You know, that was one of
Speaker 1: the surprising things as we were doing our research for
Speaker 1: this week, was realizing how many of these huge projects
Speaker 1: were funded by lotteries. I was actually reading just recently
Speaker 1: about colonial America and that it was largely built using
Speaker 1: revenue from lotteries. Like apparently, lotteries had made their way
Speaker 1: to America's shores. I think it was back in the
Speaker 1: sixteenth century. And this was really around the same time
Speaker 1: that they were catching on in Europe. So I guess
Speaker 1: in places like Italy and France and England they all
Speaker 1: borrowed a page from China's playbook, because you know, they
Speaker 1: realized that lotteries were a smart way to raise money
Speaker 1: for these various civic projects. And so it's kind of
Speaker 1: crazy how early it was being used in America too.
Speaker 1: You look back around sixteen twelve, you had the Virginia
Speaker 1: Company of London actually held a lottery to support the
Speaker 1: struggling Jamestown Colony and and really used it to save
Speaker 1: the settlers there from starvation. But it was used in
Speaker 1: these other pittal moments to like, you know, seventeen seventy six,
Speaker 1: you had the Constitutional Congress holding a lottery to finance
Speaker 1: soldiers for the Revolutionary Or. 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 you know, after all,
Speaker 1: unfair taxation had been a big part of the war
Speaker 1: so you can see why this alternative way to raise
Speaker 1: money was so appealing to politicians. It was, you know,
Speaker 1: just 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 was
Speaker 1: to pay off some of his debts. It's pretty pretty fun.
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, spent a full five
Speaker 1: pc of their incomes on lotteries, five percent of their
Speaker 1: incomes on matters. 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: grief 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. It 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 a 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. Can have studies, I'm coming with,
Speaker 1: so many of them have almost as many studies as
Speaker 1: Tristan has scratch off tickets. Not quite. This one's a
Speaker 1: good 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. Alright, 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. Alright, Mago,
Speaker 1: So let's live vicariously for a minute through some of
Speaker 1: these Loto legends. So who do you want to talk
Speaker 1: about first? Okay, So first I'm gonna tell you about
Speaker 1: Moen Shivasa. He is this m I T Train statistician
Speaker 1: who actually found a flaw in a certain scratch off
Speaker 1: game from the Ontario Lottery and this effectively allowed him
Speaker 1: to predict winning cards about nine of the time. Oh wow,
Speaker 1: So what's his story? So Moen wasn't really interested in
Speaker 1: playing a lot of much less exploiting it. But one day,
Speaker 1: and this was back in two thousand three, he found
Speaker 1: some old scratch offs on his desks that have been
Speaker 1: part of this gag gift I guess someone give him,
Speaker 1: and on a whim, he scratched off one and one
Speaker 1: three dollars. So he's walking to cash in his ticket
Speaker 1: as lunch break, and as he's thinking about it, he
Speaker 1: started thinking about how scratch offs must be made right,
Speaker 1: and it dawned on him that the tickets are obviously
Speaker 1: mass produced, which means that a computer program must be
Speaker 1: involved in laying out the numbers on each ticket. Yeah,
Speaker 1: I get that, But it's all random, isn't it. Like
Speaker 1: that's probably another reason ticket makers use a computer, because
Speaker 1: there's no way a human could actually design that many
Speaker 1: tickets and still keep the numbering completely random, right, Sure,
Speaker 1: but Moon realized that the computers can't be generating truly
Speaker 1: random numbers either, Like if they were, that mean the
Speaker 1: lottery company had no control over the actual number of
Speaker 1: winning tickets produced. And if that were the case, it
Speaker 1: would mean that some ticket packets would have very few
Speaker 1: winners or maybe even none at all. And obviously it
Speaker 1: would be tough to get retailers and also players to
Speaker 1: keep buying those tickets if so many of those cards
Speaker 1: were duds. Okay, that that that makes sense. So if
Speaker 1: the tickets like they kind of have to have the
Speaker 1: illusion of randomness while actually being incredibly ordered beneath the surface,
Speaker 1: is that what you're saying exactly? And once Moman figured
Speaker 1: this out, he decided to try and crack the algorithm
Speaker 1: that generated all those numbers, you know, just for fun,
Speaker 1: because he was from M I. T In a statistician,
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 dollars. Okay, all right, I mean, I know
Speaker 1: it all sounds complicated, But what I find so fascinating
Speaker 1: about this is he's just saying momen basically found a
Speaker 1: way to determine if a ticket was a winner without
Speaker 1: having to scratch anything off. And and you're saying he
Speaker 1: got this trick to work like nine of the time,
Speaker 1: that must have made a fortune. So that's the weirdest part.
Speaker 1: Moon really did this for the love of math and
Speaker 1: not money. In fact, once he was sure his technique worked,
Speaker 1: he actually contacted the Ontario Lottery Gaming Corporation and told
Speaker 1: him about the flaw he'd found and It's funny because
Speaker 1: he told NPR that he was playing telephone tag with lottery,
Speaker 1: and when they finally got to talk to one another,
Speaker 1: they kind of didn't believe him. So he sent them
Speaker 1: twenty unscratched cards and separated them into what he thought
Speaker 1: would be winning cards and duds. And when they scratched
Speaker 1: them off and realized he predicted correctly, that's when they
Speaker 1: called him back. Oh man, I bet he felt pretty awesome.
Speaker 1: That's pretty wild. Yeah, I mean, he later discovered the
Speaker 1: problem wasn't exclusive 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 them out with accuracy. I mean, that's still
Speaker 1: pretty impressive. But I mean, you know, it's as nice
Speaker 1: as it was for Owen to come clean about his discovery.
Speaker 1: I feel like that's certainly not how most attempts to
Speaker 1: game the lottery turnout. And I was just looking at
Speaker 1: some other cases, you know, if you take the case
Speaker 1: of Jerry and Marge Selby, for instance, And this comes
Speaker 1: from this great story by Jason Fagoni and and we
Speaker 1: actually had Jason on the program earlier. This year to
Speaker 1: talk about his book. It was called The Woman Who
Speaker 1: Smashed Codes. I mean, that was honestly one of my
Speaker 1: favorite episodes. Is so fascinating, and my mom just bought
Speaker 1: that book because she loved Jason so much. But to
Speaker 1: tell me about the Selby's. All right, So they're from
Speaker 1: Michigan and they were basically among the first players to
Speaker 1: find a flaw in a state lottery game. The game
Speaker 1: was called Windfall, and this was back in two thousand three,
Speaker 1: and it came down to this unique quirk and windfalls rules, namely,
Speaker 1: whenever the jackpot would rise to roughly two million dollars
Speaker 1: or so without anybody winning it, the payoffs for smaller
Speaker 1: prizes increased dramatically. So basically, if a player waited until
Speaker 1: this so called rolldown period, which typically lasted for a
Speaker 1: few days every three months or so, they would stay
Speaker 1: and to win more than they lost. And of course
Speaker 1: this is on average, and so if they were to
Speaker 1: buy an especially high number of tickets during that rolldown,
Speaker 1: say like you know, a hundred thousand dollars worth, then
Speaker 1: they would be practically guaranteed to turn a ten to
Speaker 1: fifteen percent profit. Okay, so the more tickets of player
Speaker 1: buys during the special period, the more money they're kind
Speaker 1: of a short to win. So I'm curious how many
Speaker 1: tickets did Jerry and March go in on. It was unbelievable,
Speaker 1: the number of tickets. I mean, they basically treated Windfall
Speaker 1: like their retirement plan, and they played for the better
Speaker 1: part of a decade. In fact, Michigan retired the game
Speaker 1: only from Massachusetts to roll out their own versions soon after,
Speaker 1: and so the Selby's actually took their ticket buying operation
Speaker 1: on the road. What they would do is they just
Speaker 1: pile into their truck, they drive the twelve hours or
Speaker 1: so to Massachusetts, and then they'd set up shop in
Speaker 1: two separate convenience stores, printing ream after ream of tickets
Speaker 1: for honestly, for hours at a time. So I've been
Speaker 1: stuck in bodegos behind people playing the lotto, and it's
Speaker 1: so frustrating, Like you can be there for like ten
Speaker 1: minutes or fifteen minutes. You can take forever when you're
Speaker 1: in a rush. But how many tickets are we actually
Speaker 1: talking about here? You are not going to believe this.
Speaker 1: So at the height of their scheme, the couple was
Speaker 1: spending over six hundred thousand dollars on a single play
Speaker 1: of Windfall. Keep this in mind, we're talking two dollars
Speaker 1: of pop here, so that means they had more than
Speaker 1: three hundred thousand tickets that week. That's insane. So I'm
Speaker 1: always nervous when I see people gambling and gambling with
Speaker 1: such ridiculous amounts of money, like, I'm so afraid they're
Speaker 1: gonna lose it. And you know, my favorite thing to
Speaker 1: do in Las Vegas is to go up to an
Speaker 1: a t M and act like I've one when it
Speaker 1: spits out cash, because I do not want to get
Speaker 1: ripped off five machines. But obviously these people are made
Speaker 1: of much stronger stuff than I am. So how much
Speaker 1: did they end up making? Well, the Selbies actually didn't
Speaker 1: play alone, at least not the whole time. There was
Speaker 1: one point where they started this company called GS Investment Strategies.
Speaker 1: I love that that's the name of their company for
Speaker 1: some reason, and Sting Firm, I know. So basically it
Speaker 1: was a betting group that consisted of the Selby's and
Speaker 1: their extended family and friends. And just looking at the
Speaker 1: you know, the list of people in this it's pretty funny.
Speaker 1: It included a state trooper, a parole officer, three lawyers,
Speaker 1: among all these others that we're playing, and at their
Speaker 1: final tally, they managed to get almost eight million dollars.
Speaker 1: It was just shy of eight million dollars before taxes,
Speaker 1: and of course all that was divvied up among the
Speaker 1: company's twenty five players. So really not a bad hale
Speaker 1: for nine years of printing out these slips of paper,
Speaker 1: But it actually was a little bit short of what
Speaker 1: this small group of M I T students managed to win.
Speaker 1: And this was off the very same game. This was
Speaker 1: between two thousand and four and two thousand and ten.
Speaker 1: The students made actually just a little bit over eight
Speaker 1: million dollars in profit. So I'm still kind of blown
Speaker 1: away that this happened. I mean, like, why didn't the
Speaker 1: lottery commissions of these states wise up to what was happening.
Speaker 1: You've got these multiple groups of people pulling off the
Speaker 1: same scheme for like a decade and obviously buying massive
Speaker 1: amounts of tickets. Well, I mean, this may be the
Speaker 1: weirdest 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 Selbys 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 that 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, scratchaws,
Speaker 1: video lottery games, Kenno like, you wind up with a
Speaker 1: yearly total of eighty billion dollars. That stunning, And and
Speaker 1: just to put that in perspective, movie ticket sales in
Speaker 1: the US add up to only about eleven billion dollars annually.
Speaker 1: In fact, that eight billion is more than Americans spend
Speaker 1: every year, not only on movie tickets, but also on
Speaker 1: sports tickets, books, video games, music sales, all of that combined.
Speaker 1: That's crazy, all right. So obviously we love to gamble,
Speaker 1: and that must mean that we're getting something out of
Speaker 1: the deal, right though, So how much of that eight
Speaker 1: billion ends up in the player's pockets. It's way more
Speaker 1: than you think. Like, I was actually surprised to hear this,
Speaker 1: but over fifty billion of that to will goes to
Speaker 1: players in the former prizes. Oh yeah, I wouldn't have
Speaker 1: guessed that. Yeah, And then another eight billion is used
Speaker 1: to cover the cost of the lotteries themselves, So like
Speaker 1: this is the boring stuff like printing, advertising, design, employee salaries,
Speaker 1: vendor fees. But the remaining twenty two billion, which you
Speaker 1: know is still a ton of money, is funneled into
Speaker 1: public programs, and that includes everything from education and land
Speaker 1: conservation to senior assistance and even pension funds well, and
Speaker 1: obviously different states will claim different amounts of that profit
Speaker 1: depending on their individual sales numbers. But but it's up
Speaker 1: to each state to decide what to do with their profits. Yeah,
Speaker 1: that's right. So there are currently lotteries and forty seven
Speaker 1: different U S jurisdictions, which includes forty four states plus
Speaker 1: m d c Is on their Puerto Rico the virgin Islands,
Speaker 1: and they each get to use their money for whatever
Speaker 1: they want. So education budgets are probably the most popular choice.
Speaker 1: Like the Virginia lottery for example, it actually puts all
Speaker 1: of its profits into a cage to twelve education fund.
Speaker 1: And last year our lottery right here in Georgia actually
Speaker 1: gave out a billion dollars in profits to education programs
Speaker 1: compared to the two point seven billion to gave out
Speaker 1: in prizes to players. Wow. I I mean, you know,
Speaker 1: there's no denying that state run lotteries can deliver pretty
Speaker 1: big benefits to their citizens, at at least generally speaking.
Speaker 1: And again, it's easy to see why most politicians would
Speaker 1: want to keep that easy money flowing through their states. Sure,
Speaker 1: But on a different note, one of the things that's
Speaker 1: really fun to hear about is the individual lottery winners
Speaker 1: who actually share their wealth. And I was reading about
Speaker 1: this guy named John Coody who split a three million
Speaker 1: dollar payout with six other I T specialists and this
Speaker 1: was back in two thousand eleven. I mean, that sounds nice,
Speaker 1: but you're saying seven I T guys won the jack.
Speaker 1: But I feel like that has to be some kind
Speaker 1: of fits, like with the m I T students, right, Yeah,
Speaker 1: I mean that's possible, but considering what Coody did with
Speaker 1: his money, like I wouldn't hold it against him. He
Speaker 1: and his wife actually decided to use a good chunk
Speaker 1: of their winnings to build this massive water park for
Speaker 1: the community. And this was in Green Island, New York.
Speaker 1: They called it Spray Park, and it's dedicated to Cootie's parents,
Speaker 1: who apparently used to take their kids into this, uh,
Speaker 1: I guess outdated water park in the community, and that's
Speaker 1: the one he helped replace. That's pretty sweet and I
Speaker 1: do love these kinds of stories. I was actually reading
Speaker 1: about another lot of winning couple. They were named Allen
Speaker 1: and Violet Large, and they want about eleven million dollars
Speaker 1: back in two thousand and ten, and they ended up
Speaker 1: giving away nine percent of it within the first year.
Speaker 1: Is that not crazy? Yeah, I mean is a lot
Speaker 1: of percent. So where did the money go? Well, according
Speaker 1: to an article in the Toronto Star, the couple donated
Speaker 1: nearly all of their winnings to the Red Cross, to
Speaker 1: their local churches, fire departments, and even the hospitals where
Speaker 1: Violet had undergone cancer treatment. And of course, while while
Speaker 1: parting with that much lout is painful for you know,
Speaker 1: so many of us to even think about, it was
Speaker 1: apparently pretty easy for the largest There was this interview
Speaker 1: I was looking at where Violet told reporters what you've
Speaker 1: never had, you never miss I mean, it really is
Speaker 1: amazing to see people react and you found wealth so
Speaker 1: humbly like that. Um, speaking of humility, did did you
Speaker 1: hear about this homeless guy in Illinois who won fifty
Speaker 1: on a scratcher? Apparently he lived in a tent in
Speaker 1: homeless community for like thirty five years at this point,
Speaker 1: and that's when he won the money. But rather than
Speaker 1: leave his friends for a comfy home of his own,
Speaker 1: he decided to stay right where he was. Wait, so
Speaker 1: he just stayed in his tent. Yeah. He told reporters
Speaker 1: that he planned to use the money for an overdue
Speaker 1: trip to the dentist, and he also wanted to use
Speaker 1: some of the money to visit his son. But then
Speaker 1: he gave a hundred dollars to every homeless person he knew,
Speaker 1: and I'm guessing he knew a lot of them. Wow.
Speaker 1: All right, so this is kind of a tangent, but
Speaker 1: you made me think of it when you brought up
Speaker 1: scratchers again. And we've been talking about the bright side
Speaker 1: of playing the lottery throughout this segment. But there's actually
Speaker 1: a way to get enjoyment from lotteries without playing them,
Speaker 1: and the best part is it won't cost you a dime.
Speaker 1: So what was the catch? Actually, there's no catch. All
Speaker 1: you have to do is become a litologist. And if
Speaker 1: by some chance you don't already know what a latologist is,
Speaker 1: I can tell you that it's a person who collects
Speaker 1: lottery tickets. So how does that cost no money? Well,
Speaker 1: because it's a collecting hobby, it's not a gambling hobby.
Speaker 1: So most latologists don't collect fresh or unused scratch cards.
Speaker 1: They're actually collecting losing tickets or maybe even winners tickets
Speaker 1: that have already been redeemed by the customers. So how
Speaker 1: many latologists are there. I feel like you keep saying they,
Speaker 1: but to me it feels like one person in his
Speaker 1: parent's basement. Well, according to the Global Lottery Collectors Society.
Speaker 1: You may not have been familiar with the Global Lottery
Speaker 1: Collectors Society, there's a group of a few hundred passionate
Speaker 1: collectors who trade and catalog all these various scratch off
Speaker 1: games released in the US. And this one guy in particular,
Speaker 1: his name is Arthur Rain, and he has one of
Speaker 1: the biggest collections in the world. He's got over fifty
Speaker 1: seven thousand different scratchers in his collection, so that's pretty crazy.
Speaker 1: But I did notice you said one of the biggest,
Speaker 1: So what's that mean exact Well, apparently they are one
Speaker 1: or two other people in the society with bigger collections,
Speaker 1: which I know is pretty hard to believe. So I'm
Speaker 1: curious now, like, is there a holy grail for lata
Speaker 1: just like, is there one special scratch off that everyone
Speaker 1: would spend money on? Yeah, there definitely is. According to Rain,
Speaker 1: the most sought after scratcher is this nineteen seventies six
Speaker 1: card and it was from Illinois and it has Herbert
Speaker 1: Hoover's picture on it. Apparently it was part of a
Speaker 1: promotion where each ticket featured a different president, and once
Speaker 1: the game was over, the lottery picked one president, and
Speaker 1: anybody who submitted a losing ticket with that president's face
Speaker 1: on it would be entered to win a consolation prize. Well,
Speaker 1: Herbert Hoover ended up as the lucky President, and because
Speaker 1: so many players mailed him in, there aren't many Hoover's
Speaker 1: left in circulation. In fact, if you're lucky to find
Speaker 1: one of the three or four copies known to exist
Speaker 1: and you want to add it to your collection, it'll
Speaker 1: set you back about five hundred bucks to do so.
Speaker 1: I love that it's only worth five minute dollars, but
Speaker 1: I mean it is a four year old losing lottery tickets.
Speaker 1: But I am curious, though, if the Hoover card is
Speaker 1: this exception to the rule, how are lutologious 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, Yeah, of course that's true.
Speaker 1: I mean, so so many collectors actually have deals with
Speaker 1: a whole network of stores, so they'll you know, make
Speaker 1: their rounds once a week or so, and they'll collect
Speaker 1: all the used tickets that A stores customers just left behind.
Speaker 1: It's such a specific hobby, it sounds 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 to
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 imagine 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 Atlas 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 him 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 to 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'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: it was actually way too much for them to resist.
Speaker 1: So whenever they were given a choice, the pigeons chose
Speaker 1: to gamble. And this was more than eighty percent of a
Speaker 1: a time, even though the winnings were way less when
Speaker 1: you average them out, that's pretty good, all right. Well,
Speaker 1: in Europe and particularly Italy, there's a tradition where the
Speaker 1: lottery is drawn by blindfolded kids, which seems like kind
Speaker 1: of a weird tradition. And the idea here is that
Speaker 1: children are innocent, so this is a game you can
Speaker 1: supposedly trust. Although I feel like there have been so
Speaker 1: many studies showing that children are not at all honest
Speaker 1: on this kind of thing. But anyway, but this was
Speaker 1: before things were automated, back in the two thousands, and
Speaker 1: as it turns out, not surprisingly, the kids were part
Speaker 1: of a massive scam. They'd actually been trained to feel
Speaker 1: for these roughed up lottery balls, and when the journalists
Speaker 1: who broke the scandal started looking into this, they found
Speaker 1: that the kids were being paid in toys. So I
Speaker 1: love the idea that, like, you can actually fix a
Speaker 1: multimillion lottery with I don't know, like some e bears
Speaker 1: and director sets, that's all it takes. Did you realize
Speaker 1: that it's way harder to win McDonald's monopoly game than
Speaker 1: it is to win an actual lottery And apparently the
Speaker 1: odds of winning Powerball are one in a hundred seventy
Speaker 1: five million, So already you're more likely to die on
Speaker 1: the way to playing a lot of than you are
Speaker 1: to winning it. But that one in a hundred seventy
Speaker 1: five million is great odds compared to the odds of
Speaker 1: finding a boardwalk piece, which is one in six hundred million.
Speaker 1: And when you factor in also finding a park place,
Speaker 1: your odds of winning go down to one in three billion.
Speaker 1: Isn't that the saying, wow, that's pretty great? All right? Well,
Speaker 1: in nineteen twelve, Popular Mechanics reported that a hospital in
Speaker 1: Paris had held a lottery, but they actually were giving
Speaker 1: out something a little different than money. They were giving
Speaker 1: out babies, like if you won, you won a baby,
Speaker 1: which is I don't know. It feels like kind of
Speaker 1: a dubious prize for a lot of people, but it's
Speaker 1: the only time we know of that this has happened.
Speaker 1: But the hospital they not only consulted authorities, but they
Speaker 1: actually made sure to research whether a winning pupple was
Speaker 1: actually good to be foster parents before they handed them
Speaker 1: a baby. I guess that sounds smart. So this feels
Speaker 1: like such luck. But when Zimbabwe ran a lottery in
Speaker 1: two thousand, the dictator and president of Zimbabwe at the time,
Speaker 1: Robert Mugabe, just happened to win it, like he won
Speaker 1: the grand prize of a hundred thousand dollars in the
Speaker 1: state run lottery. And it's kind of amazing how that happened. Yeah,
Speaker 1: just 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, yeah, yeah,
Speaker 1: like they you know, they made those trash cans that
Speaker 1: would blink and flash whenever you put your litter in them,
Speaker 1: and I remember one of the others they had those
Speaker 1: musical steps that made sounds when you use them instead
Speaker 1: of the elevator, And it was all these little bits
Speaker 1: of joy that we're there to encourage you to do
Speaker 1: good things, either for you or for society. One of
Speaker 1: the ideas that actually got implemented in Sweden was when
Speaker 1: they set up the lottery at traffic lights. So you
Speaker 1: know when you run a red light, they're all these
Speaker 1: places where cameras will catch you and then send you
Speaker 1: a ticket in the mail. Well, well they actually turn
Speaker 1: that into a lottery for good drivers. So whenever you
Speaker 1: slowed down and stopped, you were automatically put into a lottery,
Speaker 1: and then the winners were paid out with money that
Speaker 1: came from speeding fines. Isn't that a great idea? I
Speaker 1: love it, you know, for all my hubers going into this,
Speaker 1: I I do think you get to walk away with
Speaker 1: the prize this week. Well, thank you very much and uh,
Speaker 1: I'm sure we forgot some great facts about lotteries over
Speaker 1: the years and we would love to hear those from.
Speaker 1: You can always email us part Time Genius and How
Speaker 1: Stuff Works dot com. You can also call us on
Speaker 1: fact hot line that's eight six six pt Genius, or
Speaker 1: as always, you can hit us up on Facebook or Twitter.
Speaker 1: But thanks so much for listening. Thanks again for listening.
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