Beating Government Lotteries

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Where There’s Gambling, There’s Cheating.

My friend Adam recently sent me the following article detailing how the esteemed philosopher Voltaire and some rich friends beat a French government lottery in the 18th century. Turns out the Deputy Minister of Finance, Michel Robert Le Pelletier Des Forts, was not as smart as French mathematician Charles Marie de la Condamine. Like every government since the organization of the nation-state, Le Pelletier-Desforts was pressured by economic conditions to come up with new ways to fleece the populace. His solution was the creation of a lottery based on a the price of bonds. In this case, a face value of 1,000 livres would equal a ticket of one livre. The selected ticket would win the holder a face-value bond and a jackpot of 500,000 livres.

Condamine realized that since every ticket had an equal chance of winning, you’d have to be a sucker to buy a few high value bonds, (what the government wanted), instead of many low value bonds at “pennies on the dollar”. Voltaire’s part in the scheme was to arrange with a compliant notary (government official in charge of selling the lottery tickets), to purchase stacks of bonds without arousing suspicion. If the government knew a few rich people were gaming the scheme, they would shut it down.

Condamine’s syndicate managed to win a few lotteries before the French government cottoned on to them. In this case the lottery was too simplistic to avoid the inevitable smart ass in the crowd figuring it out. What are the odds anybody can do it today?

Zilch.

Pooling Risk and Reward

That’s not to say a wealthy syndicate couldn’t buy a lottery win if they wanted to. It is, after all, simple mathematics. In a 6/49 lottery, there are just over 13.9 million possible tickets. In Canada we have just such a lottery, cleverly called “6/49”. Figure out the logistics of buying that many tickets before the draw, (every Wednesday and Saturday night), and you could win twice a week.

The problems are numerous. At $3 per ticket the total cost would be nearly $42 million per draw. Of course, the jackpot would have to exceed that total and it rarely does. Also, some little old lady in Regina could buy just one ticket and halve your jackpot. OLG does offer an online method for buying tickets, but I’m going to assume they will not let you set a limit of $42 million!

Canada also has Lotto Max where jackpots can and do reach $60 million. However, tickets are $5 each and the draw is a 7/49 scheme. Each ticket consists of three selections but the math gets complicated. Odds against winning are 28.6 million to one. You don’t need to spend $143 million to get every combination, (the computer selects two random ones for every selection) but the grand prize is capped unlike US Powerball lotteries. It is no accident that governments have pushed the per ticket cost out past the point that a syndicate could corner the market!

Now, if one was using euros, (presently about $1.45 CDN) or UK pounds ($1.64) or US dollars ($1.27) one would immediately realize a discount 30-60%. You could buy 13.9 million tickets for perhaps $24 million. Furthermore, although every one of the number combinations has the same mathematical chance of coming up, I am not aware of any time when six or even five numbers have come up in a row. If you could cook up an algorithm to take these choices out, you could save your syndicate another, what? 40%? (I’m no mathematician!).

Many offices have pools where individuals will chip in an equal amount and share any winnings…and losings. Online you can find global pools that play any national lottery you want. Lottery Syndicate World even aggregates multiple syndicate sites. Most impressively to me, this site also points out that there is no such thing as a scheme or technique for winning. Playing a lottery can only be a passive activity. Pop in a few bucks per week and forget about it. Odds are you’ll never see it again. But at least, in a syndicate, you can share the misery!

 

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