Some people repeatedly win the Wisconsin Lottery. Do they play fair?(wisconsinwatch.org)
wisconsinwatch.org
Some people repeatedly win the Wisconsin Lottery. Do they play fair?
https://www.wisconsinwatch.org/2018/03/some-people-repeatedly-win-the-wisconsin-lottery-do-they-play-fair/
53 comments
1. I’m a straight and narrow physicist, who, by chance, made the acquaintance of, and hung out with convenience store owners and assorted low lives. (There was a point in my existence where I considered this aspect of lower middle class culture exotic or titillating.) I would like to disabuse all the star programmers and scientists who read Hacker News of any notion that the economic subgroup cited does not have extremely intelligent members in surplus, easily able to outwit state authorities in the crimes (and they are crimes— statistics here are reliable) cited. 2. A key point of the article is that the state’s revenue is not damaged by an unfair distribution of winnings. Indeed, were it to become well known that the lottery was unfair, the revenues do stand to be damaged. So there is zero incentive for the state to match any sort of sophistication on the part of cheaters with the necessary investigative prowess to catch them. 3. Most of the instances cited are clear examples of convenience store employees being able to detect the winning tickets in an undetectable way. This is indeed the case, and is well known in the industry. The article, I conjecture, greatly underestimates the sophistication of the detection methods. 4. I would guess that a majority of multiple winners NOT connected with scratch-off pre-detection are associated with various levels of money laundering. 5. There are times when it is more propitious to play these moron games. But I would defy you to find a situation where the odds are actually in your favor, i.e. where your expectation value of winnings is not negative.
The bit about second chance drawings... Are there rules about you having to be the person who bought the ticket? I see discarded losing (I'm assuming) tickets outside convenience stores all the time (maybe just in states without those drawings.) It seems like it would be relatively easy to get $5 worth of losing lottery tickets without spending $5. Especially while working at a convenience store.
Wasn't there just an article on here about a retired couple exploiting a game flaw with a purchasing pool? The lotto didn't care, it doesn't affect them. I think it's more likely people found a flaw in the game than cheating / fraud.
Anecdotal, but in my experience buying scratch offs in Wisconsin: The winning tickets seemed to be "front loaded" into a new game with diminishing odds as the game ages.
You don't have to trick the state into thinking that the ticket hasn't been tampered with, just the next person who buys a scratcher.
In addition to the obvious scams and microscratching, I’d be surprised if this wasn’t an avenue for organized crime to launder money. The store(s) get the sales and a percentage, and the launderer gets clean money out of the other end.
You're right about this. There is a market for buying winning lottery tickets for more than their face value. Wonder why...
That's why so many people are against any sort of gambling. It's essentially a laundering vehicle for organized crime (even state sponsored ones).
Why do you think James Bond was always around a casino? Winnings can cleanly pay for hitjobs.
Why do you think James Bond was always around a casino? Winnings can cleanly pay for hitjobs.
Fixed Odds Betting machines are used for this in the UK.
But in that case the money launderer doesn't even need to win, they just need a receipt showing they gambled.
https://www.theguardian.com/uk-news/2013/nov/08/gambling-mac...
This is a long lasting problem that's led to fines for the industry: https://www.ft.com/content/b90289cc-1616-11e8-9376-4a6390add...
But in that case the money launderer doesn't even need to win, they just need a receipt showing they gambled.
https://www.theguardian.com/uk-news/2013/nov/08/gambling-mac...
This is a long lasting problem that's led to fines for the industry: https://www.ft.com/content/b90289cc-1616-11e8-9376-4a6390add...
Whitey Bulger, the famous South Boston mom boss, did exactly this:
https://www.washingtonpost.com/archive/politics/1991/08/07/h....
https://www.washingtonpost.com/archive/politics/1991/08/07/h....
Yep! That was discussed a bit on HN a few weeks ago and this I think juts add more investigative info to it.
https://news.ycombinator.com/item?id=16494280
https://news.ycombinator.com/item?id=16494280
EGreg(5)
The article suggests "micro-scratching" as a cheating technique. Wouldn't just completely scratching off and re-applying the scratch material be the easiest way to cheat?
Reapplying and matching the original tickets covering well enough is probably pretty hard to do and would probably require a larger investment into the materials and equipment.
Ones I see now have patterns in the material. But I guess if you scratched it off and replaced it without most customers won't notice.
This is why it shouldn't be possible to anonymously claim lottery prizes.
This is a pretty obvious path for money laundering and other forms of corruption and fraud.
This is a pretty obvious path for money laundering and other forms of corruption and fraud.
Are most of these multiple winnners anonymous? I see quite a few names mentioned in the article. Besides, the anonymous thing only matters to giant wins, like the recent case of nearly half a billion dollars. I’d guess the scrutiny there is orders of magnitude greater than a 5 digit winner.
Winners of <$600 are anonymous. Winnings over that require a name for tax purposes.
I believe those identities are either published or available via the state equivalent of FOIA.
I believe those identities are either published or available via the state equivalent of FOIA.
In the US do you pay tax on lottery winnings?
yes. Any gambling win > $600 or a win over some multiple of your initial wager is taxed by the feds (and many states have additional taxes). Professional gamblers can write some portion of their losses off against that tax (I'm not sure of the details, you'd generally need to hire an accountant to handle something like that).
Source: I used to work in the gambling industry and have had a win large enough to be required to pay significant (>$3k) taxes on it.
Source: I used to work in the gambling industry and have had a win large enough to be required to pay significant (>$3k) taxes on it.
Yes, and it is considered a different class of income than normal - so different tax rates usually.
The only difference of "class" that I can think of might be since it's not from employment then it wouldn't be subjected to FICA. Otherwise, from my understanding it is taxed as regular income tax rates. Is this what you are alluding to?
https://www.efile.com/taxable-gambling-winnings-income-taxes... suggests that winnings are taxed at a flat 25% up to $5000 and beyond that it's treated as income.
Awesome. Thanks for that info and link!
This is another reason to keep and all losing tickets... to offset your winnings and applicable taxes.
This is another reason to keep and all losing tickets... to offset your winnings and applicable taxes.
You're obliged to pay taxes on any income. Up to $600, it's an honor system.
One could argue that scratch-off games are inherently unfair, because the game provider already knows whether or not a ticket is a winner, and is hiding that information from the purchaser. The method of hiding could be imperfect. The odds calculations could have a flaw.
If you have any ambitions for cracking a lottery game, go for the small games in states with unsophisticated gaming regulators.
In any case, playing scratch-offs successfully requires research into the rules, which players hardly ever do. For instance, if the top prize for a scratch-off game has already been won, you should never play that game again. If it hasn't been won, you aggressively sell those tickets to other people, let them scratch, and then collect their non-winners for the second-chance drawing. You can't rely on the odds on the back of the ticket, you have to continually recheck the prizes won and recalculate the odds, and only play when expected value rises above ticket cost.
And that ignores completely the possibility that convenience store clerks are cherry-picking all the winners off the spool before you get the chance to play. It's just not worth it for anyone, unless they cheat in some way.
If you have any ambitions for cracking a lottery game, go for the small games in states with unsophisticated gaming regulators.
In any case, playing scratch-offs successfully requires research into the rules, which players hardly ever do. For instance, if the top prize for a scratch-off game has already been won, you should never play that game again. If it hasn't been won, you aggressively sell those tickets to other people, let them scratch, and then collect their non-winners for the second-chance drawing. You can't rely on the odds on the back of the ticket, you have to continually recheck the prizes won and recalculate the odds, and only play when expected value rises above ticket cost.
And that ignores completely the possibility that convenience store clerks are cherry-picking all the winners off the spool before you get the chance to play. It's just not worth it for anyone, unless they cheat in some way.
>One could argue that scratch-off games are inherently unfair
There's nothing inherent about scratch-off games that forces sellers to be in a privileged position about whether tickets they are selling are winners. If the buyer supplies a source of entropy that they commit to, the ticket has a it's own entropy.
There's nothing inherent about scratch-off games that forces sellers to be in a privileged position about whether tickets they are selling are winners. If the buyer supplies a source of entropy that they commit to, the ticket has a it's own entropy.
The game provider knows the scratch-off ticket is a winner or a loser the instant that it is printed. It now has to come up with some way to prevent that knowledge from reaching all the retailers in their distribution network and all the players.
Every such scheme is potentially flawed and subject to attack. I reference the McDonald's "Monopoly Game", that was subject to insider cheating for years before it was discovered. Scratch-off tickets are subject to similar attacks, as well as simple mathematical strategy attacks that transfer gambling advantages from naive players to well-informed players, skewing the published odds.
Every such scheme is potentially flawed and subject to attack. I reference the McDonald's "Monopoly Game", that was subject to insider cheating for years before it was discovered. Scratch-off tickets are subject to similar attacks, as well as simple mathematical strategy attacks that transfer gambling advantages from naive players to well-informed players, skewing the published odds.
>The game provider knows the scratch-off ticket is a winner or a loser the instant that it is printed.
Yes, this is the way it works today but it isn't required by design. My reply illustrates how you can have a "scratch-off" game where the game provider doesn't know if the ticket is a winner when the ticket is printed.
Yes, this is the way it works today but it isn't required by design. My reply illustrates how you can have a "scratch-off" game where the game provider doesn't know if the ticket is a winner when the ticket is printed.