In the US, lotteries are a big business, raising huge revenues for state governments. But recently, here has been a controversy over the Texas state lottery.
There are various versions of the lottery but the one that gives out the biggest prize is where you pick six numbers from 1 through 54, with no number being repeated. If the drawing throws up that particular combination, then you win. The odds of winning are easy to calculate. The number of permutations of six numbers with none repeated is 18,595,558,800 (=54x53x52x51x50x49). Since the order of the numbers does not matter, there are 720 combinations that are equivalent (=6x5x4x3x2x1). Hence the number of possible results is the first number divided by the second, which gives 25,827,165. Since it costs $1 to pick a set of six, in theory if you buy one ticket for every possible combination, thus spending $25,827,165, you are guaranteed to win.
The catch is that the prize is usually less than that amount. A second problem is that if more than one person picks the same combination, then the prize gets split between the winners. A third problem is the sheer logistics of buying so many tickets, because the tickets are printed out by machines at various locations like convenience stores.
The first problem can be overcome because if no one wins a prize at a drawing, the prize money is rolled over to the next drawing, thus growing in size. And in April 2023, that is what happened. On Wednesday, April 19, the prize had risen to $73 million because there had been no winner for the previous 91 drawings. By the time of the next drawing on Saturday, the prize had risen to $95 million, which after tax would still amount to $58 million. It is often the case that as the prize gets larger, even more people buy tickets, lured by the possibility of a huge win. But this increase in just three days was much larger than usual, leading to suspicions that someone was buying up all the number combinations.
And indeed that turned out to be the case, carried out by one group.
The scheme sounds so much like a heist movie that it could be a parody, down to the man allegedly behind it being known as “the Joker.” Addressing his assembled crack team of accomplices, he would say, of course: “And the best part? … It’s all perfectly legal.”
Technically, it was. Nothing in the Texas state lottery code says a person can’t buy every number combination, although since the win — which resulted in a lump-sum profit of $57.8 million before taxes — much is now under review.
…The $95 million jackpot scheme was hatched by one-time London-based banker Bernard Marantelli, according to the Wall Street Journal.
The idea was bankrolled by Zeljko Ranogajec, a shadowy figure who operates out of Tasmania, Australia, and — among many aliases — is known to some as “the Joker,” per the newspaper.
Luckily for them, they were the only winner, thus not having to share the prize and overcoming the second problem mentioned above, though they would still have made a profit if there had been just one other winner.. So how did they overcome the third problem of logistics?
The team recruited an online ticket seller, Lottery.com, to work with it, according to the WSJ. The TLC [Texas Lottery Commission] even delivered “dozens” of terminals to print the tickets at warehouses in Texas, where the team spent the three days between the unclaimed April 19 draw and the next buying 99.3% of all the number combos. (Popular choices like 1, 2, 3, 4, 5, 6 were discounted as it would mean splitting the prize with too many others.)
A bunch of associates and some of their kids worked around the clock to churn out 100 tickets or more per second, according to reports.
In Texas, lottery claimants are allowed to stay anonymous, and the winners of the $95 million payout were initially only known via a locally registered company called Rook TX.
A New Jersey lawyer who represents the limited partnership told The Post: “All applicable laws, rules and regulations were followed.”
At 100 tickets per second, it would still have taken three days to print all the tickets, so they must have had everything already in place in advance to carry out this operation.
Texas state officials are upset because the winners are not state residents and thus will not be spending their money in the state but will be taking it elsewhere. They are looking into whether they can prevent such things in the future such as by restricting the sale of the machines that print the tickets.
“Texas state officials are upset”
They levy a tax on people with poor math skills. Of course they’re upset that people with better math skills loopholed it and won.
If they had any sense they’d just use the opportunity to boost the profile of their gambling operation so now people hear about it… oh, wait.
I think it’s more appropriate to think of lotteries as a tax on hope. Most people are perfectly well aware that it’s vanishingly unlikely that they’ll win -- however, we live in societies where “vanishingly unlikely” is still the best hope a lot of people have ready access to. And people need hope.
Lottery win odds do actually look pretty good on an up-front investment vs risk-adjusted return basis as compared to bullshit like “work hard and you’ll get ahead” for a lot of people. Arguably it’s more rational to invest a buck a week for the chance of a big win than to invest 4 years of your life and 6-figures worth of debt that you’ll never repay for the chance of a slightly better bullshit job.
I agree that the lottery is a scam that preys on both poor math skills and hope.
I strongly disagree that a 4-year degree will cost 6 figures unless the degree seeker is stupid and feckless. I just looked up my state’s tuition: for in-state students, this nationally-ranked state university costs $10k and change for the 2024 -- 2025 year. That’s about $50k for 4 years, which isn’t nothing, but it’s not 6 figures, either. Both my kids went to community college while in high school using a state program with half-price CC tuition for high school students, then transferred to the state university to finish, so both graduated with STEM degrees for $18k and $23k respectively. No loans needed. Both are working in jobs that pay their bills.
In contrast, a coworker happily signed the loan paperwork 20 years ago to send his daughter to her DREAM private college. She graduated with a degree in art, and a quarter-of-a-million dollars ($250k) in debt. Is she an artist? No, she’s not that talented. Does she teach art? Or work in any field where a knowledge of art is important? No. She didn’t want to do any of that. She did work part-time at a discount department store while her father whined and complained about the atrociously high cost of education.
It’s not the education that’s expensive, it’s the poor choices.
“I just looked up my state’s tuition: for in-state students, this nationally-ranked state university costs $10k and change for the 2024 — 2025 year. That’s about $50k for 4 years, which isn’t nothing, but it’s not 6 figures, either”
True. As long as you can live under a bridge and eat thin air for four years. Any takers?
I admit my comment about “6-figures worth of debt” was very off-hand. However, given an average interest rate of [does some searching] 6.53% WHAT THE FUCK
Sorry, just freaked out a bit there… Given $50K in debt at 6.53%, you can fairly easily end up looking at 6 figures in actual repayments. And as sonofrojblake points out, that’s just tuition, and you also need to live. Oh, and the degrees that get you the really good jobs (medicine, law) are way more expensive…
Anyway, that wasn’t really the point. Not everybody is cut out for college or the sorts of jobs degrees get you, and we increasingly live in a society where many of the other options amount to “eat shit and die”, despite the fact that we probably need garbage collectors and ditch diggers rather more than we need management consultants and advertising executives.
As something of an aside, can I just mention that I absolutely hate the idea that either education or “social mobility” are cures for structural inequality? Both merely seek to change which individuals end up on the winners podium of life -- they don’t change the number of winning places available, or the consequences of failing to land one. I’d like to live in a society where everybody gets a dignified life -- including the people who made “poor choices”, however you define that -- and not just the people who “earn” it by winning at capitalism. (Stop press, we’ve changed the rules! Again!)
@Dunc @5
Way back when (2008?) , when we trying to decide how much to put in a 529 plan for the children that we were planning to have (savings that can be used for education , US) -- the 4 year under grad computer science course in a good college, in state, (I think my spouse selected UC Berkeley because she assumed the kids were getting her intelligence and my looks) came upto $250,000 per kid(everything included like staying on premises etc). So your number may not be that off , though you can off course do it for cheaper.
I always roll my eyes at people who do that but wouldn’t by a ticket at the same odds when the jackpot is only a measley $20M. Like, who could even live on such a paltry sum?
re Trickster Goddess @7: I have always said that I would prefer to win a $20md jackpot than $100md or more. A $20md jackpot would yield me about half that, $10md. Without even investing, I could draw $200,000 per year out of that and it would last me 50 years, way longer than I or my wife will live. And I could live pretty damn well on $200,000 per year, which is over $3800 per week.
Not the first time this has happened… I’ve forgotten the source but I remember a case over 20 years ago where someone played the lottery like that. Fun fact was the lottery required all tickets be filled in by hand, so no printing of tickets. Someone did the math, and realised that hiring a bunch of folks to fill in a gazillion lottery tickets would still be profitable, got people to invest, and made him and his investors (but not the poor sods who had to color in circles for weeks) a bunch of money.
Found the source: it’s referred to in the book “The Drunkard’s Walk — How Randomness Rules our Lives” by Leonard Mlodinow, the Virginia (Australia) Lottery in 1992 was played in this way.
Trickster Goddess @#7,
Another factor is that when the prize gets larger, the lottery gets a lot more media attention and this may draw in more people to bet, simply because it is pushed to the front of their consciousness.
@4 is just stupid, but @5: did you miss the part about $18k and $23k across four years? That was tuition & books for community college and room, board, tuition, books at uni. Both worked fulltime in the summers and winter break, and part-time during the semesters. They graduated with no debt, no student loans. And the state school is nationally-ranked in computer science and world-ranked for physics.
@6, according to Berkeley’s registrar website, 2024 -- 2025 was roughly $10.5k for the year including misc. fees like health and parking. Back in 2008 it was likely much cheaper. Unless room, board and books were an additional $50k/year, the total wouldn’t have been a quarter-million.
Summary: just because one CAN run up outrageous educational fees doesn’t mean one SHOULD if they can’t afford it.
@kaydid @12
At that time we were estimating that if we had kids the following year , and then send them to college 18 years later , what would it cost
We used vanguard’s calculator -- https://vanguardcollege.ssnc.cloud/collcost.php
With the following values for Berkely -- 4 years , In state , Include room and board and a 5% inflation it comes to 150K today about 200K in 4 years time (which is when my older son becomes eligible for UC Berkely). As before though , yes it can be cheaper (for e.g. they could stay with us for 3 of the 4 years and commute with BART) , knocking about 80K right there with no actual difference to their education but few American kids seem to take that option.
No, but I’m not convinced that you can generalise from it.
Wait, even your lottery prizes are quoted before tax?
In sensible countries, the amount quoted is the amount you are awarded. If you’re only getting £10 000 after tax, it’s illegal to advertise the prize as being more than that.
@13, per the Berkeley rates site, assuming a double dorm room (rates are set up for single, double, triple, and quad) plus meals and random fees: $22k and change. Add that to tuition and it’s about $33k. If they stayed with you, it would be about $50k for 4 years plus the cost of BART. I tried to find Clipper rates for BART but I’m not sure what stations you’d need to plug in, and discount rates apply there, too.
HOWEVER, nobody’s holding a gun to your head and forcing you to send your kid there. There’s options: start at community college for a fraction of the cost and transfer. Look for scholarships. Pick a school you can afford. Do all three.
From the California Community College website:
This is something that just stuns me, like the coworker who let his daughter pick an out-of-state private college and went into debt at a quarter-of-a-million dollars 20 years ago and has whined and moaned about it ever since. If the daughter wanted to drive a Bentley, would he have taken out loans to let her? If she’d demanded steaks wrapped in gold leaf for every meal, would he have taken out loans to get them for her? If she said she simply could not live without a whole closet of $10k -- $50k designer handbags, would he have gotten them for her?
If something optional costs too much, then it costs too much. Find an alternative, or pay the higher fees, but you’re not a victim because you chose to pay more than you have to when other options exist.
In New York state, the community colleges in the State University system (SUNY) charge about $6k/year in tuition. A large portion of CC students live locally and get a 2-year degree. Another large portion use that as a starting point and then transfer to a 4-year+ SUNY campus where tuition is about $7k/year for in-state residents. There are also Excelsior Scholarships for NY state residents for families with incomes below $125k/year. This can pay for nearly the entire tuition (depending on details). The SUNY system is a high quality, respected system, and people with modest incomes can obtain a quality education up through and including Masters and PhD without going deep in debt. IOW, no, you don’t have to accrue a six figure debt to receive a worthy education with appropriate credentials. OTOH, there are private universities in the state that charge in excess of $70k/year for tuition (but to be fair, many have relatively generous scholarships for high performing students, too).
I worked in the SUNY system for 40 years. I had a great many students who had modest financial backgrounds and did very well for themselves without huge debt.
And I will add that I had a fair number of students who received their Associates degree and then went to a private “name” college for the final 2 years (often with generous scholarships because they did so well in the CC environment). Definitely more expensive (and arguably not a better education), but some people value the cache of a big name institution. Sort of splitting the difference. Mind you, I taught engineering, so our grads didn’t have a whole lot of difficulty finding good paying jobs.
@Katydid @16
Thats a funny way to phrase parents trying to select a “good” enough college for their children. But there are other factors too -- getting a campus placement is much easier from UC Berkeley than it is from a community college , no ? In any case you can have a similar level of education for cheaper , sure -but as above UCB is 14.5K a year , the lodging etc is what takes it to 35K a year .
Also I could have also used Stanford as the example 🙂