[HN Gopher] There Was a Texas Lottery Arbitrage
___________________________________________________________________
There Was a Texas Lottery Arbitrage
Author : ioblomov
Score : 134 points
Date : 2025-03-05 17:49 UTC (5 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| ioblomov wrote:
| https://archive.ph/DOCG0
| WorkerBee28474 wrote:
| If you're into this, you may enjoy reading about Joan Ginther, a
| statistician and multiple lottery winner.
|
| Her Wikipedia article is sadly short [0], but there are a number
| of other sadly short and poorly sourced articles around the web
| to augment it.
|
| [0] https://en.wikipedia.org/wiki/Joan_R._Ginther
| ceejayoz wrote:
| There's also a film about a similar scenario:
| https://en.wikipedia.org/wiki/Jerry_%26_Marge_Go_Large (based
| on https://highline.huffingtonpost.com/articles/en/lotto-
| winner...)
| adiabatichottub wrote:
| > In April 2023, an entity called Rook TX effectively purchased
| the jackpot, collecting a one-time payment of $57.8 million, by
| acquiring virtually all of the 25.8 million possible number
| combinations. The operation was planned in Malta and funded by a
| London betting company. It was carried out by four Texas
| retailers, all connected to online sales companies called
| couriers.
|
| Well, as the saying goes, "It takes money to make money."
| smelendez wrote:
| Lottery couriers are companies that will buy and scan lottery
| tickets for you for a fee. Most of the time, they're not
| actually doing much courier work. If you win a small amount,
| they'll cash the ticket for you and credit it to your account,
| and if you win a big enough amount that you have to cash it in
| directly with the state, they'll actually deliver you the
| winning ticket.
|
| It's basically a workaround for restrictions on online lottery
| sales. I'm not sure how states should handle online lottery
| gambling--there are a lot of considerations around addiction,
| potential fraud, money laundering, and erosion of retailer
| lottery revenue and shopper base--but I don't think this is it.
| ryoshu wrote:
| A friend is working on a system that automates scratch off
| tickets and uses computer vision to detect winners. Not sure
| what the end product is.
| Almondsetat wrote:
| The Gambl-o-Matic?
| withinboredom wrote:
| why.... not just give the user the ability to see it and
| evaluate? Why the AI?
| 0cf8612b2e1e wrote:
| I assume the opportunity is doing this in huge volume.
| Getting a cheap computer to make the initial call is
| faster than relying on teams of humans.
| rigrassm wrote:
| The Texas lottery has an app you can use to scan the
| tickets unique barcodes printed under the scratch off layer
| and find out if and how much the ticket won.
|
| Haven't ever dug into it but the app doesn't require a
| login to use that function so I'm willing to bet there's an
| unauthenticated API endpoint that could be sniffed out
| (they may possibly have it documented somewhere too).
|
| Outside of being a fun itch to scratch, using the app
| directly is fast enough with very little effort.
| pests wrote:
| In Michigan lottery tickets have (used to?) a one letter
| code somewhere in the blank area that gives you the
| winning amount. I used to be careful not to scratch non-
| play areas back when my grandfather owned a store as it
| might reveal the winning amount. Might be useful.
| nosioptar wrote:
| It'd be better to scan the barcode that lotto machines scan
| to determine if it won. It's possible, but rare, to get a
| misprint where the ticket does not have winning symbols,
| but scans as a winner.
|
| I pick up and scan any scratchers I find littered near
| stores. I've made a few hundred dollars over the years on
| misprints like that.
| JamesSwift wrote:
| What are you referencing to know if its a winner? You
| just bring them in and ask to scan?
| vuln wrote:
| In the US most places have a little reader thing that
| scans the barcode and tells you how much you've won. This
| helps cut down on the time it takes the cashier to scan
| each one. You know instantly if you're a winner, no need
| to look at symbols.
|
| For a visual version of the above. Go check out Mr
| Beast's video where they scratch off 1,000,000 dollars
| worth of scratch offs. The ending wasn't surprising to me
| but may be to some.
| IncreasePosts wrote:
| A very common, sad sigjt in rundown areas is some old
| person, clearly with limited funds, standing at the lotto
| counter in a convenience store, just rapid fire scanning
| scratch-offs. And then buying more scratch offs and rapid
| fire scanning them, etc.
| Carrok wrote:
| This is peak late stage capitalism.
| criddell wrote:
| Now this story that popped up last week makes some sense:
|
| https://www.texastribune.org/2025/02/27/texas-senate-lottery...
| tarentel wrote:
| A lot of people are focusing on the courier aspect of all this
| which is fine, but I didn't know there were any lotteries you
| could just outright win, with a profit, if you had enough money
| to buy enough tickets. I assumed people would design lotteries
| where the cost/reward ratio was such that this would never make
| sense.
| mtremsal wrote:
| IIRC the remaining risk lies in multiple people winning or
| attempting arbitrage simultaneously, thus dividing the
| expected revenue by the number of winners. So not a free
| lunch.
| cgriswald wrote:
| IIRC, there was at least one case where the lottery got
| wise that this was happening and refused to sell the
| parties involved any more tickets. They had enough tickets
| for better than even odds, but not a guarantee. IIRC, they
| won.
| bluGill wrote:
| I've heard of this happening, but it was 20+ years ago and
| so I'm not sure how to look this up.
| mrspuratic wrote:
| https://news.ycombinator.com/item?id=20144870#20145422
|
| The link therein has suffered link rot, try: https://en.w
| ikipedia.org/wiki/National_Lottery_%28Ireland%29...
| dec0dedab0de wrote:
| Im not sure about this one, but it usually happens with a
| progressive jackpot that gets bigger every time someone
| doesn't win.
| toast0 wrote:
| There's a couple ways this works. Progressive jackpot games
| (Powerball, Mega Millions) allocate some amount of every
| ticket sold for winnings, but if the jackpot isn't won on a
| particular drawing, excess winnings are added to the prize
| pool for the next drawing. After a certain point, the jackpot
| prize for a single winner is more than the cost of buying all
| possible tickets. There's a chance of sharing a jackpot,
| which is hard to model, but makes the payout worse.
|
| A similar game feature is "roll down", again excess prize
| money accumulates over several drawings, and when a certain
| criteria is met, the excess prize money is distributed over
| some set of tickets (possibly all winners). Again, this sets
| up the possibility of a positive expected value, and you have
| to consider other ticket buyers as well.
|
| A trickier one is for scratch off games. Many lotteries share
| the number of tickets sold and the prizes left. If you assume
| all (big?) prizes are redeemed shortly after their ticket is
| sold, you can estimate the expected value of purchasing the
| remaining tickets. When the game opens, the expected value of
| a ticket is less than the purchase price, but depending on
| the observations of tickets sold and prizes redeemed, you
| might estimate that the expected value of the remainder of
| tickets has improved.
|
| Ex: if there were 1 million scratchers printed, the cost per
| scratcher was $1, and there was only one prize $500,000on
| open the expected value of a $1 ticket would be $0.50. If the
| winning ticket was redeemed, the expected value of remaining
| tickets would be $0. If it was reported that 999,999 tickets
| were sold and the winner had not yet been claimed, it might
| be reasonable to assume a higher expected value for the last
| ticket --- although there's no rigorous proof there, someone
| may have purchased the winning ticket already and not
| redeemed it for whatever reason.
| justjash wrote:
| I'd imagine scratchers would be almost impossible unless
| you could somehow get all the tickets from every place they
| are sold. I'm not into gambling, but I guess it might work
| if there is X number of prizes/money per roll of tickets.
| kerkeslager wrote:
| > I guess it might work if there is X number of
| prizes/money per roll of tickets.
|
| In most cases, there is, which is part of why a huge
| percentage of scratchoff prizes are won by workers at the
| place that sells them. Most players will scratch and
| redeem their prizes right in front of you, so if you
| watch a certain number of scratches occur in a roll and
| you know the prize structure of the particular card, you
| can calculate how many non-winning scratches you need to
| see for the odds to be in your favor.
|
| I looked into this a few years ago and considered
| starting one of those stands that sells scratchoffs to do
| just this, but decided a) it wasn't quite lucrative
| enough to be worth it, and b) I wasn't sure of the ethics
| of skewing the odds against your customers like this
| anyway.
| ianferrel wrote:
| Expected Value is Expected Value, though.
|
| Even if you can't buy every ticket, there is well-
| established math about how to optimize profit from a
| venture with known risk and reward, and the math does not
| require you to exhaust the statistical universe.
| tstrimple wrote:
| This has happened. IIRC it was a Stanford statistitian
| who watched the distribution pattern for winning tickets
| for a certain scratch off game in Texas. She bought all
| of that ticket from that particular store and won $10M. I
| think that was her fourth scratch off win.
| bena wrote:
| That number seems wrong. The number of combinations should be
| 54 x 53 x 52 x 51 x 50 x 49. Which is 18.6 billion-ish.
|
| What am I missing here?
| teraflop wrote:
| You're overcounting by a factor of 6! = 720, because you're
| counting different orderings of the same numbers multiple
| times. "1,2,3,4,5,6" and "6,5,4,3,2,1" are not different
| tickets.
| bena wrote:
| Shit, I see what you're getting at.
|
| With 54 x 53 x 52 ... you get all of the permutations of
| all the sequences. It generates 1,2,3..., 2,1,3...,
| 3,1,2..., etc.
|
| Yeah, I missed that. And each sequence has 6! permutations.
| Etc.
| madcaptenor wrote:
| Divide by 6!=720 because the order doesn't matter.
| gblargg wrote:
| > by acquiring virtually all of the 25.8 million possible
| number combinations
|
| That must have been tense knowing they didn't purchase that
| last fraction of a percent.
| ronyeh wrote:
| Like when you use that last discard to attempt to draw the
| flush five.
| kubectl_h wrote:
| > "We fully expected that they would laugh at us and say, 'Well,
| no, of course you can't do this,'" he said. But the company
| agreed it would at least sound out the lottery agency.
|
| > "We were very surprised that the answer was yes," Potts added.
| "As a person and a lottery player, I cannot believe they said
| yes. I was shocked."
|
| Well Texas bills itself as the most business friendly state in
| the country. I'm not surprised that extends to some shadowy
| Maltese concern effectively purchasing the lottery jackpot at 25
| cents on the dollar.
| AlexandrB wrote:
| I don't get why you _shouldn 't_ be allowed to do this and it's
| not the first time it has happened either[1]. "Investors" in
| this kind of thing are still taking a small risk that they
| might have to share the winnings with another winning ticket.
|
| [1] http://investpost.org/mutual-funds/group-
| invests-5-million-t...
| bryanlarsen wrote:
| If normal lottery ticket buyers knew this sort of thing was
| going on, they'd likely stop buying tickets.
| byteknight wrote:
| I mean the near-impossible odds weren't enough to dissuade
| them, I doubt some more statistics will do it.
| hinkley wrote:
| When it stops being statistics they notice.
| byteknight wrote:
| It didn't stop. What are you referring to?
| hinkley wrote:
| Pay to win with 100% success rate.
| bryanlarsen wrote:
| Many people care less about the odds and more about
| feeling that things are fair, that they are the same for
| everyone.
| bruce511 wrote:
| I know "fairness" is a virtue we teach to children, but
| honestly there is nothing fair about any part of life.
|
| Where you are born, what ethnicity you are, how rich your
| parents are, how healthy, athletic, brainy, beautiful you
| are, what you eat, how you live, nothing in any part of
| your life is "fair".
|
| So sure, play the lottery if you like, but don't pretend
| it's fair. Indeed the unfairness of the winning is
| entirely the point of it.
|
| Of course if you are playing the lottery and dreaming of
| a better life, you already know how unfair life really
| is.
| unethical_ban wrote:
| It is not an inevitability that a lottery system will be
| rigged to effectively guarantee a wealthy group gets the
| jackpot and profits.
| NooneAtAll3 wrote:
| tickets are still same for everyone
|
| it's just that optimum stopped being "zero tickets
| bought" and instead shifted to "all tickets bought"
| gruez wrote:
| How is a company buying a bunch of tickets "unfair" when
| there's never a limit on how many tickets you can
| purchase? Is a compulsive gambler who buys 10 tickets
| also being "unfair" by buying 10 tickets?
| bryanlarsen wrote:
| It doesn't matter if it's actually unfair or not. What
| matters is if it feels unfair.
| recursive wrote:
| You might be right. But to me, this doesn't feel any less
| unfair than a lottery does in the first place. But I
| probably don't understand the state of mind or
| motivations that would compel someone to buy a ticket in
| the first place.
| cool_dude85 wrote:
| It's tough to draw a clear bright-line rule for this, but
| the line sits somewhere between "buy 10 tickets" and "buy
| every ticket". You can write a law saying not to run this
| kind of operation and let the jury decide whether someone
| broke it.
| kubectl_h wrote:
| Well in this case the "unfairness" (loaded term) would
| the lottery commission going out of their way to
| accommodate this scheme. If this outfit wanted to
| arbitrage the lottery they should have to go about buying
| the tickets any other party would have.
|
| If the state wants to encourage this kind of large scale
| game playing, then they should outline the process for
| taking part in it clearly and ensure everyone has equal
| access to the tools that enabled it.
| janfoeh wrote:
| Mostly you're not buying a chance to get rich, you buy
| yourself permission to dream about the "what if?" until
| the numbers are drawn.
| bryanlarsen wrote:
| And you don't need to spend very much money to do that.
| For example, buying a ticket once per year is sufficient.
| You can still dream about the win you'll get the next
| time you buy a ticket.
|
| Group buys add a social context that has significant
| value too.
| sadeshmukh wrote:
| Good on them.
| dalbasal wrote:
| Bingo.
|
| This is the literal answer to "why." Also bans on various
| casino hacks.
| toomuchtodo wrote:
| Lotteries. Retail crypto trading. Sports betting. Casinos.
| These are systems legitimized to vacuum up fiat from rubes.
| Your average human is unsophisticated as it relates to
| statistics, financial literacy, etc. They are simply
| different versions of alcohol and recreational drugs,
| hitting the same reward centers in the brain.
| lozenge wrote:
| Just make the maximum jackpot payout $25.7 million per
| draw. Any remaining money in the jackpot remains for the
| next draws.
| onemoresoop wrote:
| It kindof beats the original purpose of lottery, chance.
| dist-epoch wrote:
| Because "normal" players will get upset, so it's bad for your
| business.
|
| The same thing happens in sports betting, where retail
| punters absolutely hate if someone places a bet online during
| a game exactly after a goal was scored, but before the odds
| move. So even sports betting exchanges like Betfair forbid
| this kind of arbitrage and void it. Not because they really
| care, but because it annoys the other players.
| LgWoodenBadger wrote:
| While I don't understand what "retail punters" refers to,
| how does someone else's bet affect mine? I can't think of
| any scenario where I'd care once my bet was placed
| cool_dude85 wrote:
| The risk here is that you buy your lotto ticket and hit,
| and have to split the jackpot you won playing the "right
| way" with an arb corporation.
|
| Also, not a risk as such, but it ensures that the jackpot
| will only ever reach a certain level.
| hn_throwaway_99 wrote:
| Well, I don't think it should be allowed because it basically
| defeats the purpose of a lottery, but, as Matt points out in
| his article, I think a better way to prevent it is to make it
| _easier_.
|
| If it becomes super easy to purchase millions of lottery
| tickets, then any arbitrageur would likely be dissuaded
| because the risk of someone _else_ doing it (and having to
| share the winnings) go up by a ton. You could still have
| collusion, but that should be enforceable by laws against
| collusion I 'd hope.
|
| It this case there were rules to prevent arbitrage that were
| basically just not enforced by the lottery commission, and
| that's really the only reason this was possible.
| patja wrote:
| I'm curious what you define as the purpose of a state
| lottery. The Texas lottery's mission is to generate revenue
| for the state.
|
| Are you arguing this is counter to the purpose because the
| net revenue will be diminished by the certain expense of
| the payoff?
| Apofis wrote:
| For the same reason corporations shouldn't be purchasing
| Residential Real Estate (individual houses) it destroys the
| market for the consumers its intended to serve.
| gruez wrote:
| What's the market that lotteries are supposed to "serve"?
| Taking money from poor people (lottery tickets are
| disproportionately bought by them) and giving them to the
| government, basically working out to an regressive tax?
| Apofis wrote:
| It's not really helping those poor people when those same
| lotteries are then bought by large corporations for
| profit.
| recursive wrote:
| You're right, but it's also not helping them either way.
| There was never any help to be had.
| throw16180339 wrote:
| Poor people bought tickets in the illegal numbers racket
| (https://en.wikipedia.org/wiki/Numbers_game) before state
| lotteries existed.
| cess11 wrote:
| Spinola Gaming are hardly shadowy. Since a few years back
| they're owned by HeadsUp Entertainment, HDUP on whatever stock
| market.
|
| It's not surprising that a corporation specialised in producing
| B2B products for lottery and gambling corporations sussed out
| this opportunity, it's kind of their core competency to figure
| out such things and make them obvious to their customers in
| their offerings.
| hinkley wrote:
| That couple in New England that was doing it probably made more
| money off of selling their story to Hollywood than they did off
| the lottery tickets.
|
| The amount of time they were putting into their "scheme" sounds
| brutal. I think a lot of people here could have netted more money
| per hour by studying up to pass a FAANG interview instead of
| buying lottery tickets one at a time.
| danielmarkbruce wrote:
| 100%. There are arbs not worth doing all over the place.
| hinkley wrote:
| They were making something like $20+ an hour each if I recall
| correctly. Better than working retail of course but he'd have
| been better off keeping his career longer.
| danielmarkbruce wrote:
| I guess he does get a cool story as mentioned... which
| isn't nothing in life.
| hinkley wrote:
| Some people are really happy doing mundane tasks for
| hours and hours on end.
|
| But I suspect it was the 'stick it to the Man' aspect
| that made him put in the effort. I'm gonna work really
| hard to get something for 'nothing'.
| thaumasiotes wrote:
| > people here could have netted more money per hour by studying
| up to pass a FAANG interview
|
| My experience of that was that Google asked me to interview, I
| did, my recruiter congratulated me on passing the interviews
| and told me to expect a job offer by the end of the hiring
| cycle, and then at the end of the hiring cycle she informed me
| that, although I'd passed the interview, my interview
| performance was too poor to be considered for hiring.
| VirusNewbie wrote:
| You should try again, there's a lot of variation on interview
| performance. Also, Google is a bit unique in that they put a
| lot of emphasis on what your _thought_ process is, compared
| to other FAANGs. If you just code a working solution and didn
| 't ask enough questions, that might only get you a mediocre
| score.
| thaumasiotes wrote:
| > You should try again, there's a lot of variation on
| interview performance.
|
| Read the comment again. This is not a story about interview
| performance. My interview performance didn't change after I
| completed the interview.
|
| If Google doesn't want to hire you, they won't, and your
| interview performance is irrelevant enough that they feel
| free to revise it retroactively. Perhaps they aren't
| willing to state their actual reasons.
|
| Studying is not a sensible approach to this problem. You
| would have to address something they actually cared about.
| csa wrote:
| > You would have to address something they actually cared
| about.
|
| Maybe agreeableness?
| happyopossum wrote:
| > If Google doesn't want to hire you, they won't
|
| There are hundreds of teams and hiring managers in
| Google, and an almost infinite number of possible reasons
| why you weren't hired or why the HM changed their mind.
| Treating any large company like a monolith is not gonna
| help you get a job there...
|
| Also, not sure what your recruiter was talking about -
| there's no concept of "passing" an interview at Google -
| you're rated on a scale from "strong do not hire" to
| "strong hire", and the folks doing the selection are
| provided that rating along with a ton of notes about the
| interviews.
| slt2021 wrote:
| if you can pass Google interview, you can pass it
| anywhere else. Try it again, just like with lottery
|
| and Gogel is no longer a top employer, not from career
| perspectives, not from learning, not from a total comp
| closewith wrote:
| Damn, bro, sounds a little like a lottery.
| carabiner wrote:
| > although I'd passed the interview, my interview performance
| was too poor to be considered for hiring.
|
| In what world of hiring would passing an interview be
| considered a failing interview? If it's too poor for hire
| then it's a fail.
| mattlondon wrote:
| I've heard these stories before.
|
| What happens if there is more than one winning ticket? In the UK
| they just divide the jackpot up between the winners so you might
| get less. I guess that is the risk.
| martinky24 wrote:
| Did you read the article? This is literally covered
| _extensively_ in the first paragraph.
| lern_too_spel wrote:
| It's missing some prior work. When the jackpot gets higher,
| more people play, and the number of winners expected to split
| the prize increases. You can do the EV calculation using
| historical purchase data.
| https://phaethonprime.wordpress.com/2015/10/24/mega-
| millions...
| hinkley wrote:
| But a fraction of the ticket sales are also rolled back
| into the lottery. These people won when it was almost 4:1
| payout.
| mattlondon wrote:
| It was behind a pay wall, nothing apart from the first
| sentence or two.
| gxs wrote:
| He quite literally addresses this in the article
| danielmarkbruce wrote:
| There are a lot of arbs in the world. Same principle - they take
| a lot of work to get done. Physical commodities, real estate, etc
| waynenilsen wrote:
| A similar case in 2011
|
| https://www.bostonglobe.com/metro/2011/07/30/lottery-game-wi...
| gxs wrote:
| Hm call me old fashioned, but hearing that this was done by
| people in Malta backed by people in London sort of broke my heart
|
| I get HN isn't sympathetic to this kind of stuff (ovarian lottery
| and all that jazz), but I, personally, much rather this have been
| some kids from a random town in Kansas or something vs pros from
| other countries
|
| Edit: I think you are all confused and acting as if I didn't
| understand why this happened or how, I was just making a
| sentimental lament, but I should know better by now
| SecretDreams wrote:
| > but I, personally, much rather this have been some kids from
| a random town in Kansas or something vs pros from other
| countries
|
| Well, that's the rub and ultimate downfall of our current
| implementation of capitalism.
|
| Even if you have a good idea that almost nobody else has yet
| thought of, you've got to have enough resources to be able to
| comfortably execute it such that if you fail, your life won't
| be over. Most of the time, the only people who can do that
| already have a lot of money. So most innovators and innovation
| naturally have to come from people that already have money and
| connections; HOWEVER, there's very little reason to believe
| only good ideas come from people with money or power.
|
| So little Timmy from Kansas might have even thought this was a
| nifty idea, but Timmy's dad is going to roll his eyes and get
| back to work. Nobody on the ground is ever going to be able to
| execute what is a relatively obvious play. Instead, they lose
| their time-advantage and big Timoteo from Malta comes in for
| the prize.
|
| Worse still, big Timoteo has now accumulated more resources
| that puts him even further ahead of the pack for future such
| endeavours that should really need have success tied to
| starting resources.
| nightpool wrote:
| Where are "some kids from a random town in Kansas" going to get
| $24M dollars?
| jldugger wrote:
| Maybe they know a guy[1].
|
| [1]: https://www.justice.gov/usao-ks/pr/victims-
| cryptocurrency-sc...
| jmholla wrote:
| > But in most of modern life, the computer is the main thing, and
| it is somewhat eccentric to suggest that the computer is wrong.
| What, the piece of paper that I skimmed and signed and stuck in a
| drawer is the deal, and not the computer screen that I look at
| every day? Seems implausible. The contract is just a piece of
| paper; the computer is real life.
|
| What in the world is the author talking about here? Why wouldn't
| the contract you signed be the contract? And the administrative
| error is an error in execution of the contract, so of course
| there's some space for dispute. Without that contract, he
| wouldn't have shares in the first place.
|
| > If you give your CEO options that expire in August 2024, and
| you put into the computer that they expire in October 2024, then
| they expire in October 2024. How was he supposed to know that
| they expired in August?
|
| Flipping this around, if the CEO signed a contract saying they
| expired in December then the system said they expired in October,
| I would still expect the shares to expire in December. By the
| author's logic, they would expire in October.
| nightpool wrote:
| They're talking about the world that most people live in, where
| lawyers are expensive and bureaucracies are run by computers
| and people looking at computers. They're saying that 90% of the
| time, the computer is correct, and people will look at you
| strangely if you say that "No, my contract with the insurance
| company says that it has to cover this medication, so your
| pharmacy has to fill it, regardless of what the insurance's
| computer system says". Everyone knows that the insurance's
| computer system has a bug, everybody knows that the medication
| they're trying to give me should be covered, but nobody is able
| to fix it.
| stickfigure wrote:
| Levine is having a bit of fun. Contracts are an agreement
| between two parties; in other Money Stuffs he's talked about
| how the written contract is also secondary to the agreement as
| understood by both parties. The paperwork makes it easier to
| enforce in court, but you can (even in 2025) still have
| enforceable contracts with just a handshake.
| compiler-guy wrote:
| It's not the author's logic. It's the court's logic.
|
| Contracts are messy in the real world. Sorting it out can be
| tricky. The various doctrines of estoppel are relevant for
| sorting things out.
|
| Of particular pertinence to this case, "conventional estoppel"
| means that if both parties consistently behave in a certain way
| that can become an expectation to be relied upon (over-
| simplified!)
|
| In this case, if the guy reasonable relied on the convention
| that he would be notified when they expired, and wasn't, then
| he may have an estoppel claim.
|
| There is a large framework around contract law that takes a
| semester in law school just for the introduction.
| thaumasiotes wrote:
| > By the author's logic, they would expire in October.
|
| That's... not the logic stated in the article. In both cases
| you get the expiration date in the contract.+
|
| If you make a false representation to someone, and they rely on
| that, which is exactly what happened here, you can be liable
| for the damage to them, which is also exactly what happened
| here.
|
| If you make a false representation to someone, and nothing bad
| happens, and they find proof that you made a mistake, then...
| you adjust what you're saying, and there are no other
| consequences.
|
| + Kummeth contended that, had he been aware of the options'
| actual expiration date, he would have exercised them, and this
| was obviously true. He was awarded an amount based on their
| value around the time of expiration specified in the contract,
| not their value at the time he tried to exercise them.
| s1artibartfast wrote:
| IMO, Matt does a pretty bad job of illustrating that point.
| It seems like he is construing this ruling as a an example of
| the computer superseding the contract.
|
| >What, the piece of paper that I skimmed and signed and stuck
| in a drawer is the deal, and not the computer screen that I
| look at every day? Seems implausible. The contract is just a
| piece of paper; the computer is real life.
|
| >The stock administration platform is real life; the contract
| is just a contract.
|
| Maybe there are 2 levels are sarcasm and he is actually
| saying the paper contract drives the ruling (which it did),
| but I dont see it.
| jmholla wrote:
| > IMO, Matt does a pretty bad job of illustrating that
| point. It seems like he is construing this ruling as a an
| example of the computer superseding the contract.
|
| Thank you. That is exactly the point I was trying to make.
| It wasn't the computer. It was execution of the contract
| and which side of the contract performed poorly in that
| execution. It's not as reductive as that's what the
| computer said.
| s1artibartfast wrote:
| I had the same takeaway. The court didnt say the September sale
| price represented in the computer must be honored. It rolled
| the sale back based on the august date in the contract.
|
| This is the court essentially saying "you both errored in
| executing the contract as written" and then trying to figure
| out what would have happened in the hypothetical where each
| executed it faithfully. Looking at the ticker, and august
| average sale price was lower than the September transaction
| date.
| spelunker wrote:
| As a side note, my home state also allows online purchasing of
| lotto tickets through "couriers", which turns out to be a strange
| workaround that let companies like Lotto.com or Jackpocket
| operate in some states:
|
| https://www.locance.com/blog/what-are-lottery-courier-servic...
| s1artibartfast wrote:
| It's article is filed under Bloomberg opinion, but I failed to
| find a common thread or observation has I read to the end. Is
| this just a weekly Roundup of financial events?
|
| About the 23andMe and pharma events were specially interesting.
|
| That said, I disagree with Matt interpretation that the computer
| entry overrode the contract. Arbitrator stipulated compensation
| based on the contract date, not the computer executed date
|
| When someone has 35 million of options, i would expect both
| parties have some duty to understand the terms. That said, they
| also have a duty to not misrepresent the contract after the fact.
|
| [edit] My primary point is that I didnt see much opinion or rant
| Arcuru wrote:
| The submission is a link to the daily Matt Levine column where
| he typically rants his opinions on Finance.
| bryanlarsen wrote:
| You're one of today's lucky 10,000 by discovering Matt Levine's
| Money Stuff column. It's a _daily_ column that is almost always
| as interesting as this one was.
| https://www.bloomberg.com/account/newsletters/money-stuff?so...
| buybackoff wrote:
| It's not only a column but a daily email. Of 20 unread emails
| in my inbox 17 are these ones. It's too good to archive
| without at least skimming through. But it's a longish read
| and accumulates fast.
| bryanlarsen wrote:
| Yes, I should have mentioned that -- the link I posted is a
| link to subscribe to the email.
| s1artibartfast wrote:
| I have read a lot of Matt Lavine, but just remembered it
| having more editorial analysis. Maybe that is the difference
| between the daily and other articles?
| DavidPeiffer wrote:
| >Is this just a weekly Roundup of financial events?
|
| Matt publishes his newsletter Monday-Thursday, and a podcast on
| Fridays. It is a roundup of stories with high quality
| commentary on 2-4 stories, and a list of additional interesting
| articles at the bottom. He used to be an attorney with Goldman
| Sachs, giving him a good background for adding context to
| market corner cases people exploit, incentives of different
| parties involved in deals, legal perspective, etc.
|
| Two of his main lines is "everything is securities fraud" and
| "everything might be insider trading", with probably 100+
| examples of each over the years.
| lenerdenator wrote:
| There's a fine line between this, and the habits of a guy whose
| wife left him because of his luck with the ponies.
|
| That line? Millions of dollars.
| impish9208 wrote:
| https://news.ycombinator.com/item?id=41799080
| withinboredom wrote:
| Huh. Reminds me of my favorite idea to "hack" the lottery:
|
| 1. get access to a lottery ticket terminal
|
| 2. get access to a router firmware in the lottery datacenter en
| route to the database
|
| 3. wait for the query to get the winning numbers from the
| database
|
| 4. hold that packet and submit an INSERT into the database with
| you as the winning number at a predetermined date/time in the
| past
|
| 5. release the packet to query the database
|
| 6. hack the terminal to print your winning ticket with the
| predetermined date/time in the past
|
| 7. profit?
|
| It probably doesn't work, but it was fun thinking about when I
| was younger.
| gruez wrote:
| >2. get access to a router firmware in the lottery datacenter
| en route to the database
|
| Seems non-trivial given that the database server is likely to
| be in the same datacenter/rack/physical machine. If you have
| this much access you might as well plant a backdoor in the
| server and tamper with the database however you want.
|
| >3. wait for the query to get the winning numbers from the
| database
|
| Are lottery winners determined immediately after they close? I
| thought they did a number picking ceremony by picking out
| literal number balls from a tumbler?
| bombcar wrote:
| They usually stop sale an hour before the ball-picking, at
| least around here.
|
| I assume that hour is for all the "picks" to be transmitted
| up to them for record keeping.
| immibis wrote:
| In the Ethereum blockchain, some people do exactly this - for
| more details, search "miner-extractable value".
|
| I don't know whether it still applies after the transition to
| proof-of-stake.
| tczMUFlmoNk wrote:
| MEV still applies with proof-of-stake. Whoever proposes the
| blocks can make those arbs. It used to be the miners; now
| it's the block proposers as selected by the beacon chain.
|
| (Some people call it "maximal extractable value" now, to keep
| the initialism and help it make more sense.)
| jcrawfordor wrote:
| Most lotteries, all of them that I'm familiar with, blackout
| ticket sales for several minutes around the draw to avoid order
| sensitivity issues like this. It's funny, lotto vending
| machines here don't say when the drawings are for each game,
| but you can tell by reading the fine print for the five minute
| window where tickets are not sold.
| bentcorner wrote:
| > _submit an INSERT into the database with you as the winning
| number at a predetermined date /time in the past_
|
| If you have this capability then why not just insert all number
| combinations into the db well before draw time?
|
| Makes me wonder how money flows from lottery terminals back to
| the lottery itself. I imagine there's some rigorous bookkeeping
| involved.
| AcerbicZero wrote:
| The lottery is a tax on people with poor judgement skills and I'm
| not comfortable with the state taking direct advantage of its
| vulnerable citizens.
| k__ wrote:
| Better than a private entity.
| bell-cot wrote:
| Especially if said "private entity" happens to be the mob.
|
| My understanding is that the proliferation of casinos, state
| lotteries, etc. has been very bad for organized crime's
| traditional business model.
| tedsanders wrote:
| What's the evidence that it's better than a private entity?
|
| State lotteries pay out ~60% on average, compared to ~90%+
| for casinos. Not apples to apples, but it seems like
| competition does shrink profit margins, for the benefit of
| the buyer. It's not clear to me which is better, but I'd be
| curious to read good analyses, if anyone has a pointer.
| dml2135 wrote:
| I'm pretty sure that the payout % for casinos is determined
| by regulations in most, if not all cases, and not by market
| dynamics.
| s1artibartfast wrote:
| I'd be interested to see numbers on that. Vegas has a 75%
| minimum payout on slot machines. Table games have their
| own return. Roulette, for example has a 98% return.
| Casinos definitely compete on table rake for poker
| pingou wrote:
| Presumably if the state is functioning well and redistributing
| wealth, it is the poor who benefit more of the state's
| increased revenue. Perhaps not in America.
| davidcalloway wrote:
| I get the sentiment but I've never really understood why this
| saying is so popular. A tax is a specific word with a real
| meaning. It is not voluntary. By this logic alcohol and
| cigarettes are themselves a tax on people with poor judgement,
| as well as many other products.
|
| I myself have never understood the thrill payoff that must
| exist for lottery ticket buyers, but I cannot call it a tax.
| WillPostForFood wrote:
| What if the government was the sole legal distributor of
| cigarettes, advertised them, and promised to fund schools
| with the revenue?
| barbazoo wrote:
| I think it's not meant as a literal tax. The idea is that
| "poor" (I've always understood it as a tax on the poor)
| people don't understand the math enough to know how minuscule
| the chances are of winning. Because they don't know, they
| think buying lottery tickets is a financially good idea and
| that's why they do it.
| AcerbicZero wrote:
| I call it a tax because it is a government organized/run
| operation with the objective of removing wealth from
| individuals for (ostensibly) the betterment of the citizenry
| as a whole.
|
| My complaint is about the targeted nature of lotteries and
| the extremely poor investments they make for individuals who
| tend to already struggle in this area. This is compounded by
| the nature of the education system being operated primary by
| the same government.
| quickthrowman wrote:
| The only reason the government is involved is because
| organized crime is who runs lotteries in the absence of the
| state. People would still gamble with black market
| lotteries.
| bluGill wrote:
| Casinos everywhere object to being called organized
| crime.
| quickthrowman wrote:
| Casinos don't run lotteries, as least as far as I'm
| aware.
|
| I was referring to the 'numbers game' racket:
| https://en.m.wikipedia.org/wiki/Numbers_game
| happyopossum wrote:
| > The only reason the government is involved is because
| organized crime is who runs lotteries in the absence of
| the state
|
| No - the reason they do is because they can and it rakes
| in tons of money. Period.
| Supermancho wrote:
| The government doesn't make as much as the ticket
| printers and lottery machine manufacturers/owners. It's
| not about the money for the state. It's about the
| lobbyists who are now entrenched, same as virtually any
| US lottery.
| potato3732842 wrote:
| The only reason organized crime is involved is because
| it's not legal and they're the only ones who do not legal
| at scale.
|
| If it were legal normal business would do it, see for
| example weed or booze before and after prohibition.
| bombcar wrote:
| > I myself have never understood the thrill payoff that must
| exist for lottery ticket buyers, but I cannot call it a tax.
|
| The thrill is being able to dream for a week about what you'd
| do with the winnings.
|
| For the vast majority of "the poor" who buy a ticket, that's
| what they're buying.
|
| There are also a few who spend all their money they might
| have on lottery tickets, but those aren't much of the total
| number of people.
| lurk2 wrote:
| > There are also a few who spend all their money they might
| have on lottery tickets, but those aren't much of the total
| number of people.
|
| Is there any evidence of that? I can recall reading that
| alcohol consumption, for example, has a Pareto distribution
| skewing in favor of so-called "heavy users" (whom most of
| us would refer to as alcoholics). I'd imagine a lot of vice
| industries are similar. Is there any evidence to suggest
| lottery ticket purchases are distributed across a large
| number of infrequent, low-volume purchasers?
| bluGill wrote:
| > The thrill is being able to dream for a week about what
| you'd do with the winnings.
|
| I get the same thrill because I dream of finding the
| winning ticket on a sidewalk. Much cheaper, and the walk is
| good for me.
| potato3732842 wrote:
| I've always considered it a Freudian slip because the people
| who see gambling as screwing poor people out of their money
| are mostly the same people who are in favor of boutique taxes
| and government carrot and stick type stuff.
| cool_dude85 wrote:
| As far as I am familiar, considering the actual cash flows,
| state lotteries do very strongly tend toward screwing poor
| people out of their money. Do you have some evidence
| otherwise?
| butlike wrote:
| Gambling is the only vice which doesn't require external
| input. You can make a bet out of anything.
| mmooss wrote:
| > The lottery is a tax on people with poor judgement skills
|
| Maybe it's just fun and exciting. Do people who bet in casinos
| or on sports have poor judgement skills or is it just exciting?
| mock-possum wrote:
| Lately I've been thinking the same about early access / pre
| orders for games - luckily no state involvement on that front
| though.
| throw16180339 wrote:
| While I understand concerns about the lottery exploiting
| vulnerable people, one reason for having a state lottery is
| that it provides a legal alternative to illegal numbers rackets
| (https://en.wikipedia.org/wiki/Numbers_game), which were
| widespread before state lotteries became common. Criminal
| organizations profited from these underground games, often
| operating without oversight or consumer protections. A state-
| run lottery at least ensures transparency and directs revenue
| toward public services rather than illicit enterprises.
| bluGill wrote:
| OTOH, legal lotteries get a lot more people to gamble. I
| suspect that people who gamble either way gamble more as
| well, though this needs a fact check that I don't know how to
| find.
| djeastm wrote:
| How about regulated private industry as another option? Seems
| to work ok for cannabis/alcohol/tobacco and such vices.
| potato3732842 wrote:
| That's just a quality vs quality argument with an appeal to
| emotion at the end.
|
| Not everyone impoverished by state sanctioned gambling would
| do so in an illegal only world. You can bicker about what the
| conversion ratio is but the fact of the matter is that it
| exists. And no, I don't know what it is.
| gblargg wrote:
| I bought one ticket once ($1 or whatever). I reasoned that if
| the universe wanted to give me a win, I had to help it by
| purchasing a ticket. Apparently it didn't have that in mind so
| that's all I'll ever buy.
| Carrok wrote:
| [Offtopic] It drives me crazy that government sponsored lotteries
| are legal, but me playing a round of poker in the basement with a
| few friends is technically illegal. Nevermind sports betting apps
| being legal and poker apps not.
| eMPee584 wrote:
| At least here in Germany, half of sale proceedings of state-
| licensed lotteries go into social causes (our open source
| ecology germany e.v. managed to get several projects funded
| through this). Also, they are obliged to check each player
| against a black list of gambling addicts, which unlicensed
| online gambling venues probably don't give a toss about.
| vuln wrote:
| Yeah the US States claim that the money goes to Education yet
| somehow ends up in the general slush fund in most cases.
| IX-103 wrote:
| It's not that the money from the lottery ends up in a slush
| fund, it's that the government cuts funding for education
| by the amount that it gets from the lottery. The money from
| the cuts gives the government the same amount of "clean"
| money to do whatever they want with.
| cool_dude85 wrote:
| Money is fungible and exactly this trick is common. Best
| to think of the education funding as a minimum below
| which funding cannot be cut. In Florida, where I live, it
| actually funds a specific scholarship program, so it
| really does have the effect of making the program
| difficult to slash.
| afh1 wrote:
| Your car makers and economy sure are doing great.
| syntaxless wrote:
| Playing poker with your friends is legal. If the owner of the
| house took a rake on every hand, that's illegal.
| fsckboy wrote:
| the term they meant is texas lottery "riskless arbitrage".
|
| Buying a whole pizza, then standing in front of the pizza shop
| shelling the slices for a net profit is arbitrage. but it's risky
| because you might not be able to sell enough of them (before they
| get cold, say) to earn back your investment.
|
| when you talk about an arbitrage that is guaranteed profit, that
| is a riskless arbitrage.
| sincerely wrote:
| Really? Doesn't that describe every kind of store where you
| don't create the product yourself as an arbitrage? You're just
| buying items from a supplier and reselling to make a profit
| felizuno wrote:
| For sure. Buying wholesale and selling retail is one of the
| most common/accessible windows of arbitrage you can find.
| brendanfinan wrote:
| This arbitrage is even more profitable if you only buy the lucky
| numbers.
| _trampeltier wrote:
| Kind of the same did happen in Switzerland this January.
|
| https://www.tagesanzeiger.ch/loterie-romande-serial-players-...
| tzs wrote:
| I wonder if anyone is keeping a list of all the times this has
| happened?
|
| I know that its not something new, because 30 years ago when I
| was in law school one of the cases studied in my class on
| transnational taxation was that of an Australian group (if I'm
| remembering the right country...) that tried to buy every
| possible ticket in a US lottery.
|
| My recollection is that they only ended up getting something
| like 90% of the possible numbers but that was enough to get the
| top prizes and questions arose on how that should be taxed and
| whether the cost of the tickets was deductible.
| tjalfi wrote:
| You're thinking of Stefan Mandel's International Lotto
| Fund[0]. They tried to buy every ticket in the Virginia state
| lottery in 1992. They won the money, but IIRC there were
| years of litigation.
|
| [0] http://investpost.org/mutual-funds/group-
| invests-5-million-t...
| waldrews wrote:
| Ah, so if doing this once can net tens of millions, all we have
| to do is repeat the process a few million times, and the national
| debt is covered. That's where automation comes in.
| paulsutter wrote:
| The key here is that only 1 million tickets per week are sold,
| which is the reason the company could estimate a probability that
| others buy the winning ticket forcing a split
|
| Jackpots higher than the probability of winning happen so the
| time, but thats not enough information to take the risk
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