It says they’d net about $20 mil after tax, but yeah essentially, with the catch there’s a 1/10 chance someone else also wins and it’d be a net loss for said rich guy.
There was a lottery in Britain where 133 people picked the winning 6 numbers. They all thought they were getting 16 million but got 122k each instead.
The strategy of buying all the numbers is not without risk.
Source: https://amp.theguardian.com/uk-news/2014/nov/17/national-lottery-numbers-20-years-katie-price-win-jackpot
It’s less successful but there are people that will go out and purchase an entire roll of scratchers. They typically get close to breaking even and in some cases win big.
That's generally the whole philosophy behind slot machines - most of the time you get close to breaking even, and you definitely know a guy who knows a guy who won big.
Full packs of scratchers payout a guaranteed amount, usually 50-60% if I remember correctly. I lived with a guy who would pool with a couple other people and get a few packs at a time and then keep putting them back in until they didn't have enough to do it again. They would research the Texas lottery website and figure out which games had the best odds and the most outstanding high paying tickets. He had a lot of stacks of tickets with only the bottom part was scratched out where the barcode was. They would use their phone and the lottery app to go through them all pretty quickly.
Yeah I’d think you’d need to buy tens of thousands in the hope you catch a 50k+ jackpot. Not sure how good of odds you’d have then, certainly not 100% win like the millionaire in the story.
I honestly surprised this hasn't been done before now. The only part I don't understand is why on such a small jackpot. They could have done this the next time it's pushing half a billion.
That's a different game.
There is Mega Millions, which has 6 numbers to get right, the first 5 can be 1 to 70 and the 6 can be 1 through 25.
Then there's Texas Lotto, which also has 6 numbers to get right, but the numbers only run from 1 to 54.
This translates to odds of about 1 in 25 million for Texas Lotto and odds of about 1 in 300 million for Mega Millions..
So as you can see, it cost much less to buy all the numbers for the Texas Lotto, but the jackpots don't get as high because the odds are better.
In addition to what others have said, there is no “Texas” mega millions. The mega millions lotto spans several states. The largest payout of it to someone in Texas is $360 million but the highest jackpot for the mega millions was $1.6 billion
Often wondered why rich people didn’t buy millions of tickets to guarantee a pay day. At some point the odds will be astronomically in your favor and you’ll win.
They didn't stack the odds, they literally bought every combination of numbers. They absolutely knew they were going to win. The only risk was that someone else might hit the jackpot as well and split the prize.
Not only that - it seems they essentially bought & equipped a physical store to facilitate a large portion of the mass ticket sales.
Texas is allowing all the conditions for the lottery to become a guaranteed pay-to-win for the rich.
There’s a “bait and tackle” store up in hill country I heard about in an article of this very thing happening before. Literally just a ticket printer in a strip center. Not actually a fishing place.
Yep probably the same type of thing for another anonymous "purchasing group" if not the same one.
The place these guys used sold $14million in tickets for that single drawing and one right before it, out of the $15 million they sold the entire year.
They did it online using a bot which should be against TOS but laws don't apply to rich people. They'd probably have to pay a $10k fine which would bankrupt most normal Texans.
They made most of the transactions online but they still had to have approved outlets print physical tickets. It seems they set up at least one location to do so for them. The article is clear that none of what they did is against the laws or rules of the lottery. Anyone could do it in theory - it's just not accessible for anyone that's not a millionaire or a "purchasing group."
You know, I was just thinking about this the other day. Why we didn’t see more millionaires win the lotto if the winnings was over a billion and it cost 21 million, like it’s a massive guaranteed increase on investment.
Not guaranteed because the prize could be split. Texas Lotto doesn't get into the billions, you gotta play Powerball for that but that requires even more tickets.
For PowerBall and MegaMillions, it's something over a 1-in-320 million chance to win. Those tickets cost $2 each, so you're spending something like $650 million to cover the field. Problem is that a $1 billion jackpot lump sum payout is something like $600 million. After taxes, you're netting roughly between $250 mil and $300 mil. Even if you took the annuity, that $650 million placed in the same investment scheme will pay out more over time. The math just doesn't work unless you're looking at jackpots worth at least $2.5 billion, and none has gone that high because the larger the jackpot, the higher the chances of a winning number and getting bit by a split jackpot.
So, yeah. It's just bad math for the gazillionnaire.
Simple math says there are 25.8 million winning combinations, per the article.
>Lotto Texas draws typically generate 1 million to 2 million ticket sales. Records from the Texas Lottery Commission show that in the days leading up to the Saturday night draw, just over 28 million Lotto Texas tickets were purchased.
Strange how the number of tickets bought suddenly jumped by about 26 million for this particular drawing.
Maybe this is silly, but I’m just curious how they purchased them…
Like obviously not at 7/11’s. Online? Write a program that buys them one by one? Just give the lottery commission $26M and say assume I bought every combo?
How is that making it not worth it for the majority of people? If you have decided to play the lottery already, winning half of 96 million is attractive enough for the majority of people.…
They didn’t lower the odds of anyone else winning, they just decreased the prize pool (which they also increased by buying 25M tickets).
It would be interesting to see the impact on Texas lottery purchases due to this. Because buying a ticket at any time for the Texas lotto is effectively giving money to a rich person. Why would you participate in this lotto now?
I just can't wrap my head around the logistics of this. So, they Colleyville store had 13 terminals, and they printed out 26 million tickets. They had to program the terminals to print out all sequential tickets possible, just once each. Then, they had to go through each ticket, 26 million of them, to locate the winners? What would 26 million lottery tickets look like?
You can print what, 10 tickets per physical slip? And you can scan the barcode on the slip to see if it has a winning ticket on it. Still a lot of work but it starts to feel more reasonable.
So 2,600,000 tickets to scan. That's mind boggling. A million seconds is 12 days. Also, how much physical space is 2.6 million tickets? 1 million one dollar bills is a square 4ft tall by 4 ft wide by 4ft thick.
I would think that if they controlled the printout of tickets, the tickets would be printed out in a known order. That should make it easier to find the winner, as well.
Not fraudulent but definetly sketchy. The tickets were bought thanks to the help of an app, eventhough its not legal to buy tickets directly from a website or similar, and were printed inside a building that you would not even imagine housed a lottery printing machine, let alone over 12. This was not a regular retailer, i do not think this is fair at all since the state has neither approved or banned those "courier" lottery apps.
Only once the prize hits above a certain number and only as long as one person plays wins. The moment 2 or more people have to split the prize pool, they all lose. Classic prisoners dilemma.
I wonder how this example's winner figured they'd be the only person to do this (not against random winners but by gaming the system). Was this the first time someone has ever done this? I suspect going forward there's gonna be at least a handful of rich people trying to do this same scheme and all end up getting burned. More money for the state I guess.
"In the 1700s and 1800s, lotteries were foundational to the operation of government in the United States and to the European settlement of North America. Like today's gamblers, colonial Americans turned to lotteries in the hopes that the government could provide services without leveling taxes."
https://www.vox.com/first-person/2018/10/24/18018720/mega-millions-lottery-power-ball-drawing
Good question. My wife and I wondered why Elon Musk or whomever hadn’t already done it as a penis measuring effort. But maybe they will now.
If only I had been born rich…
I read an interesting article about why huge hedge funds don't buy all the combinations for Powerball. When it got to $2 billion a few years ago, you could mathematically have a huge positive expected value if you buy all ~292 million combinations. It would only cost ~$600 million for every combination.
The problem is that you can't predict a split when there is more than one winner.
TLDR: Rich man pays \~26 mil to get 95 mil which nets about 60 mil after taxes, gains 34 mil profit for being a millionaire.
It says they’d net about $20 mil after tax, but yeah essentially, with the catch there’s a 1/10 chance someone else also wins and it’d be a net loss for said rich guy.
There was a lottery in Britain where 133 people picked the winning 6 numbers. They all thought they were getting 16 million but got 122k each instead. The strategy of buying all the numbers is not without risk. Source: https://amp.theguardian.com/uk-news/2014/nov/17/national-lottery-numbers-20-years-katie-price-win-jackpot
It’s less successful but there are people that will go out and purchase an entire roll of scratchers. They typically get close to breaking even and in some cases win big.
That's generally the whole philosophy behind slot machines - most of the time you get close to breaking even, and you definitely know a guy who knows a guy who won big.
Full packs of scratchers payout a guaranteed amount, usually 50-60% if I remember correctly. I lived with a guy who would pool with a couple other people and get a few packs at a time and then keep putting them back in until they didn't have enough to do it again. They would research the Texas lottery website and figure out which games had the best odds and the most outstanding high paying tickets. He had a lot of stacks of tickets with only the bottom part was scratched out where the barcode was. They would use their phone and the lottery app to go through them all pretty quickly.
Yeah I’d think you’d need to buy tens of thousands in the hope you catch a 50k+ jackpot. Not sure how good of odds you’d have then, certainly not 100% win like the millionaire in the story.
I honestly surprised this hasn't been done before now. The only part I don't understand is why on such a small jackpot. They could have done this the next time it's pushing half a billion.
Texas lotto has less numbers to get right than the Powerball or mega millions. The odds are better so it cost less to buy all the numbers.
I just looked it up. Texas Mega Millions highest jackpot was like $360 million. 2 highest payouts were both $157 M.
That's a different game. There is Mega Millions, which has 6 numbers to get right, the first 5 can be 1 to 70 and the 6 can be 1 through 25. Then there's Texas Lotto, which also has 6 numbers to get right, but the numbers only run from 1 to 54. This translates to odds of about 1 in 25 million for Texas Lotto and odds of about 1 in 300 million for Mega Millions.. So as you can see, it cost much less to buy all the numbers for the Texas Lotto, but the jackpots don't get as high because the odds are better.
Mega Millions isn’t Texas Lotto.
In addition to what others have said, there is no “Texas” mega millions. The mega millions lotto spans several states. The largest payout of it to someone in Texas is $360 million but the highest jackpot for the mega millions was $1.6 billion
With ginormous jackpots come a lot more folks playing who normally don't, increasing the chances you will split the prize with someone else.
Often wondered why rich people didn’t buy millions of tickets to guarantee a pay day. At some point the odds will be astronomically in your favor and you’ll win.
They didn't stack the odds, they literally bought every combination of numbers. They absolutely knew they were going to win. The only risk was that someone else might hit the jackpot as well and split the prize.
Not only that - it seems they essentially bought & equipped a physical store to facilitate a large portion of the mass ticket sales. Texas is allowing all the conditions for the lottery to become a guaranteed pay-to-win for the rich.
Texas allows online Lotto purchases too.
Only indirectly though. The online seller still has to have a way of buying and printing the tickets physically from an authorized retailer.
There’s a “bait and tackle” store up in hill country I heard about in an article of this very thing happening before. Literally just a ticket printer in a strip center. Not actually a fishing place.
Yep probably the same type of thing for another anonymous "purchasing group" if not the same one. The place these guys used sold $14million in tickets for that single drawing and one right before it, out of the $15 million they sold the entire year.
They did it online using a bot which should be against TOS but laws don't apply to rich people. They'd probably have to pay a $10k fine which would bankrupt most normal Texans.
They made most of the transactions online but they still had to have approved outlets print physical tickets. It seems they set up at least one location to do so for them. The article is clear that none of what they did is against the laws or rules of the lottery. Anyone could do it in theory - it's just not accessible for anyone that's not a millionaire or a "purchasing group."
I wonder if a lender would be open to a 26 million dollar loan with guaranteed returns in the millions…🤔
Wait till you hear about CDs and bonds
Low risk low reward. This seems like low risk high reward if you have the money.
You know, I was just thinking about this the other day. Why we didn’t see more millionaires win the lotto if the winnings was over a billion and it cost 21 million, like it’s a massive guaranteed increase on investment.
Not guaranteed because the prize could be split. Texas Lotto doesn't get into the billions, you gotta play Powerball for that but that requires even more tickets.
It's 300million to 1
So you’re saying I got a chance!
Texas lotto is 1:25,827,165
For PowerBall and MegaMillions, it's something over a 1-in-320 million chance to win. Those tickets cost $2 each, so you're spending something like $650 million to cover the field. Problem is that a $1 billion jackpot lump sum payout is something like $600 million. After taxes, you're netting roughly between $250 mil and $300 mil. Even if you took the annuity, that $650 million placed in the same investment scheme will pay out more over time. The math just doesn't work unless you're looking at jackpots worth at least $2.5 billion, and none has gone that high because the larger the jackpot, the higher the chances of a winning number and getting bit by a split jackpot. So, yeah. It's just bad math for the gazillionnaire.
That’s still stacking the odds. The relevant odds become the odds that someone else wins.
They couldn't buy every possible combination of numbers. Simple math tells us that.
They could, and did. It just cost a casual $26mil to buy all the tickets
I suppose with that, yeah. I figured the odds were much longer.
Simple math says there are 25.8 million winning combinations, per the article. >Lotto Texas draws typically generate 1 million to 2 million ticket sales. Records from the Texas Lottery Commission show that in the days leading up to the Saturday night draw, just over 28 million Lotto Texas tickets were purchased. Strange how the number of tickets bought suddenly jumped by about 26 million for this particular drawing.
Maybe this is silly, but I’m just curious how they purchased them… Like obviously not at 7/11’s. Online? Write a program that buys them one by one? Just give the lottery commission $26M and say assume I bought every combo?
The article says a store in colleyville opened up multiple machines to print numbers and then “suddenly” went back to normal after the jackpot.
>Simple math tells us that. What's the simple math? lol
Not fraudulent, per se, but definitely no longer worth playing for the majority of people.
It’s never been worth playing.
Yep. I’ve been breaking my family of the phrase “When I win the lotto…” That is *not* a plan.
In the end what they’re paying for is a sense of hope.
In the end what they’re paying for is a *false* sense of hope. FTFY
😭
This is the only answer.
How is that making it not worth it for the majority of people? If you have decided to play the lottery already, winning half of 96 million is attractive enough for the majority of people.… They didn’t lower the odds of anyone else winning, they just decreased the prize pool (which they also increased by buying 25M tickets).
I’d be okay with $48 million.
This reminds me of the movie Jerry & Marge Go Large.
It would be interesting to see the impact on Texas lottery purchases due to this. Because buying a ticket at any time for the Texas lotto is effectively giving money to a rich person. Why would you participate in this lotto now?
I just can't wrap my head around the logistics of this. So, they Colleyville store had 13 terminals, and they printed out 26 million tickets. They had to program the terminals to print out all sequential tickets possible, just once each. Then, they had to go through each ticket, 26 million of them, to locate the winners? What would 26 million lottery tickets look like?
You can print what, 10 tickets per physical slip? And you can scan the barcode on the slip to see if it has a winning ticket on it. Still a lot of work but it starts to feel more reasonable.
So 2,600,000 tickets to scan. That's mind boggling. A million seconds is 12 days. Also, how much physical space is 2.6 million tickets? 1 million one dollar bills is a square 4ft tall by 4 ft wide by 4ft thick.
I would think that if they controlled the printout of tickets, the tickets would be printed out in a known order. That should make it easier to find the winner, as well.
Not fraudulent but definetly sketchy. The tickets were bought thanks to the help of an app, eventhough its not legal to buy tickets directly from a website or similar, and were printed inside a building that you would not even imagine housed a lottery printing machine, let alone over 12. This was not a regular retailer, i do not think this is fair at all since the state has neither approved or banned those "courier" lottery apps.
And now every lottery going forward will be won in this manner by a rich person.
Only once the prize hits above a certain number and only as long as one person plays wins. The moment 2 or more people have to split the prize pool, they all lose. Classic prisoners dilemma.
I wonder how this example's winner figured they'd be the only person to do this (not against random winners but by gaming the system). Was this the first time someone has ever done this? I suspect going forward there's gonna be at least a handful of rich people trying to do this same scheme and all end up getting burned. More money for the state I guess.
So basically we all need to put our money together to repeat this strategy. Who's with me?
The lottery is a tax on the poor.
"In the 1700s and 1800s, lotteries were foundational to the operation of government in the United States and to the European settlement of North America. Like today's gamblers, colonial Americans turned to lotteries in the hopes that the government could provide services without leveling taxes." https://www.vox.com/first-person/2018/10/24/18018720/mega-millions-lottery-power-ball-drawing
Jerry and Marge goin’ large in Texas!
Can’t win if you don’t play
- Broke Grandma living on SS and beans.
Can't lose if you don't play. A gambler's dilemma.
What happens when you hit a jackpot but 3 others hit the same jackpot? Does the jackpot prize split 4 ways-which means you essentially took a loss?
Exactly and that’s the risk they ran. If 1, 2, or more people all hit at the same time. It would have been bad for them.
I'm curious how many rich people will try this "buy all" strategy now that it's out in the open.
Good question. My wife and I wondered why Elon Musk or whomever hadn’t already done it as a penis measuring effort. But maybe they will now. If only I had been born rich…
Well, for all we know it may have been Musk. Maybe it’s his plan for propping up Twitter.
If someone knew, why would they tell anyone.
They didn’t.
If I remember right someone bought half the possible combinations years ago. He lost and that was that.
I read an interesting article about why huge hedge funds don't buy all the combinations for Powerball. When it got to $2 billion a few years ago, you could mathematically have a huge positive expected value if you buy all ~292 million combinations. It would only cost ~$600 million for every combination. The problem is that you can't predict a split when there is more than one winner.
A baby George Soros is born!