[jacques_chester]

State-owned lotteries transfer wealth from one group of people to another group without any coercion. I don't see why private individuals can't participate in the transfers also.

More generally, this is an example of how simple changes (the rolldown) can have surprising consequences. TBQH I'm surprised the lottery operators aren't just keeping the surplus funds rather than doing a "roll down".

[JoachimSchipper]

Apparently, this particular lottery was created to pay out a bigger percentage of revenue than other lotteries. That is not entirely a bad idea: if people are going to gamble, it's better that they don't lose too much money.

This particular scheme pays out most of the money to a select few, though, which defeats the point.

[jacques_chester]

> This particular scheme pays out most of the money to a select few, though, which defeats the point.

Does it? To me the only point of a lottery is for the operator to make a predictable profit; that predictability is why governments like them so much.

Who wins the jackpot is pretty close to irrelevant.

[derleth]

Wait for the political fallout when the people funding the jackpots realize all their money is going to out-of-staters and they have no chance of winning anything, ever.

(Yes, I'm pretty sure that's how this will be reported in local media.)

[mhb]

The Boston Globe isn't local?

[derleth]

Good question. When I say 'local', I mean the Deming Headlight and the Havre Daily News. You know, all the papers nobody outside a hundred mile radius of the town cares about. The Boston Globe is up there with the LA Times and the Washington Post and so on and so forth, in the national, if not global, ranks.

[joezydeco]

It makes a lot more sense to just run the Lottery as a raffle (pick one serial number from all tickets sold, or have a fixed amount of sellable tickets), but you can see how states are more enticed by the idea of open-ended ticket sales.

Illinois actually has true raffles a few times a year and they have always sold out before the drawing date.

[justincormack]

They usually have to publish a payout rate, it is a common requirement for most forms of pure chance gambling. If people dont win you need some form of rollup. However if you keep it purely on the single big win it does not lead to schemes like this.

[alanfalcon]

Plus when you fund larger and larger jackpots (by keeping the rollup purely on the single big win) you get more and more people buying more and more tickets.

I think Massachusetts would be likely to earn more money by being able to advertise a much, much larger jackpot and losing these "rollup day" "gamblers" (when your mathematical theoretical return is so far above 100%, I hesitate to call it gambling) but apparently they have some incentive to keep things the way they are (do lottery officials have relatives or buddies who are among those gaming the system?) because they've let this go on so long.

[fvryan]

This is just one of many games in MA. There are other Major Jackpot games with huge payouts.

[jacques_chester]

Is the published payout rate based on calculated odds or on the historical payouts made?

[markmarknewyork]

According to the calculation by Hao Li in 2006 (should be at MSU that time) (see Hao Li's article at http://www.jofamericanscience.org/journals/am-sci/0201/06-li...):

By knowing the total tickets Ntt each time, Pjh can be estimated easily: Pjh=1-(1-P6) Ntt Lottery P6 is the probability of matching 6 numbers. In the case of the WINFall lottery, P6=1/13,983,816. The total tickets Ntt each time can be estimated by its samples and their probabilities. The WINFall lottery has 4 samples, matching 6 numbers N6, matching 5 N5, matching 4 N4 and matching 3 N3 respectively. N3 is the largest sample of the WINFall lottery. As far as we have four samples in hand: N6 N5 N4 and N3, we use N3 to calculate the total tickets. Because the more sample are there, the small differences we have (Statistics Accuracy). The Ntt is: Ntt=N3/P3 P3 is the probability of matching 3 numbers. In the case of lottery WINFall, P3=1/57.

To win is really practical.

However, government should make more money than buyers even following the abave rule.