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Old 06-22-2009, 04:21 PM   #1
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Do lottery betting systems work?

Do lotto betting systems work? there's this site, www.helpyouwinthelottery.com that claims to have a system of picking numbers to increase your odds of winnig. Does it work? Have you heread of it? What do you think?
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Old 06-22-2009, 04:49 PM   #2
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Re: Do lottery betting systems work?

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Originally Posted by pavenet1 View Post
Do lotto betting systems work? there's this site, www.helpyouwinthelottery.com that claims to have a system of picking numbers to increase your odds of winnig. Does it work? Have you heread of it? What do you think?
Yep it works, you buy more tickets, which means you have more chances of winning.

Course you return rate is exactly the same.
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Old 06-22-2009, 07:49 PM   #3
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Re: Do lottery betting systems work?

Yes having a lottery betting system most definitely works if you play it right. You set up a system, cleverly advertise it and get people to subscribe. You can make a lot of money that way.

More seriously, a lottery betting system works about as well as a roulette playing system not!

Here is how a lottery works in the simplest of terms. Assume there is only one winner. Each person picks a number between 1 and 100. If they pick the right number, they win. If more than one pick the right number, they share the prize equally. The key element is the prize. Suppose 1000 people buy tickets for $1 each. The maximum prize pool is then $1000. But, expenses have to be subtracted out. Say they are $100. Then the lottery owner (say the state) has to take its share, say another $100. That leaves $800 as the prize pool You, the lottery player, have a 1/100 chance of selecting the right number. But, your share of the prize pool is 1/10 of that since there are 1000 players and each of them has the same chance of getting the right number. So, your EV is

(1/100)* (1/10)*$800 - $1 = -$0.20

Assuming a fair lottery, each dollar removed from the prize pool reduces your EV, which starts out at 0.

There is no system that I can think of that can change that EV. The only smart thing to do in a lottery (except perhaps to not play them) is to choose those that have better payoffs.

One more point. I used to think lotteries were really stupid to play. But, Ive kind of moderated that position and that is because of the concept of utility. The chance to win a million dollars, say, as small as it is, is for many people worth the likely small loss to play each week. But, for many others, playing the lottery may be taking food off the table or needed medicines and then the worth is questionable.
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Old 06-22-2009, 07:54 PM   #4
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Re: Do lottery betting systems work?

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Originally Posted by statmanhal View Post
One more point. I used to think lotteries were really stupid to play. But, Ive kind of moderated that position and that is because of the concept of utility. The chance to win a million dollars, say, as small as it is, is for many people worth the likely small loss to play each week. But, for many others, playing the lottery may be taking food off the table or needed medicines and then the worth is questionable.
Your example only focuses on the cost side of the equation (i.e. it costs poor person more to play than a wealthy person). However, consider the benefit side of the equation. If you make $500K a year, winning a $1,000,000 prize probably won't affect you as much as someone who makes $16K a year.

I suspect that a utility function would be curvilinear such that the middle class would gain the most in utility from playing the lottery.

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Old 06-22-2009, 08:08 PM   #5
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Re: Do lottery betting systems work?

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Your example only focuses on the cost side of the equation (i.e. it costs poor person more to play than a wealthy person). However, consider the benefit side of the equation. If you make $500K a year, winning a $1,000,000 prize probably won't affect you as much as someone who makes $16K a year.

I suspect that a utility function would be curvilinear such that the middle class would gain the most in utility from playing the lottery.

Sherman
I'm surprised by that comment. I specifically was thinking of the poor or middle class person who is more than willing to lose $1 to only gain $0.80 in real money expectation because his utility function is not linear. In other words, I agree 100% with your example, and perhaps was not clear in how I presented the argument.
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Old 06-22-2009, 09:02 PM   #6
 
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Re: Do lottery betting systems work?

Basically, a different way to say what you guys are saying is the lottery is effectively a fairly cruel regressive tax (which it is).

The people that spam silly lottery systems are just taking advantage of the stupid, naive and desperate.

I have nothing against people playing the lottery for fun if they can afford it, but it is really one of the more sinister government sponsored programs that exists (and I am an anti conspiracy type guy). Hard to forget the guy I saw at a store who was buying a few hundred dollars in tickets who claimed that he won some each week. I am sure he did...

I assume the only "system" that would be practical is avoiding common sequences of numbers that many others might choose. I cannot even imagine what methodology the people who sell systems even pretend to use, but then again there are tons of roulette systems being sold, so I guess enough people exist out there who will by that garbage.
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Old 06-22-2009, 10:28 PM   #7
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Re: Do lottery betting systems work?

"The lottery is a tax on people who are bad at Math." ~ Woody Paige as seen on Around the Horn
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Old 06-23-2009, 01:26 AM   #8
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Re: Do lottery betting systems work?

Well, the lottery can have overlays.

One example: (From lottery-group.co.uk)

Quote:
Guaranteed Lottery Wins From History
To our knowledge there is only one known occurrence of somebody guaranteeing a lottery win by purchasing all possible lottery number combinations - and this happened on a May 1992 bank holiday Irish National Lottery. A Polish-Irish businessman and a syndicate team of 28 Dublin based players decided they would purchase every single possible combination on the lottery, and thus guarantee a win on the lottery.

On the Irish National Lottery at that time there were just 36 numbers in the draw and you had to match 6 of these, leaving odds of winning the lottery at 1 in 1,947,792. These lottery tickets each cost just 0.50, meaning that every possible lottery ticket combination could be purchased for 973,896. The jackpot prize on the May 1992 bank holiday lottery draw stood at 1.7 million. This meant that they could guarantee a profit of over 700,000 by purchasing every lottery number combination. This is of course providing that nobody else wins on the lottery draw too.

Despite a last ditch attempt by the lottery organisers to prevent the organised Dublin based syndicate to purchase the tickets, the group went ahead to win the lottery - but they weren't the only ones. Somebody else also won on the draw, and so the jackpot was split. The syndicate still ended up with a slight overall profit though, due to the other prizes for matching 5, 4 and 3 balls on the lottery. However it is certain that due to the time spent organising the whole operation, the overall profits were actually very small and not worth the time spent arranging the scheme.
Also, I remember some time ago that a lottery in the US was hit by a group attempting to purchase every combo. They only managed to buy about 72% if I recall correctly.*

They must have been sweating that drawing out, but they managed to hit and make a nice profit.

At that time you could buy bulk purchases in sequence from the main lottery location (don't know what to call it). After this win they changed the rules---got to buy them one at a time retail.


*All of the above is from memory. For the most part I believe it to be accurate. Google searches have come up empty so far. I seem to recall the drawing being on the east coast. Penn? Ohio? Virginia? Florida?


EDIT: found it

from Betasia.com

Quote:
Syndicate Betting

This is an article by Joe Saumarez Smith that appeared in the February 2001 edition of Business Life, British Airway`s inflight magazine for business class travellers.

AT some point in their lives, most people dream of winning the lottery. But few people go as far as to buy every possible winning combination in a bid to guarantee they will scoop the jackpot.

But whenever there is a huge lottery jackpot anywhere in the world, you can be pretty sure that is exactly what will happen. If the mathematicians and statisticians show the chances of winning a huge payoff is right, then the betting syndicates move in.
Around the world their strategies differ but a common theme is that they find a small shop with a lottery terminal and then buy it from an astonished shopkeeper. They shut the shop to the general public, connect the lottery to their computer and start buying every combination possible. Soon the shop is knee deep in lottery slips as the syndicate tries to cover the 14 million or so potential combinations before the draw. A week later they sell the shop back to the owner at a substantial loss – and leave with a few million in local currency.


If this seems fanciful – or insane – you only have to look at the Australian syndicate led by Stefan Mandel. They managed to keep their existence relatively secret until the syndicate hit the big one, a single ticket which paid $27 million in the 1992 Virginia State Lottery in the USA. It was the fourteenth big lottery win engineered by Mr Mandel and, as it turned out, his last major coup.

Simply explained, his syndicate waited until a lottery anywhere in the world had rolled over its jackpot for weeks on end. When the jackpot was, say, 20 million, but there were only 8 million possible winning combinations, his team would move in and start buying. Mathematically they calculated they could make between 120% and 400% return on their money, depending on the numbers drawn. If a popular series of numbers came out – numbers under 31 are played far more often than numbers over 31 because people choose their friends’ and families’ date of births – they would win less, but they would still be ahead on their investment.


What Mr Mandel had not realised is quite how peeved the Virginian authorities would be. They did not expect their largest ever jackpot to be exported and launched an enquiry. Their investigations found that 35 agents purchased hundreds of thousands of tickets but that even a team that size was unable to cover the 7,059,052 possible combinations of tickets, so that when shortly before midnight on 15 February, 1992, the numbers - 8, 11, 13, 15, 19 and 20 – were drawn, the syndicate were more than mildly concerned that they had bought five million tickets in vain. Fortunately, they had covered enough bases and held the winning ticket.

There the luck pretty much ran out. The taxman stated that a 30% tax on gambling winnings should be imposed, as it was a professionally-orchestrated operation rather than winnings by chance. The CIA, FBI and Internal Revenue Service in the United States, and the Australian Securities Commission, National Crime Authority and the Victoria Police gaming squad all became involved, although no wrongdoing was proved. The members of the syndicate fell out, Mandel fled to his native Romania and in August 1995 was declared bankrupt, with debts in excess of A$500,000.

Not all betting syndicates hit such big jackpots or such bad luck. In the UK I can think of four horseracing syndicates run by mathematicians that make a very good return based on statistical ratings of horses’ probabilities of winning or placing a race. They are not aiming for headline-grabbing returns, merely a 150% to 300% return on their season’s investment. This is not to be sniffed at of course – an initial investment of 500,000 among the syndicate members is fairly average – but it’s a different game from the lottery boys.

The most famous horseracing syndicate worldwide concentrates on the action in Hong Kong. The territory’s punters bet fearsome amounts – they turnover more per race at Sha Tin racecourse than the UK bookies do in a busy week – into the betting pools, which pits punter against punter. With the aid of statistics, the Hong Kong Racing Syndicate makes a fantastic return from picking out good price winners that the public ignores. They particularly like “exotic” bets, where you have to pick the first three horses home in any race for two successive races – bets which can pay huge amounts when unfancied horse make the frame.

Run by a New Zealander based in London, the syndicate has endless problems placing its bets. The Royal Hong Kong Jockey Club is not keen on their action as they think it detracts from others’ enjoyment of the betting opportunities. But despite this, their returns from the initial $25 million HK dollars (2.21 million) over the past two years have been 300% and 150%, with the current season running at 118% after six weeks of operation.

Should you join a betting syndicate? My personal experience is that, run by the right people (ie ridiculously overqualified PhD physicists who should be working on the derivatives desk of an investment bank instead of footling about on the horses), then it’s great. Otherwise, the joys of Treasury bonds may be a better path to early retirement.

Last edited by Sevenfold; 06-23-2009 at 01:34 AM.
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Old 06-23-2009, 02:11 PM   #9
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Re: Do lottery betting systems work?

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Originally Posted by pavenet1 View Post
Do lotto betting systems work? there's this site, www.helpyouwinthelottery.com that claims to have a system of picking numbers to increase your odds of winnig. Does it work? Have you heread of it? What do you think?
I don't know what's out there as far as betting systems go, but as far as improving ones EV in playing these, there are 2 considerations to take into account that I know of to improve ones EV:
  1. Avoiding ties
  2. Prize money rollover
When you tie, you have to share your prize money and this impacts your EV, so you pick seat of numbers not likely to be picked by other people. For example, people like to pick numbers that correspond to dates in a calender, so avoiding numbers 1 thru 31 and especially 1 thru 12 is a reasonable idea. There are other tie avoidance ideas besides this one. You just want to go against the herd one way or another.

When there is no winner in a given drawing, prize money is rolled over into the next jackpot. In theory, if enough money gets rolled over relative to the number of participants, then EV can actually be positive despite the huge "rake." I don't know if this actually pans out in practice. The "rake" is so huge.

BTW, I don't play in these things. Its just seems to be too much of a long shot to be worth my time and effort.
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