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Comment by kubectl_h | Hacker News Reader

> “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.

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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.

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...

If normal lottery ticket buyers knew this sort of thing was going on, they'd likely stop buying tickets.

I mean the near-impossible odds weren't enough to dissuade them, I doubt some more statistics will do it.

When it stops being statistics they notice.

It didn't stop. What are you referring to?

Pay to win with 100% success rate.

Many people care less about the odds and more about feeling that things are fair, that they are the same for everyone.

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.

It is not an inevitability that a lottery system will be rigged to effectively guarantee a wealthy group gets the jackpot and profits.

I didn't say it was rigged, I said it wasn't fair.

>> I know "fairness" is a virtue we teach to children, but honestly there is nothing fair about any part of life

My parents did not teach me that fairness was a virtue. They taught me that "life's not fair". With the unspoken addendum of "deal with it".

I guess I won the lottery in that respect.

tickets are still same for everyone

it's just that optimum stopped being "zero tickets bought" and instead shifted to "all tickets bought"

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?

It doesn't matter if it's actually unfair or not. What matters is if it feels unfair.

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.

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.

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.

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.

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.

Good on them.

Bingo.

This is the literal answer to "why." Also bans on various casino hacks.

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.

Just make the maximum jackpot payout $25.7 million per draw. Any remaining money in the jackpot remains for the next draws.

I don't think that it's very likely that many lottery ticket buyers would find out, or that they'd all stop even if they did. The Illinois state lottery is still selling tickets even though they've refused to pay winners https://www.illinoispolicy.org/illinois-sitting-on-upward-of...

It kindof beats the original purpose of lottery, chance.

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.

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

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.

Retail punters means casual bettors, non-professionals.

They feel it's "unfair" to allow others to make 100% certain arbitrage bets.

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.

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?

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.

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?

It's not really helping those poor people when those same lotteries are then bought by large corporations for profit.

You're right, but it's also not helping them either way. There was never any help to be had.

Poor people bought tickets in the illegal numbers racket (https://en.wikipedia.org/wiki/Numbers_game) before state lotteries existed.

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