In America, lotteries are as old as history. It was a lottery that provided the much needed funds for everything from the establishment of the colonies to railroad construction and for universities such as Yale and Harvard. In fact, currently 5% of the money used for state education comes from lottery revenue earned by the government. The first modern state lottery was introduced in New Hampshire in 1964. Currently there are 43 counties in the US that have their own lottery and the industry is worth $70 billion every year.
Now moving on to a closer examination of the American lottery buyer and the kind of lotteries that are in vogue, it seems that 20% of the total population is responsible for the entire sales figures of lotteries in America, most of them from the lower economic classes. Spending on lotteries from this income bracket is in the range of 5% of the income.
Baited Hooks in Lotteries
In their quest to engage greater numbers of people in lotteries, the designers of these lotteries use all kinds of formats to increase the involvement of their customers. An ‘extended play’ strategy is one that uses some form of interaction to line up the customer. These are colloquially refereed to as ‘baited hooks.’ One of the most popular baited hooks is the use of scratch games. Instead of letting the customer off the hook immediately after scratching off the latex coating on the lottery, they require the buyer to match the numbers revealed after scratching with those printed in a grid on the lottery.
One such state-run lottery featured a tic-tac-toe game where the numbers under the latex had to be compared with grids. If the same numbers that were revealed by scratching were in a straight line on the printed grid, you had just won the Ontario State Lottery. Well, Mohan Srivastava cracked the Ontario State Lottery and found a way to guarantee winning. Then he did the most peculiar thing, he confessed.
Meet Mohan Srivastava
In 2003, Mohan Srivastava, a geological statistician found a few lottery tickets. He won $3 which was a paltry sum but it got him thinking about how, if the tickets were (obviously) mass produced, there might be some way to figure out the algorithm used by the computer to print the lotteries. There had to be some algorithm that generated the random numbers printed on the lottery and it was this that he sought. The fact that his day job involved heavy math and number crunching made it easy for him to crack the lottery’s system.
It was simple as pie, all one needed to do was record the number of times or frequency of occurrence of the numbers printed on the lottery. This is what he found, that if you looked for the numbers that only appeared once on the printed grid, these were invariably to be found under the latex coating to be scratched off. If three of these once-appearing numbers were spotted printed in a row, you had yourself a winning lottery ticket.
Pretty soon, once he had done the math and a few trial runs, Mohan figured out that if he went buying lotteries from store to store and spent an average of 45 seconds scratching them, he would make around $600 every day. Trouble was, he made more than that as a consultant in his regular job. So he simply went to speak to a member of the Ontario Lottery and Gaming Corporation’s security team. They refused to believe him.
What he did next sure made them sit up and notice him, he sent them 20 tickets sorted into winners and non-winners without scratching them. In two hours, he got a call from the same member of the security team who refused to believe him. In just a day, they stopped that particular lottery.
Meanwhile, Srivastava found similar flaws in other American and Canadian state-run lotteries. The lottery agencies, however, are not too worried about the rest of their lotteries. Mainly because earning from a system that cracks lotteries requires a lot of running around and this problem of scale defies most attempts. You need a success rate of over 63% with any system to break even.