A statistician cracks the lottery – but it’s not worth plundering

There’s quite a bit of buzz about Mohan Srivastava, featured in Cracking the Scratch Lottery Code in Wired.

Intriguing aspects of cracking the lottery code

  1. Srivastava wasn’t interested in winning the lottery – he was intrigued by the statistical aspects of setting up the scratch cards so that the government still makes money.
  2. Plundering the lottery at 45 seconds per card didn’t pay as well as consulting. And he preferred his work as a statistician. Score one for education!
  3. He said it wasn’t that hard! (Score another one for education)
  4. His work uncovered the psychological aspect of scratch lottery card design. In addition to manipulating the pay-out so that the government always makes a profit (which everyone knows about), he discovered that the cards are designed with several psychological principles in mind:
    • Intricate layout, so that a person has to work with the scratched off numbers to “discover” whether the ticket wins or loses – with resulting high levels of involvement and excitement
    • The appearance of “near misses” on the part of the card that is showing, hinting that the unrevealed parts might be “lucky” too
    • Algorithms that generate many more small pay-outs (wins) than random, and fewer large pay-outs, so that lots of people get the thrill of “winning” and the urge to buy more tickets.
  5. There was no discussion of gambling addiction anywhere in the article. Yet the design of the algorithms and the tickets are clearly designed to draw people into more and more purchases.  Srivastava describes his own small thrill at finding himself a winner – and he certainly developed his own form of heavy involvement with the lottery after a single exposure.
  6. The morality of the lottery system is unquestioned. Some statisticians claim that the psychological aspects get in the way of using a more random method of generating scratch cards. Wired points out that this $70 billion business preys on the least educated – and poorest – members of society. They even think that the lottery is a good wealth producing scheme.

“On average, households that make less than $12,400 a year spend 5 percent of their income on lotteries.”

This is a story that I would like to see widely disseminated and correctly reported. Regardless of their level of education, people don’t like rigged games.  Perhaps a story that features the biased odds and psychological tricks to sucker them into more purchases will wake folks up.

I hope the folks at Gamblers Anonymous are ready for an influx of new members.

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