Massachusetts State Lottery Embarrassed by MIT Students Scamming Millions
MIT math students have figured out a way to cash in on the Massachusetts Lottery games by forming large well-funded syndicates and buying large batches of tickets in specific games with a strategy that mathematically can't lose. So far they have scammed more than 8 Millions Dollars in jackpots and while the lottery allegedly knew about the scam since 2005, Massachusetts did nothing to prevent it because they were making extra money on the action as well.
The MIT students formed a syndicate and figured out a way to buy blocks of tickets for the Cash WinFall game. Lottery officials discovered their activities in 2005 but stopped it this year according to the official report by State Inspector General Gregory Sullivan. The game was earning the students so much money that they quit their jobs to work on their system full-time. They even managed to bring in outside investors who shared in the profits.
With their numbers system, it took about $100,000 in tickets to guarantee success playing Cash WinFall. Any time the jackpot went over $2 million, group members bought in and shared in the prize money. Usually, if the jackpot in a lottery game isn't won, it gets held over for the next drawing. However Cash WinFall capped the main prize at $2 million and when there was no grand prize winner the jackpot was redistributed to make lesser prizes five or even ten times greater than usual according to the Boston Globe newspaper. Buying $600,000 worth of tickets guaranteed a 15-20% return and within a few years the MIT group had figured out a way to win the whole jackpot in 2010.
In an email discovered by the Boston Globe, one Massachusetts lottery supervisor had asked "How do I become part of the club when I retire?" which shows just how little care for the players some of the lottery officials seemed to have at the time.
"I feel it is important to essentially apologize to the public because a game was created that allowed syndicates to gain special opportunities that others did not have" State Treasurer Steve Grossman told the paper. "Using machines themselves, partnership with lottery agents, using them after hours. We're sorry some gained unfair advantage. Revenues were tremendous and the lottery benefited, but there were practices that were not appropriate and things done that were not right."
Reportedly the officials became aware when the Random Investment Strategies syndicate cashed in 860 of the 983 winning tickets (each valued at $600 or more) during a single lottery drawing. Stay informed about all of the lottery news that keeps your gaming time safe from scam artists and shoddy lottery officiating by reading Lotto 365 every day.