On one level, I love this story, for it confirms what I have been arguing for over a decade. State lotteries represent an unethical capitulation of governments to laziness, cowardice and greed, as they choose emulate casinos to entice the poor, desperate and stupid to give away their money rather than do their duty and make hard political choices about taxes. The inherent corruption this engenders was beautifully demonstrated by the lottery scandal recently revealed in Massachusetts.
A group of science and math whizzes, many of whom had MIT credentials, formed a gambling syndicate to beat the lottery, and did, generating almost $8 million in winnings after exploiting a flaw in the lottery rules to execute a system that virtually guaranteed profit. Their domination of the lottery continued over seven years, and was known about by lottery officials, who did nothing. Why? Because the money was coming in, and they didn’t understand that they were facing a net loss.
The system required a massive investment of $40 million dollars over the seven years to win $48 million. Obviously, this is beyond the resources of the typical wino who buys tickets at the 7-11, the typical prey of these state-endorsed and despicable scams. You can read the whole amazing story here and here.
Let’s tote up the ethical breaches on display in the Bay State:
1. The state was incompetent, designing a lottery for the purpose of raising revenue for important public purposes like education, and doing so badly, so that it was not what a lottery is supposed to be—gambling. Instead, it was a money tree for anyone smart enough to figure out the secret.
2. The lottery was even more unfair than other lotteries. Other lotteries exploit the stupid and poor to take their money; this one did that, and then gave the money to the rich and well-educated.
3. Massachusetts was dishonest. For seven years it continued to advertise its lottery as a fair game in which all players had an equal chance of winning, when it knew that MIT sharpies were monopolizing the winnings with computer programs and millions of dollars to invest.
4. The state was incompetent, indeed, stupid, losing $8 million dollars by not bothering to fix the loophole in its rules that allowed the MIT syndicate to turn its revenue stream into a private cash cow.
Meanwhile, should we heap disdain and condemnation on the syndicate itself? I certainly won’t. It played by the rules, and won by the rules, just like card counters were playing fair and square when they cleaned up at blackjack tables before the casinos made it cheating to have a good memory. One can’t say that the gambling geeks didn’t adhere to the spirit of the game, when the spirit of state lotteries is “give us money you can’t afford to lose in a desperate hope that you’ll win an obscene jackpot composed of the money pissed away by other gullible people that you will almost certainly blow through like potato chips for the same reason you’re playing the lottery in the first place—you’re dumb.”
The state has no right to con its citizens. The syndicate earned its money honorably, unlike Massachusetts and the other states that use exploitation and desperation to make lotteries do the work its lawmakers are too cowardly to do.
Pointer: Ann Althouse
Facts: Daily Mail
Source: Boston Globe
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