The Scheme That Broke the Texas Lottery
49 points
12 days ago
| 6 comments
| newyorker.com
| HN
rdtsc
12 days ago
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> (The Houston Chronicle eventually reported that a London-based gambling syndicate had bankrolled the operation.)

> Two years later, it has become a full-blown scandal. The Texas Rangers have been called in to investigate what Dan Patrick, Texas’s lieutenant governor, has called “the biggest theft from the people of Texas in the history of Texas.”

Someone from London is robbing our taxpayers, that's not allowed. Only we should be able to rob them!

It's always interesting to read how some of these lotteries are sponsoring "math education". They officially acknowledge it's a tax on math illiteracy.

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conductr
12 days ago
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I’m Texan and can say these politicians are scum. They find blame anywhere but internally. It’s all very hand wavy clown club manufactured outrage type of rhetoric.

The fact is the lottery designed a game that allowed this completely legal and compliant “scam” to take place. They need to scrutinize their internal game making math literacy before they blame people for spotting and profiting from their mistakes.

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lukas099
11 days ago
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Is there any value to state lottoes as a containment strategy? Like, letting people gamble via legal, approved channels weakening the black market and therefore the mob?
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rdtsc
11 days ago
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I can see that as long as 100% of the profit goes to the education or other social causes.

It's also telling how they advertise it: "you might have fun", "you'll get lucky", showing pictures of winners on TV and etc. They never following it up with a matching info about how people are fooling themselves and throwing their money away. Sometimes there is a blurb hidden in fine print "have problems gambling, call such and such a number" but that's always the fine print not the main message.

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xnorswap
12 days ago
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> This idea [buying all combinations] struck Nettles as immensely unfair.

I don't understand why it's seen as unfair, seems like fair game to me?

Edit: Reading further on, it seems this story is more about a person unhealthily obsessed by the Texas lottery than the lottery itself:

> In 2014, Nettles told the Texas Tribune that she was spending fourteen to sixteen hours a day keeping tabs on the lottery.

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mitchdoogle
12 days ago
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It's unfair because they didn't buy tickets the way normal people do. Lottery machines are supposed to be in regular places of business, like gas stations or grocery stores. Companies called couriers popped up years ago that skirt this requirement by having a token storefront, while their real business is selling lottery tickets on the Internet, connected to physical tickets they print in their store. Secondly, the courier the buying group used requested additional ticket printing machines in the weeks leading up to the drawing, an unusual request that seemingly was not scrutinized at all by the TX lottery commission. So not only did the buying group have to use a method to buy tickets that already is unfair (and goes against the spirit of lottery requirements that tickets must be sold out of normal stores), they had to conspire with a courier to get enough machines to print out all the tickets in time. I think it should be obvious this kind of process is not available to the vast majority of Texans, even those with the financial means to do it, so yes - it is unfair.
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pbhjpbhj
12 days ago
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A lottery you have to buy tickets for is unfair, it's not available to all [Texans] in the same way. Seems they just extended/exploited that inherent unfairness.

Lotteries effectively exploit those with little hope and similarly restricted means.

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insane_dreamer
12 days ago
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AFAIK they didn't break any of the lottery rules, and anyone could theoretically have done the same. So no, it wasn't unfair any more than it's unfair that someone else has millions of dollars to buy lottery tickets with and I don't.

The problem lies with the TX lottery commission who draw up and enforce the rules.

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kubectl_h
12 days ago
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Another article on this: https://archive.ph/DOCG0

Personally I think it's fair if you buy the tickets the way any random person might try to buy all the combinations, which would be to pay people to go buy combinations at gas stations.

But that's not how this worked in this case:

> The Texas Lottery Commission helped in several ways behind the scenes. Prior to the draw, it filled rush orders from the retailers requesting dozens of extra terminals — even though three had sold few, if any tickets in the previous months.

>The agency also did not challenge organizers’ method of rapidly entering millions of ticket orders into state terminals. Their use of personal iPads and preprogrammed QR codes appeared to skirt lottery regulations.

If the lotto commission is fine with groups purchasing the lottery, they should make the mechanism for purchasing the lottery equally available to everyone.

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seltzered_
12 days ago
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There's a number of stories like this, notably this reminded me of the Press your Luck Scandal where Michael Larson obsessively recorded and watched a games how to find patterns: https://en.m.wikipedia.org/wiki/Press_Your_Luck_scandal
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shkkmo
12 days ago
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Far more people than Nettles think this was unfair and there were definitely laws broken and skirted. That is why there is a scandal.

> In the aftermath of the 2023 bulk buy, Texas politicians put much of the blame on the couriers. The couriers, for their part, have argued that they’re being scapegoated to deflect attention away from broader issues within the Texas Lottery Commission. In any event, the freewheeling atmosphere in Texas seems to have attracted businesses with questionable pedigrees. Lottery.com, which ended up managing the on-the-ground logistics for the 2023 lottery plan, relocated from California to Texas in 2017.

> Lottery.com seems to have struggled, initially. One potential investor, who visited the Lottery.com’s offices in Austin, told Bloomberg Tax, “I said, this isn’t a corporate office; this is a failed 7-Eleven with three goddamn machines.” In 2022, an investigation found that the company had sold more than half a million tickets to out-of-state players, which is illegal. Three top executives left the company. Two of them, Ryan Dickinson and Matt Clemenson, have since pleaded guilty to separate securities-fraud charges. That same year, the company stopped selling lottery tickets, its license as a lottery retailer in Texas was suspended, and its app was removed from the Apple and Google stores.

Texas law prohibits sales to out-of-state players. Do you really not see how a foriegn backer using a sketchy third party and sketchy techniques to purchase tickets and make profit off Texans who play for fun is clearly unfair?

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brookst
12 days ago
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I mean Texas could pass a law that nobody whose name starts with M can play, but I don’t see how someone with that affliction managing to procure tickets would be unfair.
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shkkmo
11 days ago
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Are you making a point or just a random comment with no purpose?
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brookst
10 days ago
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The claim was that the remote purchase was unfair because there was a law against it.
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shkkmo
9 days ago
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It is a valid claim, I still fail to see what point you are making? You seem to think that breakkng the rules isn't cheating and that making up a random and unrelated stupid rule somehow makes that point?

That's my best guess and it isn't very flattering so perhaps you should try making your point more directly.

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brookst
7 days ago
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Ok, very direct: just because something is illegal does not mean it is unfair, and you can test this by hypothesizing what else could be made illegal but which would not change the fairness of the process.

It’s true that that concept being hard to process is not very flattering.

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shkkmo
4 days ago
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When you break the rules of a game in a way that can impact the outcome of the game, that is called "cheating" and is most definitely not fair.

If you're trying to argue for a concept, you'll be much more effective if you lay it out initially rather than starting the way that you did.

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fragmede
12 days ago
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Ah yes, the lottery, a notorious game requiring a large amount of skill to play, and isn't a tax on the math illiterate.
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shkkmo
12 days ago
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> a notorious game requiring a large amount of skill to play, and isn't a tax on the math illiterate.

Nobody but you mentioned skill. Plenty of mathematically literate people play the lottery for fun, knowing the the expected value is a loss. I personally oppose these types of state operated lotteries as regressive forms of taxation, but if they exist, they shouldn't serve the purpose of allowing capital (especially foreign capital) to extract even more money from citizens.

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soneil
6 days ago
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We had an issue like this with a small office lottery at work.

So our "setup" was simple. Our national lottery has a 'bonus ball' mechanism. Each participant in the office lottery bought a number. If this week's bonus ball is your number, you win the pot. If no-one wins, the pot rolls over.

The issue we hit was people joining mid-roll. Say we have 10 players, rolled over 9 weeks putting $90 in the pot. On week 10, a new player joins, $11 joins the pot, and the new player wins $101 for their $1 in. This is legally fair, but everyone with $10 in the pot feels robbed by the $1 newbie.

We took the easy out and only accepted new members during a 'fresh' pot - which isn't practical for a state lottery.

But it shows the difference between legal fairness and perceived fairness. Someone being able to buy every combination is game-breaking - who would play a lottery where millionaires are guaranteed to win? But roll-overs twist the math until it pays off, and now everyone who's entered in the previous weeks is unwillingly playing a lottery where millionaires are guaranteed to win.

It's not impossible to fix either - if you want to fix it. Cap wins at $x and return the remainder to the pot; keep the maximum prize far under the point where buying combinations pays off, and you can keep offering that maximum prize until the roll-over is exhausted.

But if you're the one making a profit from the lottery, you don't want to fix it. Massive jackpots are a feature - they encourage more participants, more spending, more profit.

And it does seem unfair to protect a mechanism that's so easily exploited, just because it attracts more people to be exploited. And it really can't be good for the long-term health of the game, if people know that roll-overs will be exploited.

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add-sub-mul-div
12 days ago
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This one is paywalled but when I read about it earlier, the problem was that the Texas officials had allowed these people to break the rules of the lottery in order to implement the scheme. So they were given an edge over people who were following the rules.
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canyp
12 days ago
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When I read the title, I thought this was about the Scheme programming language, and how maybe a bug in the garbage collector or something may have broken the lottery.

Damn, I need to get out more, guys.

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patrickmay
12 days ago
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I would like to read the article you describe.
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NaOH
11 days ago
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Related:

Texas Lottery Director Resigns Amid Scrutiny of Rigged 2023 Draw - https://news.ycombinator.com/item?id=43787172 - April 2025 (3 comments)

Texas Officials Invited the Rigging of the State Lottery - https://news.ycombinator.com/item?id=43743053 - April 2025 (18 comment)

A Secretive Gambler Called 'The Joker' Took Down the Texas Lottery - https://news.ycombinator.com/item?id=43670402 - April 2025 (12 comments)

There Was a Texas Lottery Arbitrage - https://news.ycombinator.com/item?id=43269846 - Mar 2025 (273 comments)

Did someone win a $95M Texas Lottery jackpot by stacking the odds? - https://news.ycombinator.com/item?id=40135732 - April 2024 (3 comments)

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mitchbob
12 days ago
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mistrial9
12 days ago
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> gamblers are mystics at heart

this is deeply offensive, to mystics!

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rtaylorgarlock
12 days ago
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After spending a few days in Vegas recently, I can confirm whoever thinks "gamblers are mystics at heart" only knows either a tiny bit about gambling or mysticism, but not both
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