Fascinating story in Wired about Mohan Srivastava, a geological statistician in Toronto who figured out a way to beat scratch-off lotto tickets. His insight was realizing that computers were programmed to spit out the numbers in, say, a scratch-off tic-tac-toe game and that these numbers couldn't be random because the lotto company needed to control the number of winners. He started looking for numerical aberrations:
As a trained statistician with degrees from MIT and Stanford University, Srivastava was intrigued by the technical problem posed by the lottery ticket. In fact, it reminded him a lot of his day job, which involves consulting for mining and oil companies. A typical assignment for Srivastava goes like this: A mining company has multiple samples from a potential gold mine. Each sample gives a different estimate of the amount of mineral underground. "My job is to make sense of those results," he says. "The numbers might seem random, as if the gold has just been scattered, but they're actually not random at all. There are fundamental geologic forces that created those numbers. If I know the forces, I can decipher the samples. I can figure out how much gold is underground."Srivastava realized that the same logic could be applied to the lottery.
He began spotting patterns on scratchers and taught himself to pick the winners. What's just as amazing to me is what he did next--instead of getting rich, he alerted the lotto company (which was so inept that it ignored him at first).
This story struck a chord because I also figured out how to beat scatchers (to an extent) while working at a liquor store during college, although not nearly as efficiently as Srivastava did and using "math" that was more or less limited to counting the fingers on my hands. The liquor store was in a pretty shady neighborhood that attracted a lot of alcoholics who loved playing scratchers. I think they liked the social aspect of it as much as anything--hanging around the store and bullshitting us as they rubbed off their tickets. Alcoholics are impulse buyers when it comes to scratchers. They'd buy five, scratch them off, and if they didn't win, they'd buy some more. But these were not wealthy individuals. At a dollar a ticket, they could rarely play more than 10. Then they'd mutter, crestfallen, and go collect enough empty cans to buy a 40.