Why break the lotto in the first place?
Lehrer notes that the range and scope of the lotto as a business is surprisingly large:
"Lotteries were used to fund the American colonies and helped bankroll the young nation. In the 18th and 19th centuries, lotteries funded the expansion of Harvard and Yale and allowed the construction of railroads across the continent. Since 1964, when New Hampshire introduced the first modern state lottery, governments have come to rely on gaming revenue....In some states, the lottery accounts for more than 5 percent of education funding."Easier than casinos
In contrast to Las Vegas, which has tightened the screws on the methods people use stack the odds in their favor--card-counting, for example--Lehrer paints the world of the lotto as vulnerable to being 'gamed.' Scratchers are made by outside companies that use computer formulas--not truly random numbers--to determine winners. "The game can’t be truly random. Instead, it has to generate the illusion of randomness while actually being carefully determined,” Lehrer quotes Srivastava, talking about part of the process he used to figure out the system.
How Srivastava did it:
"The trick itself is ridiculously simple. (Srivastava would later teach it to his 8-year-old daughter.) Each ticket contained eight tic-tac-toe boards, and each space on those boards—72 in all—contained an exposed number from 1 to 39. As a result, some of these numbers were repeated multiple times. Perhaps the number 17 was repeated three times, and the number 38 was repeated twice. And a few numbers appeared only once on the entire card. Srivastava's startling insight was that he could separate the winning tickets from the losing tickets by looking at the number of times each of the digits occurred on the tic-tac-toe boards. In other words, he didn't look at the ticket as a sequence of 72 random digits. Instead, he categorized each number according to its frequency, counting how many times a given number showed up on a given ticket. 'The numbers themselves couldn't have been more meaningless,' he says. 'But whether or not they were repeated told me nearly everything I needed to know." Srivastava was looking for singletons, numbers that appear only a single time on the visible tic-tac-toe boards. He realized that the singletons were almost always repeated under the latex coating. If three singletons appeared in a row on one of the eight boards, that ticket was probably a winner."
"The next day, on his way into work, he stopped at the gas station and bought a few more tickets. Sure enough, all of these tickets contained the telltale pattern. The day after that he picked up even more tickets from different stores. These were also breakable. After analyzing his results, Srivastava realized that the singleton trick worked about 90 percent of the time, allowing him to pick the winning tickets before they were scratched."The gaming authorities were pretty slow to get with the program
[Wired has a helpful visual guide.]
"When I contacted the North American Association of State and Provincial Lotteries," Lehrer writes, "their security experts couldn’t recall having heard of Mohan Srivastava or the broken Ontario games. This is one of the largest trade associations of lotteries in the world, and it had no recollection that at least a few of its games had been proven to be fatally flawed." Lehrer also tells of how Srivastava only was able to get the attention of the Ontario Lottery and Gaming Corporation by sending them 20 unscratched tickets that he had pre-sorted into winning and losing piles. 19 out of the 20 scratchers he sent them were correctly predicted they found, and only then did he receive a call back.
Are other people quietly gaming the system?
Lehrer reports that employing the lotto to launder money instead of making it is an old mob trick. But you still need winning tickets, which would return a higher investment to would-be launderers if the system were game-able. "The problem for the criminals, of course, is that unless cracked, most lotteries return only about 53 cents on the dollar, which means that they’d be forfeiting a significant share of their earnings. But what if criminals aren’t playing the lottery straight? What if they have a method that, like Srivastava’s frequency-of-occurrence trick, can dramatically increase the odds of winning? As Srivastava notes, if organized crime had a system that could identify winning tickets more than 65 percent of the time, then the state-run lottery could be turned into a profitable form of money laundering," Lehrer writes.
Maybe that's why we always lose
Lehrer ends the article by saying. "Maybe we never win because someone else has broken the game."