Wednesday, February 2, 2011

Gaming the Game

Jonah Lehrer has posted a fascinating piece in Wired on Canadian, Mohan Srivastava. Srivastava, an MIT and Stanford schooled statistician, became intrigued after receiving some Tic-Tac-Toe scratchoff lottery tickets as a gift. While most of us would've shucked off the latex layer without thinking twice, Mohan looked at the tickets and pondered how they were created. How could rolls and rolls of tickets be printed so that they appear to be completely randomized without being random?

Thoughts of cracking the game filled his head, and passing a petrol station without stopping to pick up a few more tickets became impossible. The game was calling him. After a short period- a few hours- of studying the tickets Srivastava was convinced he had it. Best of all it didn't require a single scratch of the ticket, and it was simple enough to teach his 8 year-old daughter. Impossible. He was dumbfounded that a multi-billion dollar industry could put out a game that was so flawed, but there it was true. He had cracked it with 90%+accuracy.

What he had discovered was that the frequency and disbursement had everything to do with it. The first step was calculating how often the numbers in the tic-tac-toe grids appeared on the card. By figuring out if the game had lines consisting of numbers that only appeared once on the card, or "singletons", he could find out if the ticket was winner or loser (see graphic). It seemed simple- too simple.

Empowered with this information one could create a world of mischief. A job at a convenience store could yield tremendous opportunity to graft the system, as winners could be cherry-picked and losers could be sold to an unsuspecting public. Tickets could also be bought in bulk with unused ones returned for credit. Despite the allure of a life on the shady side Mohan thought it best to report the flaw to the lottery board. His first calls were dismissed- perhaps the lottery gets many calls stating that games have been cracked- however, Srivastava was dedicated and pushed the issue further.

He bought 20 tickets and sorted them into a losing pile and a winning pile. The piles were placed into envelopes and mailed to a member of the lottery security council with a letter stating that one pile was winners and the others losers, and that perhaps the lottery should reevaluate the use of the ticket. Within two hours he had received a call back, and within 24 hours the game was pulled from market. He was right on 19 of the 20 tickets.

What the article highlights at the end is the speckled history the lottery has in regards to suspicious winnings, and the thought that organized crime syndicates have been using lottery winnings to launder ill gotten money. The thought that scratch games could be cracked could make this type of scenario all too easy.

Furthermore, the Massachusetts lottery has a history of dispensing large payouts to suspected criminals, at least in one Mass Millions game. In 1991, James “Whitey” Bulger, a notorious South Boston mob boss currently on the FBI’s 10 Most Wanted Fugitives list—he’s thought to be the inspiration for the Frank Costello character in The Departed—and three others cashed in a winning lottery ticket worth $14.3 million. He collected more than $350,000 before his indictment.

At the time, authorities thought Bulger was using the lottery to launder money: take illicit profits, buy a share in a winning lottery ticket, redeem it, and end up with clean cash. In this respect, the lottery system seems purpose-built for organized crime, says Michael Plichta, unit chief of the FBI’s organized crime section. “When I was working in Puerto Rico, I watched all these criminals use traditional lottery games to clean their money,” he remembers. “You’d bring these drug guys in, and you’d ask them where their income came from, how they could afford their mansion even though they didn’t have a job, and they’d produce all these winning lottery tickets. That’s when I began to realize that they were using the games to launder cash.”


Cracking the Scratch Lottery Code by Jonah Lehrer (long read but worthwhile)

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