So from what I gather, it wasn't outright rigged, it was just not well designed in terms of the ticket combinatorics and jackpot which made it exploitable to anyone with enough resources to buy up all the tickets, in combination with some fast and loose deals that enabled the logistics of buying every ticket but so far as is apparent no one was outright bribed or breaking a rule. They just weren't questioning things which weren't in their interest to question.
I'm not sure I see the problem here. Any normal person who bought a ticket still had the same chance if winning, and the cartel that bought all the numbers still had the risk that other ticket buyers had bought the same numbers and they would have to split the jackpot.
Lottery payouts are structured to ensure the state always comes out ahead. The state takes its share off the top, presumably along with the vendor fees; the jackpot is what's left over. It's not stated plainly, but the article does mention it:
> The Texas Lottery Commission heralded the win, the third largest in state history, which helped raise around $50 million for the state’s public schools out of $138 million in sales over the life of the jackpot run.
That doesn't quite add up as the the jackpot was $95 million ($138 - $50 == $88), so perhaps the article overstates the net revenue or got some numbers wrong?
To the extent anyone lost something concrete, it was those Texans who play the lottery; their expected payout was smaller than it might otherwise have been as they were guaranteed to have to split the pot with the syndicate. OTOH, strictly speaking the syndicate also took a commensurate risk. If 3 or possibly even 2 other players had also won, they would have lost money.
But there's also the loss of confidence and injury to people's sense of fairness, where mathematical odds are only one part of the fuzzy equation. The Texas Lottery organizers thought they were doing right by the state. The more tickets sold, the more money in net revenue. But maybe they should have considered more the long-term implications to the lottery's image and stable revenue streams. Though, at the end of the day perhaps they still made the right decision as fiduciaries, notwithstanding some of them seem to have lost their jobs in the process. In similar cases in other states (usually involving scratch offs?), lotteries knew for years about net-positive schemes, but kept the odds structures as they brought in greater revenue (e.g. attracting interest from savvy players outside the state) regardless. Because the vast majority of players don't respond perfectly elastically to expected odds, especially when they're not a fixed function (e.g. they don't consider things like jackpot sharing), it's arguably a legitimate approach to increase revenue, at least until the schemes become well known.
Step back from "legal" and think about what most people expect the lottery to be: Regular people buying somewhere between 1-100 (maybe, if in a big work pool or something) tickets to try to win a low-chance lottery.
Further, as I read it, the cartel bought all combinations of numbers, so there was no risk for them.
Ask yourself if you think this is something that should happen every time the jackpot goes above $25,000,000 - or if the lottery could survive with people knowing this was happening.
It clearly is against the spirit of the game, and any competent lotto administrator would see the red flags in facilitating it.
It cuts everyone else's EV in half if they'd have to split the money two ways in the event of a win. It wouldn't be a problem if the enterprising party hadn't been given an edge that's not available to other players.
Imagine winning the lottery and finding out that you only get half the jackpot because Texas officials broke the rules for and facilitated some corporation getting an assured win.
So from what I gather, it wasn't outright rigged, it was just not well designed in terms of the ticket combinatorics and jackpot which made it exploitable to anyone with enough resources to buy up all the tickets, in combination with some fast and loose deals that enabled the logistics of buying every ticket but so far as is apparent no one was outright bribed or breaking a rule. They just weren't questioning things which weren't in their interest to question.
I'm not sure I see the problem here. Any normal person who bought a ticket still had the same chance if winning, and the cartel that bought all the numbers still had the risk that other ticket buyers had bought the same numbers and they would have to split the jackpot.
If the expected return is positive then it would be negative for the organizers. I don't understand how is buying tickets in mass would make sense.
Lottery payouts are structured to ensure the state always comes out ahead. The state takes its share off the top, presumably along with the vendor fees; the jackpot is what's left over. It's not stated plainly, but the article does mention it:
> The Texas Lottery Commission heralded the win, the third largest in state history, which helped raise around $50 million for the state’s public schools out of $138 million in sales over the life of the jackpot run.
That doesn't quite add up as the the jackpot was $95 million ($138 - $50 == $88), so perhaps the article overstates the net revenue or got some numbers wrong?
To the extent anyone lost something concrete, it was those Texans who play the lottery; their expected payout was smaller than it might otherwise have been as they were guaranteed to have to split the pot with the syndicate. OTOH, strictly speaking the syndicate also took a commensurate risk. If 3 or possibly even 2 other players had also won, they would have lost money.
But there's also the loss of confidence and injury to people's sense of fairness, where mathematical odds are only one part of the fuzzy equation. The Texas Lottery organizers thought they were doing right by the state. The more tickets sold, the more money in net revenue. But maybe they should have considered more the long-term implications to the lottery's image and stable revenue streams. Though, at the end of the day perhaps they still made the right decision as fiduciaries, notwithstanding some of them seem to have lost their jobs in the process. In similar cases in other states (usually involving scratch offs?), lotteries knew for years about net-positive schemes, but kept the odds structures as they brought in greater revenue (e.g. attracting interest from savvy players outside the state) regardless. Because the vast majority of players don't respond perfectly elastically to expected odds, especially when they're not a fixed function (e.g. they don't consider things like jackpot sharing), it's arguably a legitimate approach to increase revenue, at least until the schemes become well known.
If each ticket was $1 and then there are 21 million unique numbers, then on average there are 6.5 people per draw.
Also in any case someone buying one of everything vs buying randomly the same amount wouldn't affect the expected return of anyone.
Step back from "legal" and think about what most people expect the lottery to be: Regular people buying somewhere between 1-100 (maybe, if in a big work pool or something) tickets to try to win a low-chance lottery.
Further, as I read it, the cartel bought all combinations of numbers, so there was no risk for them.
Ask yourself if you think this is something that should happen every time the jackpot goes above $25,000,000 - or if the lottery could survive with people knowing this was happening.
It clearly is against the spirit of the game, and any competent lotto administrator would see the red flags in facilitating it.
> It clearly is against the spirit of the game
The spirit of the game is to create a tax on the poor and middle class without calling it a tax.
While true, that does not negate my point.
It cuts everyone else's EV in half if they'd have to split the money two ways in the event of a win. It wouldn't be a problem if the enterprising party hadn't been given an edge that's not available to other players.
But if individuals had bought all those tickets, it would be exactly the same.
Individuals don't have the means or legal right to implement the automation required to do so.
https://archive.is/JoL2Z
Imagine winning the lottery and finding out that you only get half the jackpot because Texas officials broke the rules for and facilitated some corporation getting an assured win.