Now I Know (3 page)

The running joke is that the lottery is a tax on those who can’t do math. But on occasion, we see the opposite—people who are very, very strong in math not only play the lottery but also walk away with their pockets flush with newfound money.

Cash WinFall is a rather generic lottery game in Massachusetts. Pick six numbers out of forty-six. Get them all correct, win the jackpot. There are prizes for getting two numbers right (a free ticket), three ($5), four ($150), and five ($4,000) as well—in total, your odds of winning something are better than 1:7. Drawings are held twice a week (Monday and Thursday) and tickets cost $2 each. The jackpot begins at $500,000, but if no one wins it—and it has only been won once in the game’s history—it progressively increases until it hits $2 million, when it is reset.

The state makes more than $10 million each year on the game. And a few times each year, as reported by
The Boston Globe
, a bunch of players also make out like bandits. The details are a bit hazy as those who beat the game are loathe to talk about it. But the basic story is as follows.

When the pot breaks that $2 million ceiling but goes unclaimed, it gets reset to $500,000 for the subsequent drawing. But instead of simply resetting the $2 million jackpot to $500,000 and keeping the $1.5 million (or more) overage, the state rolls the excess money into the secondary prizes. During these “rolldowns,” the secondary prizes can, and have, hit ridiculous amounts, depending on the amount of excess money in the pot and the number of tickets purchased for the rolldown drawing.

Take, for example, the payouts as of July 14, 2011. Because of the nearly $1.9 million of excess money available, and because relatively few tickets were sold, all the secondary prizes were greatly increased. Instead of winning $5 for hitting three of six numbers, you would win $26. Instead of winning $150 for hitting four of six numbers, you’d get $802. Instead of winning $4,000 for hitting five of six, you’d cash out to the tune of $19,507. (And historically, that’s a low amount for a rolldown; once, the five-out-of-six prize was more than $100,000.)

Say you spend $100,000 on the tickets, each $2. That’s 50,000 entries. The odds of getting four of six numbers correct are about 1:800, so you will roughly break even from that alone. You’ll hit three or six about 1,000 times—that’s $26,000. And you may hit that five of six mini-jackpot once or even twice, adding another $25,000 to $100,000 to your saving account—and yes, that is on top of the $100,000 you have already recouped.

And this is exactly what some people are doing. A statistical rundown suggests that purchasing that same $100,000 all but guarantees breaking even, at worst (unless someone wins the $2 million-plus grand prize, in which case there’s no rolldown from which to benefit). One couple, the Selbees—who run a gambling/investment firm out of Western Michigan—spent more than $300,000 on Cash WinFall tickets just before the July 14 drawing. It was not the first time the Selbees tried to exploit the rolldown drawing: To date, they have claimed over $1 million in prizes.

The lottery has taken some measures—for example, limiting the number of tickets a person can purchase at one time—to prevent this loophole from being further abused. (And the press and visibility around the opportunity should take care of it, regardless.)

In the book
Bringing Down the House
, author Ben Mezrich recounts the story of a group of blackjack players, many from MIT, who systematically took casinos for millions of dollars. The blackjack team’s system, which requires solid math skills, is designed more to avoid casinos’ rules than to exploit the rules of blackjack itself. If anything, the book best demonstrates how buttoned up the gambling world is when it comes to loopholes, aiming to ensure that you can’t beat the house.

But that doesn’t stop people from trying—and, on occasion, succeeding.

In the 1970s, Barney Curley was a gambler known well in betting circles around Northern Ireland and throughout the Emerald Isle. Looking for an edge, he concocted a scheme that would not only end up working, but worked so well that Irish bookmakers ended up changing their betting rules. It started when he realized that one particular Irish horse racing venue only had one phone line, and it led to a public pay phone.

Curley raised a horse named Yellow Sam and had its trainer prepare it for a specific race at the track in question, Bellewstown, located about a forty-five-minute drive north of Dublin. The decision to focus the horse on this particular race, combined with the fact that the targeted race typically featured amateur jockeys, meant Yellow Sam would have an excellent chance at winning.

But the real money wasn’t in winning the race’s prize purse. Curley could make much more by betting on his horse to win, especially if the bookmakers put Yellow Sam as a prohibitive underdog. Curley’s plan helped make that happen. Before running at Bellewstown, Yellow Sam raced in a handful of events, all under bad conditions, and fared poorly. The gambit worked. The horse developed a reputation as being slow and not that competitive, and when Yellow Sam was entered in the race at Bellewstown, it started as a 20-to-1 underdog.

Under-handicapping horses, as this error is called, is nothing new, and odds makers have a long-standing system to account for it. As bets come in, the odds makers adjust the handicap to reflect the betting activity; that’s why the odds on any given sporting event change over time. Most bookies wouldn’t accept very large bets from unknown gamblers or, even worse, from known professionals such as Curley. He needed a way to get a lot of small bets entered without the bets being communicated back to the odds makers at the track—which is why Bellewstown was selected. In the end, that single pay phone was the key to the operation.

Race day was June 26, 1975. Leveraging his network of friends, family, and even hiring some others, Curley distributed his life savings—roughly £15,000 Irish pounds—to his compatriots. He gave each of them between £50 and £300 and a sealed envelope with instructions. Curley sent them to bookmakers’ offices in their locales. Ten minutes before the race began, each of the bettors placed wagers on Yellow Sam to win.

Fifteen minutes earlier—unbeknownst to the off-site accomplices—another of Curley’s friends faked a family emergency. The friend, Benny O’Hanlon, walked into the phone booth and pretended to call his “dying aunt,” offering her solace in her final moments. No one was willing to force O’Hanlon off the phone, thereby precluding the off-site bookmaking offices from reconciling the wagers before them. When the race started, Yellow Sam remained a 20-to-1 underdog, and, of course, won. Curley’s £15,000 investment earned him £300,000, or, accounting for inflation and exchange rates, about $2.25 million in early 2013 money.

Because the operation was entirely legal, albeit sneaky, the bookmarkers were obligated to pay Curley his winnings. They did so in £1 notes, filling over 100 bags with cash. And, to prevent others from abusing this loophole in the future, bets of greater than £100 now must be placed at least thirty minutes before the race begins.

Travel about 150 miles southeast from Halifax, Nova Scotia, and you’ll hit something: Sable Island. You may not see it coming—positioned precariously on the northern Atlantic edge of the North American continental shelf, Sable Island is a small, treeless crescent of sand. At its widest point it runs not quite a mile and is only thirteen square miles in area. No one has been born there since 1920 and, except for a handful of transient researchers, no one lives there, either.

Unless you count the few hundred horses.

Sable Island is home to 350 to 400 short, stocky horses, which over generations have found ways to thrive in the unfriendly terrain they call home. No one owns them—they’re feral and roam the island freely.

How did they get there? Although many believe the horses’ ancestors were stranded on the island after a shipwreck (Sable Island has a history of causing such disasters), that’s not the case. During the French and Indian War, Great Britain deported thousands of French settlers, known as Acadians, from Canada, stripping them of their property in the process. One merchant hired to assist in this forced relocation was a man named Thomas Hancock (uncle of the now-famed American patriot John Hancock). Hancock took some horses owned by the relocated Acadians for himself and, for reasons that remain unclear, relocated them to Sable Island.

Today, this species of horse is called the Sable Island Pony. They are not truly ponies, however; the name is a misnomer, likely given to them because they are smaller than most horses. The vast majority of Sable Island Ponies live on the island. The only other place they’re found is at Shubenacadie Wildlife Park in Nova Scotia; the Canadian government moved a few there to ensure the species’ preservation. But at this time, that may be unnecessary. The horses’ Sable Island habitat is protected by Canadian law, which mandates that the creatures be allowed to live on the island without human interference.

Buried treasure. The idea that one of us—armed with nothing more than a shovel and an X-marked map—can stumble into unknown riches has romanticized those words. Some buried treasure may be on Nova Scotia’s Oak Island, home of the so-called “Money Pit.”

Discovered at the tail end of the eighteenth century by a sixteen-year-old, the Money Pit goes down at least ninety feet and contains man-made items at that depth. Exploring further has proven difficult because of cave-ins and flooding, which have resulted in six deaths. (Some ascribe the difficulty to a series of booby traps set by whoever buried the items.) We don’t know what’s down there, but we do know that there’s
something
in the pit, which, by almost all accounts, shouldn’t be there.

Like most legends involving buried treasure, though, there’s reason to believe that the Money Pit is a myth. One popular theory is that the pit is a naturally occurring sinkhole, which at one point swallowed up some tools and other materials in the area. This would explain the unnatural objects located at extreme depths. While many explorers of the Money Pit may be exercising questionable judgment, at least one well-regarded person probably made his way there. In 1909, Franklin Delano Roosevelt allegedly made an attempt to find treasure buried within (there’s a picture of him and some friend at the site during an excavation attempt). FDR—and everyone else since—came up empty-handed.

Those who believe that treasure exists at the unreached bottom of the pit cite a number of stories and theories. Allegedly, at about eighty or ninety feet, lies a large stone with symbols carved into it. Attempts to decipher the message have yielded a promise of riches: “Forty feet below, two million pounds lie buried.” But that stone was last seen in 1912, and no images of it exist today. It may have existed; it may be the stuff of legend. If it’s true, it’s led to incredible theories as to what’s buried deep below. Some people believe it to be pirate treasure; others think that Spanish Armada sailors or British troops fleeing after the American Revolution dumped items of value there. Another theory holds that at the close of the Seven Years’ War, French troops moved the coins held at the Fortress of Louisbourg (on mainland Nova Scotia) there.