Stats Professors and State Lotteries

Last month, Washington and Lee professor Scott Hoover announced that he intended to sue the Virginia State Lottery (a threat that became a lawsuit yesterday).  Hoover, a business finance professor, wasn’t upset that he didn’t win the lottery–he was upset that it had become impossible to win the prize.  His complaint is that the Virginia Lottery advertises inaccurate odds on their scratch-off tickets.  If there is a scarce number of prizes to be won in a scratch-off game, then the odds of winning them drop to zero after they’ve been won.  However, scratch-off tickets advertising that it was possible to win the major prize were still sold well after it had been won.  The Virginia Lottery refused to reimburse customers who bought tickets with the hopes of winning, so Hoover proceeded with his lawsuit.

As mentioned in the second article above, and in a press release by the Virginia State Lottery, state lotteries make an effort to ensure that new scratch-off tickets are not distributed after the prizes have been won.  However, it seems like the way around this for state lotteries in the future is to include a disclaimer that warns that the odds of winning the prize drop to zero after it has been won, and pointing them to their website for updates one available prizes.  Maybe they could even publish updated odds on the website.  The simple solution is to make all of the necessary information widely available (and the Virginia State Lottery has arguably already attempted this).

3 thoughts on “Stats Professors and State Lotteries

  1. My dreams of winning $1000 week for life are crushed!
    I think I should get in on this and extend this lawsuit to NY, PA, NJ, DE, MI, WA, CA, etc… and if I can sue in Mexico, I would do that too.

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