MIT Students Scam Massachusetts State Lottery For $8 Million! It's the MIT Blackjack Team Revisited!

We all know the original MIT story oh so well. The eager bright genius students from MIT beating Vegas and Atlantic City for millions counting cards at blackjack.

Well, this time, the MIT genius brats only had to stay in their home state to get the millions. News has just broke that they cheated the Massachusetts state lottery for $8 million! That might be more than the MIT Blackjack Team made!

Here's the NY Daily News article:

Ten years after a group of Massachusetts Institute of Technology students and a professor famously took Las Vegas casinos to the cleaners counting cards, a new gambling scandal has arisen that involves MIT: a researcher and a group of students scammed the Massachussets Lottery.

Worse though, is that the Massachusetts Lottery knew they were doing it and chose to share in the windfall instead of protecting the integrity of the game.

The math whizzes were looking for a unique school project when a couple of them figured out that it would only take about $100,000 in tickets to guarantee success in the Cash WinFall game. When the jackpot rose to $2 million or more, group members bought in and shared in the prize money. By 2005, the group had earned about $8 million in winnings, reported the Boston Globe.

Despite an obvious conflict of interest in knowing that the game was compromised, officials continued to allow hundreds of thousands of $2 tickets to be bought by the merry band of thieves, the paper reported.

Here's how the scheme worked: If the jackpot in a lottery game isn't won, it usually is held over to the next drawing, creating a larger jackpot. In Cash WinFall the jackpot was capped at $2 million. When no one matched all the numbers, the jackpot would be redistributed - "rolled down" to make lesser prizes 5 to 10 times greater than usual, reported the Globe.

The game was so lucrative for the students, that they gave up jobs to stick it to the system on a full-time basis. Additionally, they were backed by investors who shared in the profits, according to a report by State Inspector General Gregory Sullivan cited by the paper.

Buying $600,000 worth of tickets virtually guaranteed a 15-20 percent return on investment. The initial premise was proven by James Harvey, who turned $1,000 in tickets into $3,000 Feb. 7, 2005. He immediately made the "project" larger, forming Random Strategies Investments and spending hours filling out betting slips and lining up eager financers. Within a few years, more groups popped up, but the MIT group figured out how to win the whole jackpot in a single drawing by 2010, reported the paper.

In an email discovered by the paper, a lottery supervisor shamelessly asks ""How do I become part of the club when I retire?"

My take: In an institution where you have geniuses you have genius gambling scams! This one is reminiscent of the huge horse-betting scam that hit New York racetracks for about the same amount of money some years back.