Lottery Pool FAQ
Last updated 5/14/2005
Do you make money from this?No. Unless we win big, I actually generally lose money. I front all the cash, I make the runs to the stores to get the tickets, enter all the numbers, maintain the website, maintain the program that checks for winning numbers, do massive amounts of emailing, and in the case of a payout, pay the postage and whatnot associated with getting you your checks. In fact, when I calculate payouts, I round up on everyone's payout, so even there I lose a couple bucks.
I take no cut whatsoever. I just buy shares like you do, and maybe win my own share of the pie someday.
Then why do you do it?
Well, if I was in therapy, I suppose my therapist would say it's a cheap
and pathetic ploy to attract attention to myself. Needless to say,
therapy doesn't appeal to me. Two alternate reasons are:
1) Nobody else I know does it and I want to participate in it
2) It makes a lot of my friends happy
Do I send you money every week?
No. I only run the pool when the jackpot is high enough. There's no schedule. Don't send
me money unless I've notified you I'm opening a specific pool. Usually I wait for the jackpot to get near $50 million
cash payout before I open a pool. When the jackpot is that high, I usually keep going, and open a pool on each drawing date
until somebody wins the jackpot, but always make sure I've opened the pool before you send money.
Why do I have to pay into the next pool when there's still money in the last one?
Note the distinction between "pool" and "drawing". You buy into a single "pool" when you buy shares.
That pool is unique, and is identified by a date which doesn't change. Once that pool is running, it will
likely run across several "drawings", because even though it doesn't win the jackpot, it probably wins smaller
amounts which usually get reinvested by buying tickets in the next drawing. So even though money from pool xx/xx/xxxx
gets reinvested in subsequent drawings, it's still
the same pool. I frequently open a new pool when the last one is still running. If you want in on that next pool,
you buy shares in that one separately. Then you have shares in two pools at the same time.
The tickets for each pool are kept separately. There's a separate web page for each pool, identified by date. Ticket
numbers for each pool are listed on the page specific to that pool.
How do you check all those tickets?
I type in all the numbers into a file. Then, when I have the winning number,
I run a program I wrote against that file, and it checks the nine various ways
a number can win. It then prints a summary of the winnings, and a list of the
winning numbers. It actually makes checking the tickets very easy and
accurate. I always post the ticket numbers on the lottery pool page in advance
of the drawing. So, if you want, the evening of the drawing you can download
the file and do your own checking. I post the numbers ahead as extra assurance
that I'm playing straight with you.
Well, speaking of accuracy, how do you know you're typing the numbers
in right? That's a lot of numbers.
The tickets come 5 numbers to a ticket. I type them into the file in groups of
5 numbers separated by a blank line, i.e., one group per ticket. I type them
in left-to-right. After entering the five numbers on each ticket, I hold the ticket up to the screen and check the numbers. Using a standard proofing
technique, I don't check them left-to-right the way I entered them, because
that makes it more likely I'll make the same error.
Instead of comparing 5 rows of 6 numbers, I compare 6 columns of 5
numbers, scanning top to bottom on each column.
It's actually very accurate. One
of the things that also helps a lot is that I worked in a bank for a few years,
and once you've really learned to touch-type the numeric keypad, you never
fully lose that. It takes me maybe 15 seconds to enter the five numbers from a
ticket, but more like 30 to verify them.
There is also error-checking in the program itself, so if there's something I missed, it's likely that the error-checking in the program will notice the problem. I do the following checks in the code:
Check 1: Validate record length and check to make sure it uses "." between numbers
Check 2: Make sure the PowerBall number is between 1 and 42.
Check 3: Make sure the numbers are in ascending order, with no duplicates.
Check 4: Make sure each of the 5 pairs of regular numbers are within the 1-53 range.
Check 5: Make sure each number is 2 digits long.
And finally, every ticket that wins anything, even three dollars, gets rechecked by hand. The implication of that is that even if an error got through all that checking, as long as there's only one error in the number, the most an error could cost us is $4. When checking, I am especially careful on the PowerBall column, since all the big prizes involve that number.
In the interest of "full disclosure", I had my first screwup on the 11/24/2004 pool, where I entered the numbers using a space between the numbers instead of a period. The code didn't check that, and simply reported zero winnings. I didn't believe it, and finally figured out what was happening, so I was able to resolve the problem. I also added additional checks to the code to prevent things like that from happening again.
Has anyone stiffed you for their money?
In all the pools, with all the people, only one person has failed to pay me,
and it was only for 10 bucks. I'm sure she meant to pay, I'm sure it was
just one of those things she never got organized to send, but it did annoy
me. I don't invite her to participate anymore. Almost without exception,
everyone who participates is stunningly fast about paying up. I guess I'm
lucky to have decent reliable friends.
Oddly, I had more trouble collecting the written documentation that the New Hampshire Sweepstakes Commission requires in order to cut the checks than I've ever had collecting the money owed me.. A couple people took a long time to get it together, which delayed the payout fairly dramatically. That's the reason I put in the 14-day rule. If there's a payout, you have 14 days from the drawing date to get me the paperwork, otherwise you forfeit your shares. I hate arbitrary rules like that, but 14 days seems like an awfully generous amount of time to allow for someone to find a copier or a fax machine.
Can I pay you with PayPal?
Yes and no. PayPal is *very* convenient, and I PREFER PayPal
payments. You can sign up
for PayPal by clicking here. What I can't accept
are PayPal payments from PayPal accounts that are funded by credit card. NOTE: PayPal regards a debit MasterCard/Visa as a
credit card. My PayPal Personal Account is free. So, if PayPal allowed me to accept
credit cards, they'd lost money on every transaction. While that's a Silicon Valley
tradition, they still don't permit it.
On Nov 4, 2004, PayPal instituted a monthly limit on Personal Accounts. I am limited to acceptin
$500/month. If I hit that limit, we'll figure something out. If you are
using a credit card (or even a credit/debit card) to pay through PayPal,
that won't work. If you have a cash account, you can send the payment to
.
Normally it'd be someone selling something that accepts PayPal credit card payments, so they'd have a business PayPal account where they have no monthly limit, but *they* are charged the fees (2.9% plus $0.30/transaction) instead of PayPal eating the fees. Obviously I'm not going to be willing to pay a 2.9% + 30 cents penalty on each lottery pool payment I receive.
For more information about that issue, look at PayPal's FAQs and account descriptions at www.paypal.com.
Sign up for paypal here.
If we win, how do I get paid?
I collect the paperwork from everyone as explained in the
Terms and Instructions, then I bring all that stuff
to the New Hampshire Sweepstakes Commission in Concord, NH, along with a floppy
disk containing my list of people and their payout amounts. The floppy makes
it a lot easier and more accurate for them to do it. Then, they cut a check
for each person, for the amount I've specified, and give me the checks.
I then send the checks with an explanatory statement to each of you.
That works out great for me, because that way you're all responsible for your own share of the winnings, which keeps me from having to explain this whole thing to the IRS when I file my taxes that year. If I got one check and then distributed the money, I'd have all kinds of grief from the IRS.
What's the point of the pool in the first place?
It's really very simple. It creates what I consider to be a favorable
trade-off. In exchange for reducing the amount of money any of us wins
individually, we dramatically increase our odds of actually winning
something. My theory
is that the first million dollars is the one that by far would have
the most impact on any of our lives. If I won $110 million, what would I
possibly find to do with all that money except donate it, invest it
badly, and give it away?! This way, we reduce the "waste" in the system,
and use it to enhance our chances of winning. Win me 2 or 3 million dollars,
you think I'm going to be grousing that it's too little? You see my
point?
