Disclaimer: this post is not financial advice. I’m going to be talking very vaguely about my personal experience when it comes to lotteries, to give context on why I’m particularly grumpy about certain attitudes in the world, in my bubble, and even in Free Software.
For what I’m about to talk about to make at least a sliver of sense, I will have to give some personal context, which is not something I’m very comfortable doing given the current day and age, and the fact that, quite honestly, I’m uncomfortable bringing it up, as it gets close to feel like hiding behind an excuse for a number of past mistakes or just for the way I am now. Take it with the appropriate amount of salt.
I grew up in Italy, and while I can’t say that I grew up poor (there’s a lot more people in much worse situations), I also cannot say I was raised in an affluent household. My father was a blue collar worker in the local chemistry industry, which had been downsizing ever since my memory starts, to the point that for a number of years the only income we had as a unit was his unemployment benefits and his disability pension. Things have, at times, tough, but at the very least we always had a roof above our heads since the house is my mother’s.
As it happens, like most people in the situation of having access to some cash, but generally not quite enough, we have seen our fair share of “get rich quick” schemes trying to make us (or more often, my parents) into victims. Some actually managed to. Probably the biggest one has been the lotto, which is (or was) a State sponsored lottery that caused my parents to waste quite a lot of money over the years, and nearly got me into the same spiral. That’s the topic of this post.
Note that there were, and are, multiple state sponsored lotteries and “games” in Italy. Some are more chance-based than other, but for many many years, the whole concept of betting was considered taboo. That itself feels a bit strange, but I’m not an expert on the topic.
For most of the follow-up discussion to make sense, you need to get a vague understanding of how the Italian lotto works. I’m sure there’s plenty of texts, books, Wikipedia pages, and so on that can explain the game, rules, and history of it better than me, but it’s only the superficial view that is important in this context. Lotto is similar to the game of bingo: every so often, five numbers between 1 and 90 included are drawn at random — the players’ objective is to select a certain number of numbers beforehand, and hope that one or more of them are present in the drawn selection.
The game is old, and has some vague historical legacies around it, despite changing often. I first remember it when the chosen numbers were written on pieces of paper coming from some central government body, and stamped with a rubber stamp by the owners of the stores that were providing the play area. And the drawing only happened once a week on Saturday. Growing up I saw the system being replaced by a digital, computerized, and even networked system managed by a company called Lottomatica, that by the design of their network turned out to be the perfect provider to pay bills, fines (parking and speeding tickets), and prepaid cards top-ups over the years. I believe they are still effectively in use today for those use cases.
The frequencies and amount of ways to play this game also increased over the years, which to me spell that whoever is managing it clearly understands addictive gambling behaviour. As I said, growing up I remember it being drawn only on Saturday, then they introduced an extra draw on Wednesday, and eventually one more on Tuesday. I don’t know if they added more since. At my first recollection the drawings were also done in ten different cities across Italy (the “wheels”), so instead of just five numbers, you would get fifty numbers every drawing — this was not always the case, as cities were added and removed over over hundred years history of the game, and I think they introduced an 11th “wheel” a few years back as welll.
To make things particularly more complicated (and thus, cynically, extracting more money out of fools like my parents), they allowed selecting multiple combinations of numbers — so you could play three numbers, and win on any one, two or three of them coming up, but you could also play six numbers and win on any of those combinations as well. But how much you would win would decrease significantly based on the possible win combinations, with the wheels selection also linearly decreasing the winnings, as the default “play” would split your bet equally across how many “wheels” you selected.
Now, if you think of it rationally, short of fraud (which admittedly, in Italy, is not something you can dismiss so easily), these drawings are completely independent from each other. If you were to always play the same exact numbers for a long time, obviously eventually they will hit a combination — but the return on the bet is unlikely to be useful. A mathematician would be more suitable than me to look into that.
But people don’t think of this rationally: books are published that suggests what numbers to play based on the dreams you had, late night shows advertise premium call numbers that can suggest you the right numbers, and, most importantly for what I’m talking about here, “newspapers” are published trying to rationalize the frequency and likeliness of a certain number being drawn on a certain wheel.
Back at that point, my parents were going quite heavily invested in lotto, and were buying those no-news “newspapers”. My mother started collecting the historical printouts of the drawings since the game started, trying to find out some pattern in the numbers to figure out what would come out — and play dozens, if not hundreds, of combinations every week, then twice a week.
As I said, I ended up getting involved in this — with hindsight, I was just happy to spend time with my parents on something that they seemed to care about, but I can definitely see that the whole enthusiasm was also stoked by the way the State-owned national TV shone more light down the additional drawing, including the additional lucky draw of non-winning tickets, which I had stamped (with our address) by the hundreds for sure.
Now, among the things that made me involved into all of this was the fact that some of those newspapers started including listings of BASIC and QBASIC programs that purported to analyze and predict the numbers that would be drawn in the future. They were obviously nothing real, but that didn’t stop them from making them interesting for a young inexperienced boy who wanted to learn proper programming, so I have spent a significant amount of my time at that point either trying to adapt the GW-BASIC listings to work on a Commodore 64, or to combine the multiple QBASIC programs into a single unified interface.
To be honest, I could have learned a lot more about data structure and integration, if they actually bothered explaining the design instead of giving the listing — but that would probably have shown just how pointless the whole pseudo-analysis was.
Personally, I have to assume that the reason why it took me a long time to realize how much of a waste of time and money this was, was that I hadn’t had quite the concept of money in my head at that point, and that I did manage to actually win some money after a dream, which obviously convinced 13 years old me that there had to be something about this whole meaning business (obviously, there isn’t.)
Why am I digging up this past, and painting myself and my parents as fools? Well, there’s two main reasons. The first is that I am still angry by how much disservice the Italian State had at that point done to its own people! Feeding a gambling addiction by increasing the amount of chances people can take, running high budget shows on national TV, and not regulating at all the space that crawled with scammers and fraudsters claiming to be able to predict what the next numbers drawn would be. Ironically, nowadays I’m also wondering why at that point it was perfectly acceptable for people to throw money into the lottery, but most sport betting was banned: at least the latter has an element of analysis based on the ability of the sports players involved.
The second reason is that current affairs are not particularly far from that situation. The “Crypto Crash” is leaving enough people with no savings, and the “fools” who listened to advice to move everything into this or that currency are the ones taking the blame. The regulated markets are also taking a nosedive, particularly when it comes to stock that was seen as a way to make lots of money quickly, rather than having a steady track record of maintaining value over time. And this is upsetting me because I know that many of those people are in the same situation as my family used to be — having enough savings that it’s worth investing, but not enough that burning a huge chunk of them into a bad market deal wouldn’t be hurting.
And just like for lotteries, the people who keep trying to tell you they can make you rich, are the ones that are taking their money home. Not with the lottery, not with cryptocurrencies, but with everything that goes around it: it was newspapers and books, that were cheap enough to churn out and had plenty of suckers to pay for, and now it’s courses, initial offerings and the general “Give me money and I’ll make you all rich” approach.
There’s even more similarity if you look around for it. Objective technical innovation could be found even in an environment that was and is unhealthily playing to addiction and fraught with fraud: the people working on Lottomatica in Italy built a great system – from the technical point of view – that allowed an instantaneous recording of a “play” through a tamper-proof receipt, that reduced the risk of fraud from those running the shops that allowed you to place your bet, and it was flexible enough to become a de-facto payment terminal for so many other governmental and non-governmental uses, similar to Japan’s konbini based system. And at the same time, the presence of so many outlets to give advice, fake or real than it was, provided employment for likely hundreds of people, technical and not.
But this was, and still is, exploiting the gambling addiction of people. It doesn’t matter how often the ads may say “When the fun stop, stop” — yes you can technically gamble or “play” these games just to enjoy yourself, but that does not make them any less dangerous to those who have the most to lose. And funnily enough, I don’t believe that “democratizing” these makes for a better world — indeed, I am in favour of raising the barrier of entry, in the way that casinos in Italy used to enforce a dress code, or various regulators define required tests to pass before being able to buy into complex markets.
I know that this is a futile attempt, but I really wish to hope that at least in the world of Free Software we will stop promoting harmful technologies, and realize that just because you and your peers can distinguish a scam from something real, it doesn’t mean that those who don’t are fair game to take advantage of.