This is the first of a “Gambling for Quants” series that discusses the science of gambling for quantitatively trained market practitioners. Part 1 describes the well-known Kelly Criterion fractional betting system for simple coin flips. Most of the important ideas are understandable in this...

We report a new result on lotteries --- that a well-funded syndicate has a positive expectation risk arbitrage strategy in an equiprobable lottery with no take and no carryover pool. We prove that an optimal strategy for a syndicate in an equiprobable lottery with many uncoordinated bettors...

The Canadian 6/49 Lotto, despite its unusual payout structure, is one of the few government sponsored lotteries that has the potential for a favorable strategy we call "buying the pot." By "buying the pot" we mean that a syndicate buys one of each ticket in the lottery, ensuring that it holds a...