Pick 3 lotteries ( Example 1) copy the numbers racket, an illegal gambling operation common in the poorer areas of large cities. States usually justify their lotteries by donating a portion of the proceeds to education. One version of a numbers racket operation works as follows. You choose any one of the 1000 three digit numbers 000 to 999 and pay local numbers runners $1 to enter your bet. Each day, one three digit number is chosen at random and pays off $600. What is expected value of a bet on the numbers? Is the numbers racket more or less favourable to gambling than the pick 3 game.