It's been my understanding that the local bookie is slightly better than the state for small time gambling.
Meaning, on the three digit lottery drawing, the state pays 500 to 1 on a game where the odds of winning are 1000 to 1. In order to be the more attractive alternative to the state lottery, bookies pay 600 to 1.
For the small time payouts, I'd trust that the bookie's desire to keep the bets rolling in will be inducement enough to pay. They operate in small circles and word would spread quickly if a bookie refused to pay someone who had legitimately won.
Furthermore, the local bookie quite often uses the officially published state lottery numbers as the basis for his own game, and keeps his books more open to his players than the state does.
I recall a certain game, run out of a certain bar, wherein the players paid $20 to select a set of numbers, to create their own "bingo card". Once the game was closed, the organizers took their 20%, the remainder was the jackpot, and then they published that amount with all player-selected combinations, without any names. The state lottery acted as the caller. Every official drawing converted uncalled numbers into called numbers, and when all numbers on someone's card had been called, they won. Any player could check whether they--or anyone else--had won as a result of the most recent drawing.
It was assumed that all players knew which of the published combinations was theirs, and they could all talk to each other. So if they got the unremarkable shopping bag full of $20 bills, and it was not the published jackpot amount, word would get around, and people would stop playing.
State lotteries typically allocate 5-10% for game management and promotion and a larger fraction for the state, for a total rake of 33-50%. Delaware, Oregon, Rhode Island, South Dakota, and West Virginia all keep more than 50% of the player bets.[0] Massachusetts actually runs a fairer game than most.
So if you want to be a small-time bookie, you now know which five states are the most profitable to operate in--along with the six states with no lotteries that are not casino-laden Nevada: Alabama, Mississippi, Utah, Alaska, Hawaii, and Wyoming.
> In order to be the more attractive alternative to the state lottery, bookies pay 600 to 1.
I don't disagree with you, but I would modify my claim of empiricism to mean "in the absence of a state lottery".
There's more than one reason the bookmaker ought to be more generous, which relate to the benefit of state backing:
you can be sure the rake is not going to be used for the public good, and
if the bookmaker takes heavy losses and bankrupts, you can't be sure you'll get your big win even after beating the odds.
See also e.g. http://www.bbc.co.uk/news/uk-england-29543448 You can be sure the casino wouldn't have cared to comment on Phil Ivey's methods until they were facing a significant net loss. Would they have returned his stake if he was unlucky enough to make a loss? Would they have bothered to sue if he had won a small amount? He suffers here also for the extent of his luck.
Meaning, on the three digit lottery drawing, the state pays 500 to 1 on a game where the odds of winning are 1000 to 1. In order to be the more attractive alternative to the state lottery, bookies pay 600 to 1.
For the small time payouts, I'd trust that the bookie's desire to keep the bets rolling in will be inducement enough to pay. They operate in small circles and word would spread quickly if a bookie refused to pay someone who had legitimately won.