This seems an interesting and workable algo. Did LottoShares implement this? I did not follow LottoShares. What happened to it?
LottoShares used classic PoW (merged) mining. Its problem was that there was no decentralized RNG. Freetrade apparently had planned to add one post-launch, but ultimately had to admit defeat. (Which is a real pity, IMO - LTS had a good start and could have become very successful.)
ISTR that later versions of the LTS client did implement a dice game with 0% house edge.