Wed 19 Dec 2007

I was checking my e-mails the weekend before last and was happy to see one from the National Lottery - I play online and pay by direct debit so everything happens automatically, if I’m lucky enough to win anything then they e-mail to tell me and then transfer the money directly to my bank account.

Normally on seeing an e-mail from them I get a little flutter in my stomach - could this be the big one at last? The e-mail doesn’t actually tell you how much the prize is, it simply tells you a prize is your’s and asks you to log into the Lottery website to check how much it is.

Last week however I just clicked on the link - no flutter, no excitement. I’ve probably been numbed by the number of times I’ve got ahead of myself only to find out I’ve won £5 by matching one number with the Thunderball, or matched 3 numbers in the main Lotto and won a tenner.

But this time was different, after logging in up popped a message to say £873.00 had been transferred to my account! That’s a lot better than a tenner, and easily the biggest prize I think I’ve ever won on anything.

Clicking around the site to find out what I’d done to receive such a vast sum, it turned out that 5 of my numbers had matched the 6 numbers that came out of the machine. While I was happy to receive almost £900.00, the news that had just one more ball matched then I would have had a share of approx £3.75 million did sour things a little.

Now I’ve got over it, and I’m back to being happy about winning - it’s £873.00 I never had before anyway!

I’ve often thought (even before winning!) how unfairly spread the prizefund is. I don’t know who sat down and worked it all out, and I don’t envy him the task as it must have been an absolute nightmare but that doesn’t mean I agree he did a good job of it.

I can see why they would want to hold back a large amount of the fund to have as a jackpot prize - being able to advertise a draw which offers people the chance to become a millionaire is of great importance to help sell tickets I would assume.

From the £1 you give them for a ticket, you lose over half of your money straight away as this is the sum which is split between the charities they support, administration costs, tax etc.

So only 45p from each ticket makes it into the prizefund, but due to the large number of tickets sold each week the actual prizefund is usually substantial enough to almost always guarantee the winner or winners will be millionaires - depending on how many people match all 6 numbers.

And that’s where I think this system falls down.

The vast majority of winners will be those matching three numbers out of the six drawn - the chances of winning a prize at this level is approximately 1 in 56 which are relatively good odds.

Because this level offers a fixed prize of £10 to anyone matching three of their numbers, these prizes are paid out first.

On the very unlikely occassion that there are so many winners that the prizefund isn’t big enough to pay out all the £10 winners then the prizefund is split equally between all the winners of all prizes. This is the only time that someone matching three numbers could walk away with less than a tenner. What’s extremely unfair is that in this case, the person who matched all six numbers would also walk away with that same prize.

Imagine how that would make you feel - you eventually think you have come up lucky only to win a pittance! And the chances of you actually winning again are unbelievably slim, what a disaster.

After paying out the £10 winners, the balance that’s left is then split proportionally between all the other prizes - which are then divided again amongst all those who have won at that level.

I’m not sure how the percentages were worked out, but it would no doubt have been calculated by someone much better at these things than I am so I assume he knew what he was doing.

52% of the remaining fund is held back for the jackpot winners, which seems a very large sum but perhaps it’s fair enough. Splitting such a large amount between a few does mean that the lesser prizes are a lot smaller - for me there’s too big a gap between the bigger prizes.

The chances of being lucky enough to match all six numbers is approximately 1 in 14,000,000 which makes it extremely unlikely indeed - but if you are lucky enough to win it then you are almost guaranteed to win big. With the chances of winning so small then I suppose there’s an argument that it’s fair that the reward is so high.

The next prize available is for those who match five of the main numbers with the Bonus Ball - the chances of winning this are 1 in 2,330,636 which is still extremely unlikely. It really means you could spend £2,330,636.00 on tickets and only win once - for me that means the reward should be relative to this, but whereas 52% of the fund is set aside for those matching six numbers, only 16% of the fund is available to those matching five and the bonus.

Because the chances are lower, not only is the prize fund smaller, but the number of people winning it is higher which means that the gap between those winning this prize and those winning a higher prize is much greater than it should be in my opinion. On an average week, someone could probably expect to win aroung £100,000 for matching five numbers and the bonus compared to around £2,000,000 for matching six numbers - both are huge sums of money, but is the difference justifiable?

The prize I was lucky enough to win, matching five numbers, was a share of just 10% of the prizefund. Logic dictates that the chances of winning this prize are higher than the other two, so as with the five and the bonus prize this smaller share of the fund is having to be split between even more winners. The odds of winning are 1 in 55,491 which is a huge drop compared to the other two winning combinations. The reason my prize was lower than average was because I had to share the 10% with over 800 other people!

Matching four numbers with those drawn is a 1 in 1032 chance. This opens up the opportunity to have a lot more winners than the other combinations so the share of the prizefund is a lot more than it is for matching five numbers or five and the bonus. This time 22% is shared among these winners, probably to allow for the average prize to be significantly higher than the £10 win for matching three numbers.

So what could be done to ensure that the prizes are more evenly spread?

One option is to have more guaranteed prizes, so you could have £10 for three numbers, £100 for four numbers and so on. The problem with that is obviously in case there’s so many of these smaller prizes that the larger ones decrease dramatically.

Perhaps £100 for four numbers is too much and it should be limited to £75, which shouldn’t put too much of a dent on those prizes further up the board.

There are three further possible combinations which have to be sorted, those matching five numbers, five and the bonus ball, and those matching all six.

The higher the prize, the less chance there is of winning it so is it sensible that those people also get a higher share of ths prizefund?

My thinking is that the fund should payout £10 and £75 for those matching three and four numbers respectively, and then the prizefund should be split evenly between the other three possible outcomes.

A third of what is left could mean that those getting what is effectively second prize could in theory end up with more money some weeks than those who are winning the main prize but the odds are stacked against this so it’s unlikely and should hopefully be a rare event. The difference between having a 1 in 2,330,636 chance for five and the bonus ball compared to 1 in 14,000,000 for matching six numbers justifies this I think.

The third of the prizefund set aside for the big prize should almost always be split between less winners than the third set aside for those matching the second combination of five numbers and the bonus ball.

It’s all hypothetical of course as I’m sure this was all thought of at the time and is unlikely to be changed. New games are added from time to time, such as Daily Play, The Thunderball and Dream Number so it may be we see a game with a fairer spread of the prizefund one day - but it’s unlikely that a newly introduced game will ever become more popular than the main Lotto draw which the majority will continue to play.

Those who determine how the prizes are distributed are also no doubt governed by some strict rules which are meant to decrease the likelihood of something extraordinary happening one week which would cause the prizefund to be unable to pay out all the supposed guaranteed prizes which would cause uproar amongst the lottery’s players.

I think we therefore have to accept the rules and prizefund divisions as they currently are and just hope that when the day comes that it’s your turn to win big, then you don’t have to do any sharing!

Now, what can I spend my winnings on…

December 19th, 2007 at 3:28 pm

Brilliant title to the piece! You lost me in all those calculations, however. But gave me an idea for a post to my personal blog. Hey, I win some, I lose some. Thanks, Craig!

December 19th, 2007 at 3:55 pm

Clive »

Thought the title might attract attention to an otherwise pretty dull post!

You can send on the usual Inspiration Fee once you have written your post Clive

April 26th, 2008 at 10:15 pm

You’ve got some interesting points there. Particularly the thought that if I’ve got numbers which are popular I could get £10 with 6 winners! Promped me to find this :http://news.bbc.co.uk/1/hi/sci/tech/240734.stm

which gives this as an example “The remarkable draw on 14 November 1995 when 133 tickets shared the £16 million jackpot prize is a clear example of the effects the team had deduced.

The winning numbers were 7, 17, 23, 32, 38, 42 and 48, all of which lie in central columns of the ticket, and the players won only £120,000 each. The average number of jackpot winners is five and the average amount won is £2 million.”