What with all this Derren Brown stuff and that, I've been thinking a lot recently about the Lottery, about casinos, about the games of chance we play with our money and why we do it.
The Lottery is probably the most extreme example. The chances of winning the jackpot are remote and, in fact, a single line is not terribly likely to win any prize. 'It could be you' approximately one out of fourteen million times. An averagely healthy middle aged man has a higher chance of dying in the hour before the draw takes place than he does of winning the jackpot. Flush a pound coin down the loo and you have more chance of seeing it again than winning the lottery had you bought a ticket with it. You are almost as likely to find a winning lottery ticket on the floor as you are to win with one you've bought. Etc etc. So why do people play this game at all? And don't make me laugh and tell me it's for the 'good causes'.
I decided to take this a stage further and do a few sums.
Let's take what I'd say was a fairly average lottery scenario. I personally rarely put my hard earned cash into the hands of Camelot, but I know plenty of people who spend much more than the example that follows.
So, let's say Joe Blow plays Lotto twice weekly (after all, what if you didn't put your numbers on and they came up?) and buys 5 lines. He also puts 5 lines on Euromillions, and buys a couple of £2 scratchcards a week. So we're not talking an addict by any stretch, but just someone who thinks 'It bleddy well won't be me if I don't get a ticket.'
If you total that up, we've got £21.50 a week. That doesn't sound too bad, does it? It's not exactly breaking the bank...
Well, unless you think about the other stuff you could do with that cash. Total it up over the course of a year and it comes to £1118, which is actually quite a lot of money.
How much is Joe Blow likely to win?
Well, the chances per line of winning the Jackpot are 14 million to one, and five numbers plus the bonus one in about two million. Even getting four numbers is a one in over a thousand shot. The chance of winning a tenner is 1 in 57. On that basis, with his tenner a week, our Joe can expect (theoretically) to hit his three numbers and win a tenner 9.12 times a year, and his four numbers once every two years - coming to a grand total of about £123/year. He can expect to win the jackpot or any of the big prizes, well, quite a bit less than once in his entire life. He's spending £520 each year, so that means he's losing about 76% of the money he puts down. Sure, we can add the bigger prizes to the mix but they make very little difference, being so unlikely. So I reckon we can safely say Joe's going to lose about 75% of the money he spends on the lottery, over time. If this was a casino game, we'd say the house edge was 75%.
There would be slightly different numbers for Euromillions and for scratchcards, of course, but it's after one in the morning now and I ain't looking them up and working them out. I suspect the scratchcard figures will be significantly better, and the Euromillions ones, worse. Just a guess...
When you think about it, there are so many better ways to spend that £21.50 a week. You could keep a teenage girl
or store your car in a 'Insulated, Secure, Dehumidified controlled environment', have your own, year round pitch at a caravan site in Newquay. You could give it all to good causes, instead of the twenty odd percent passed over by Camelot.
You could even invest it. Sure, you don't get the heart stopping flurry of watching the draw with the ticket in your hand. However, putting it in a savings account, for example, would get you about 3% pa on your money, making you an extra approximately £16.60 a year (based on putting the money in every week and not making any withdrawals) and, of course, you get to keep the £1118 you've saved as well. And you could invest in stocks, shares or property and get a better return. Well, not based on recent form, of course. (Investments can go up as well as down, none of the information here constitutes investment advice just a few facts and figures yadda yadda...)
You would even be better off heading down the casino with this money. There are lots of casino games, if you know the correct strategy for playing them, with relatively low house edge. For example, if you play perfect strategy Blackjack (something you can learn and that is well documented on the interweb) over time, you should lose about 0.5% of your money. So you get to keep 99.5%. There are other slot and Casino games where the house edge is less than 5%. Considerably better than the lottery, when you look at that way. (Remember, equivalent to a house edge of about 75%!)
So, in short, you'd be better off saving up that £21.50 and taking the whole lot (plus your £16.60 interest) down the casino one night every year, and having a good ole time on the Blackjack table.
But, of course, it *could* be you. And we all know why people play, really. Life changing amounts of money is why. Like the Euromillions last week with a jackpot of £83 000 000. Hell, despite knowing everything I've just typed, I bought a couple of tickets. The prize money was too much to ignore, even though I knew just how unlikely it was that it would ever be mine.
And that's the weird thing about the lottery. Because, despite being rather reticent to give Camelot my hard earned cash over the years, I find myself in profit so far. I haven't entered more than about thirty times since that first draw in 1994 when I had my first lottery win.
Let me take you back in time.... imagine swiggly lines making the screen go all misty... and then you see me. it was November and the nights were closing in. There I was, slim and young and hopeful, just 23 and so soon out of a mathematics degree that I should have known better, sat on the sofa at my mum's house with my first ever lottery ticket (one line) in my hot little hands.
The first number came out. It was 30. It was on my ticket. The second number came out. It was on my ticket. The third number came out. It was on my ticket.... My heart was beginning to beat rather fast at this point.
By the time the draw had finished I'd found out I was one in a million.
Well, one of 1,073,695 people who'd won a tenner. Fancy that, and the first three numbers as well. I realised that no other lottery draw would ever match the excitement of that first one, well, unless of course the second half of the draw lived up to the promise of the first, and I so I've never watched a live draw since. Well, not until that evil bad man Derren Brown did his naughty prediction show.
Still, I did go on to have a lucky run. Over the course of the next several months, I only entered a (lucky) seven times. I lost three times and won a tenner three times. Then, as part of a family syndicate, I won about £50. I decided to quit while I was ahead.
I've bought only a few tickets a year since and won another tenner, and fifty something on the Euromillions, so I reckon I'm probably still slightly in profit. I also know two people who have won life changing amounts of cash. But then, I know a lot of people.
None of that changes a thing. I am an outlier and still insist, despite my experience, that there are much better ways to play with your hard earned cash.
But, of course, "It could be you."
Good luck with that one.