Nicola Monaghan's news, events and general thoughts about life and writing.

Tuesday, 22 September 2009

The allure of possibility versus the science of probability.

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.

10 comments:

Tricki said...

It could be you. Indeed.
And though you may put money on the game you never really expect to win.

I wonder how many people have watched the balls come down the chute, seen each one match their numbers and still sat there staring at the screen not quite believing that its real because they think it won't happen to them?

If it happened to you do you think you would want the publicity or would you be the ones who tick the little box that says you can't use their name?

I think that I would be the latter, as I am a little bit too shy in real life to cope with the publicity. Although I might feel happy about the money I would probably have to change my name to go on with normal life.

If there was no choice, I guess I would just have to change it, and put up with a little bit of inconvenience - I don't have much to leave behind anyway, and the prize would be worth it :-)

I think winning the lottery would change things a little, you would find yourself a little bewildered and wondering what to do now that this has happened - the shock would make you a little disorientated and you might have to step back, have a rest, and consider what things in your life that you took for granted before will change.

Sometimes you get stuck in your life and something big like that would no doubt change everything and you wouldn't have a clue how to continue with a life that has changed from what you thought it was. What do you think you would do?

Look forward to seeing what Baron has to say, I've been thinking my theory might be a little off in a couple of places, that I wasn't quite getting something, probably because I was too focused and prefered to concentrate on the facts and ignoring the source because I hate to get into complicated mind games and the like.

There's plenty of time before the final show to worry about the fine details, so I think I'll lay off that for the moment and try to think about the bigger picture a bit more.

Bit busy the next couple of days, so won't have time to write, so your blog will have a little bit of a rest as well - as you have no doubt noticed, short concise snappy posts are not my speciality :-)

Tricki said...

Well you nearly got me but I wised up to the social engineering scam in time to save what little face I have left.

email me Baron, or Derren and we can discuss what to do about the show - I hinted that I couldn't face the publicity, you pushed someone very vulnerable to the edge though your mind games and very nearly ended up with a headline you wouldn't have wanted.

Niki M said...

Dave/Tricki

What's going on? Your comments are very intriguing but I don't really get them... Do you think our Baron is Derren? Surely not!

Niki x

Tricki said...

Yes I do, and he's been playing a clever game to try to twist my words against me, and I'm afraid that I cannot play any longer.

I have been honest the whole way through, but only late on knew that I was being set up and hoped you would treat me with dignity, and tried to play the game for the sake of appearances, but I was hinting in the first post in this and in my blog profile before I deleted it again that I was worried about this and didn't want to carry on.

so I am bowing out now, as I cannot cope anymore.

BaronBigShoes said...

ok. i was going to let this go and stop posting here too, as i find convoluted stuff like this frustrating and i already have enough weirdness in my life.

however i've decided that i should have at least one attempt at putting things straight before i split. so here goes nothing. let's see if this works...

i am not derren brown

there i've said it and just to reaffirm...

i am not derren brown

now does that clear things up? :)

likewise i'm not part of some attempt to manipulate people for derren brown's show and i have no known link to derren brown in any way shape or form.

neither am i playing word games with anyone as i'm not even very good at scrabble. and as for social engineering...what does that even mean in this context?!?!

i have to admit, though, that i did have some derren-brown-type thoughts when i read these recent posts. for a moment i wondered if db was here but covertly being rather 'tricki' about it...

(it's interesting to see how this kind of thing can spread, isn't it? :)

the up-shot is that i'm left wondering if robert anton wilson may have been right all along.

i now fully expect to spot the number 23 floating in the pattern of my breakfast cereal.

best wishes,

jon

dave said...

Hi there this is Tricki -the real one this time. I'm afraid a so called friend of mine played a very nasty practical joke on me to get me back for one I did on him a while ago.

I was going on about this Derren Brown thing a lot, boring him with my theories, so he decided to use that to teach me a lesson.

When I was at his house I looked on the blog, but when finished I forgot to sign out, so the nasty sod posted a couple of posts to make me look like a paranoid idiot, and then deleted my google account so I couldn't get back in and delete them. Ill have to up the stakes when I get the daft bugger back and no mistake.

I'm very sorry for that guys - it won't happen again.

Have been thinking a bit more about this, and I have a few interesting ideas, but they seem so weird I'll have to have a think about them some more. Just a quick post to let you know what is going on, I'll be back when thought some more.

Niki M said...

Lol Dave I am so glad. Not least because what you appeared to post made me feel a little bit concerned for your welfare. Glad to hear that you are not that vulnerable after all. :D

Tricki1 said...

Thank you Niki.

Truth is even though I should be sore I think he was trying to teach me a lesson, so I think we can call it even, I was getting on his wick with all my theories and he could tell I was getting a little bit obsessed with something I didn't really know much about really.

I think reading what he had wrote made me realise that I might be over thinking things a little, I mean some of the things I thought would have taken an extraordinary amount of control to pull off, its not really believable, and I would have sounded a little crazy trying to explain such a convoluted plan when the truth is probably a little different.

And even if I actually did figure it all out and was correct, why should I tell anyone else and spoil it for them? Some things should be left as a bit of a surprise, it adds to the mystery, so its probably best for me to give it a little rest and just see what happens. I think that while the misdirections are annoying, its probably just so we don't see what he is really up to, and he's probably doing the right thing in the end.

So I think I might stop posting for a bit and just read - I know I need to shut my mouth at times, cos I do sometimes speak out of turn and risk upsetting people.

Looking forward to the rest of the shows, I hope it turns out well.

Bob said...

Hello ladles and gentlespoons.

Have not had enough time to get into this as much as I would like. Sorta want to figure it out before the last episode.

Have you seen about the Enigma posters displaying cryptic letters in braille under UV light?

Palindromes like KAYAK and ROTOR. Hidden clues, a trail of breadcrumbs.

I feel very much behind the action. Does anyone know where the people leading progress are hanging out? Facebook and the DB blog still seem to be full of very casual fans who have only recently discovered Derren's performances.

I want to try and catch up. :-)

Uh oh, laptop battery running you.

Farewell til next time. NB. Thanks for being a very switched on bunch of people.

Lottery said...

I think winning the Lottery would change things a little, you would find yourself a little bewildered and wondering what to do now that this has happened - the shock would make you a little disorientated and you might have to step back, have a rest, and consider what things in your life that you took for granted before will change.