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View Full Version : July 27th Lottery likely to have big positive expectation



WhyAlwaysMe
18th July 2012, 10:32 AM
I got this from AOL so needs more checking but it does look interesting, especially for anyone in a syndicate.



Most lotteries are a rip-off, but maths proves that the July 27th Euromillions superdraw will be sensational!

It's often said that lotteries are "for mugs" and are nothing more than "a tax on people who are bad at maths". As a former mathematician, I would almost always agree.

For example, I know that the UK's National Lottery pays out only 50p for every 1 of ticket sales. In other words, the Lotto has a 'negative expectation' of 50%. This means that -- with average luck and playing over long periods -- you should expect to lose roughly half of your stake money.

As proof, lottery organiser Camelot Group had sales of 6,526 million in 2011/12, but paid out only 3,389 million in prize money. As a result, British punters lost 3,137 million in the 12 months ending 31 March 2012. This is more than three billion pounds, which averages to almost 121 for each of the UK's 26 million households. Ouch!


The UK and the EuroMillions
The EuroMillions lottery draws -- which take place on Tuesday and Friday evenings -- have a similar minus 50% expectation, because they too pay out only half of the stake money in prizes.

Sometimes, however, certain EuroMillions draws are well worth playing -- and the biggest of these rare opportunities arrives later this month.

As the UK is not part of the euro zone, the British pound creates a headache for the EuroMillions organisers. Over here, we pay 2 per ticket, but exactly the same ticket costs 2 in other European countries. As 2 is worth below 1.60, we Brits pay a quarter (25%) more to enter EuroMillions draws than European punters do.

To tackle this British overpayment, Camelot has a special UK Millionaire Raffle open only to tickets sold in Britain. Each EuroMillions draw includes a raffle into which all UK participants are entered, with a guaranteed prize of 1 million. In other words, with two draws per week, the UK Millionaire Raffle guarantees to create at least 104 extra British millionaires each year.

One enormous EuroMillions payout
Every so often, in order to boost ticket sales and prize money, Camelot promotes special EuroMillions superdraws.

For example, on Friday, 23 December 2011, the UK Millionaire Raffle paid out 25 million-pound prizes, handing 25 new millionaires a cash-rich Christmas. In fact, the UK Millionaire Raffle paid out no fewer than 50 million-pound prizes that month, making December 2011 a bumper month for British gamblers.

Even better, the biggest-ever EuroMillions superdraw is on the horizon. To celebrate the opening of the London 2012 Olympics, Camelot is organising a huge payout to coincide with the opening ceremony on Friday, 27 July.

As the sporting festivities get under way on 27 July, that Friday evening's EuroMillions draw will include 100 -- yes, one hundred -- 1 million prizes to be paid out by the UK Millionaire raffle. In other words, as well as the usual EuroMillions prizes on offer that night, there will be another 100 million paid out to lucky Brits.

This will be one of the biggest-ever prize funds to be widely shared by British punters. In addition, it will set a new world record for the largest number of millionaires created in a single draw.

Why this is a super superdraw
As I explained earlier, most lottery draws are pants, because they pay out only half of what is collected in ticket sales. The 27 July EuroMillions superdraw is very, very different, as it is set to pay out many times what Camelot will collect in ticket sales.

For example, let's say that gambling-mad Brits buy 10 million tickets for the 27 July draw. These would cost 20 million and boost the usual EuroMillions prize pot by 10 million. However, the total paid out will be whatever we Brits go on to win in the main EuroMillions draw, plus another 100 million on top.

Therefore, in this example, the payout to UK gamblers could be, say, 110 million on sales of 20 million. In effect, this would be 5 times as much as we paid in, which is a payout ratio of 550%. Statistically speaking, this would make the 27 July draw a terrific gamble, because payout ratios above 100% mean that the odds are firmly in the punters' favour.

What are your odds of winning 1 million?
Of course, the odds of winning 1 million in this Olympic UK Millionaire Raffle superdraw depend entirely on the total number of tickets sold for that particular draw.

Unfortunately, Camelot could not give me a figure for expected sales for the 27 July draw. This is because ticket sales vary dramatically, not least because of the weather and time of year.

Also, ticket sales soar for draws with bumper payouts, especially those with huge jackpots above 100 million following multiple rollovers.

Even so, here's a table showing a possible range of outcomes for British punters. Please note that these apply only to that one night (27 July) and not any other EuroMillions draws. Also, these numbers are purely a general guide and the actual outcome on the night is certain to be different to these figures.

Tickets
sold Ticket
cost Odds of
winning
1 million Possible
UK prize
fund Payout
ratio
10,000,000 20,000,000 100,000 to one 110,000,000 550%
12,500,000 25,000,000 125,000 to one 112,500,000 450%
15,000,000 30,000,000 150,000 to one 115,000,000 383%
17,500,000 35,000,000 175,000 to one 117,500,000 336%
20,000,000 40,000,000 200,000 to one 120,000,000 300%
22,500,000 45,000,000 225,000 to one 122,500,000 272%
25,000,000 50,000,000 250,000 to one 125,000,000 250%
As you can see, the more tickets are sold, the higher the odds against winning 1 million become. This is because the number of UK Millionaire Raffle winners is fixed at 100, but the odds against winning increase as the number of tickets entered in this raffle soars.

Even so, if 20 million tickets are sold, then the odds against winning 1 million will be 200,000 to one -- making this much better than a fair gamble. Indeed, the payout for 20 million tickets sold could be 120 million, which is three times as much as the 40 million cost of these tickets. This equates to a payout ratio of 300%, which is three times the break-even point of a 'fair gamble' 100% payout.

A mathematical marvel
Of course, the chances of you winning a million are still very low, but the high payout ratio means this is the best lottery that I've found since I started loving maths more than 40 years ago. That's why I'll be buying a ticket or two for this Olympic superdraw.

In summary, the 27 July EuroMillions superdraw is the best lottery that I have found since I started loving maths more than 40 years ago. That's why I will be buying a ticket or two for this Olympic superdraw!

Cran
18th July 2012, 11:08 AM
Just need to buy 20 million tickets then

You'll win about 50 million in prizes and so get a 10 million profit assuming only another 20 million tickets are sold... :cool:

But... I'm guessing they will sell more than 20 million tickets for this draw and it is a big risk buying large numbers of tickets because once more than 50 million tickets are sold you're looking at making a loss.

Might as well just sacrifice a couple of goats to bring you luck and buy one ticket...

WhyAlwaysMe
18th July 2012, 12:27 PM
The current jackpot is 79m, it would be good if that got hit before the 27th. If the main jackpot was 'only' 10m then it might keep a lid on sales to an extent.

As you say there is no point buying tickets until the sales figures could be better quantified. Also as an individual buying more tickets makes very little difference to your chances.

Worth keeping an eye on though. Even if the positive expectation doesn't happen it is unlikely to be the massive -EV bet it nromally is. Also the chance of winning 1m is far more attainable than the 1 in 14m of winning a jackpot on the regular lottery.