Will you win Lotto?

DID YOU know that there are over 4000 Lotto millionaires in Australia? What are your chances of becoming one of them this year? And how does your life really change if you win?

It’s most people’s dream: you take a ticket, you win big, you quit your job and live the fine life.

The reality is that, in Lotto, you have an 8,145,060 to one chance of picking all 6 numbers; or a 452,503 to one chance if you have an 18 pick. In Powerball where the payoff is higher, the odds leap to 54,979,155 to one – that’s everyone in Australia times two and a bit!

All these odds are posted on the Game Odds table on the Lotteries NSW website. The site carries odds of all the games offered, including national games like Ozlotto, Powerball, Pools and Saturday Lotto.

Powerball has recorded two individual wins of $30 million and another $30 million shared. This life changing amount is due to the fact that Powerball is a jackpot game – and with those odds of 54 million to 1 – the chances of a person getting all numbers right is very, very small.

Still, according to community manager for NSW Lotteries, John Vineburg, “that’s a huge amount of tax free money.”

In Australia, unlike the US, our government considers gambling wins as a ‘windfall’ and not liable for tax (unless you are a professional gambler or syndicate).

So we all pursue the dream and even closely watch what numbers fall each week so we can better ‘pick’ a winning combination.

Do systems work?

Of course, systems are bunkum to Dr Borek Puza, senior lecturer in Statistics at the Australian National University, Canberra. He, like most statisticians, says that every number has an equal chance of being drawn, every time.

It’s called ‘the law of averages.’ When we persist in thinking that, because number 36 has fallen often, it either won’t come up – because it’s time is over – or maybe there is something special about number 36, then we are pursuing something called the ‘Gamblers’ Fallacy.’

The Gamblers’ Fallacy is defined as the incorrect belief that the likelihood of a random event can be affected by or predicted by other, independent events. So the gambler thinks that the outcome of a random event is more likely to occur because it happened recently. This is the concept of a run of good luck.

Another form of self delusion runs thus: a particular outcome is more likely to occur because it has not happened recently – better known as, it’s my turn now. This, according to Borek, is known as ‘Reverse Gamblers’ Fallacy.’

Another version of the fallacy is that a certain run of numbers is not probable; for instance, the assumption that 1, 2, 3, 4, and 5 coming up together is less likely.

Borek says the tables of which numbers have been most used or drawn in Lotto or Keno or whatever game you’re playing are useful. But this is because, if people are picking certain numbers, avoiding those numbers will increase the size of your win since fewer will share your prize pool. However, this won’t increase your chance of winning.

What is it like to win?

Of course people do win big, and John has the task of phoning them up and telling them.

If a player is ‘registered’ – which in NSW costs $3.30 a year – John has their name and phone number. He calls them and tries to break it to them very, very slowly.

“I announce myself and ask if they are sitting down because I have some good news, and are they ready for a pleasant shock? I then ask if they are aware of the size of the jackpot. By then, they are entertaining the idea of a big win and so it comes as less of a shock,” says John.

“They then need to fill in a claim form and send in the ticket. We verify it and pay them within two weeks. This period also gives them some time to adjust.”

John says NSW Lotteries also counsels them on their privacy – who they should tell – and urges them to get professional financial advice. Often the winner feels somewhat guilty about the windfall at this point, and is vulnerable to pressure to give some of it away. John tells them it is their money, to do with what they like.

“The vast majority are completely sensible about it,” says John.

Overwhelmingly, Lotto millionaires talk about paying off the house, a new car, a holiday and helping family members. If they win multi-millions, they talk about a bigger house in the same suburb and buying the kids houses. “If you press them on their dreams it is ‘well, I am going to buy champagne or eat prawns tonight.’”

“The majority of them don’t want to change their lifestyle; they just want to be free of money worries.”

That sounds like what the rest of us are trying to achieve with our savings and retirement plans. And as most of us get there, it leads to the obvious question – why do we keep buying Lotto tickets?

Borek says that, if you do it occasionally it is fun – and you have a chance to win big for a small outlay. The problem start if you do it all the time.

Borek has calculated the loss factor on roulette – and this formulae can be applied to any game of odds.

In roulette there are 18 red, 18 black and one green. If you pick red and put down $10 then you have a 18 in 37 chance of winning. And a 19 in 37 chance of losing.

So to caculate your net gain: (18/37) x $10 = (19/37) x (-$10) =( -$10/37). This adds up to: if you play long enough, you will lose 27 cents in every $10. Therefore, you are guaranteed to lose money if you keep playing.

If you still don’t believe it, you can go into a system 18 in Lotto – which increases your chances of winning to 18,000 to one. These cost upwards of $9,000 (each member pays around $20), and that’s why they are the preserve of large workplace syndicates – or you can check with your newsagent as some run these weekly syndicates.

Where to find out more

The table of gambling odds is at the NSW Lotteries site

Wikipedia has a definition of the Gamblers’ Fallacy at www.wikipedia.org