Saturday, October 20, 2007

The 2007 LPP Lottery Value Rankings

Both the Lottery Power Picks Home Page and its Gadget display a graph of the up-to-date jackpots from select worldwide lotteries. Visitors can instantly see which ones are high and which are low, giving them a sense of where the money is. However, this sampling contains a mix of mini, mid-size, and jumbo lotteries, making it difficult to identify their intrinsic value when choosing a game.

People tend to play the lottery with the highest jackpot and skip the low jackpots.

Are they making the right decision?

After reading the following article, the answer may surprise you because Lottery Power Picks has calculated and created a simplistic value ranking of its lotteries. Using this information, we believe that our: Canadian members can more confidently decide if they should play Lotto 649 or Super 7; Californians can choose to play Super Lotto Plus or Mega Millions; UK residents can select the best of EuroMillions, Lotto, or Thunderball; borderline state residents can pick either Powerball or Mega Millions; and more.

Because players have a diverse choice of lotteries to play, this post is intended to help them find the best place to invest their lottery dollars. It is not meant to hinder or solicit sales, but to simply help lottery players understand their favorite games a little better. We hope you enjoy it.

The 2007 LPP Worldwide Lottery Value Rankings
The following lists our 2007 Lottery Value Rankings of our 10 sample Worldwide Lotteries. These lotteries are ordered from the best (lowest number) to the worst value (highest number) for the players. Note that there are 3 ties. In these cases, the lotteries are simply listed in alphabetical order.
  1. Canada Super 7

  2. Thunderball
  3. Powerball
    UK Lotto

  4. California Super Lotto Plus
  5. Canada Lotto 649
    Irish Lotto

  6. Hot Lotto
  7. Mega Millions

Ranking Components
In order to calculate these rankings, five statistical components were individually ranked according to value, and their sum was equally averaged. These average values were then ranked from lowest to highest, and each lottery were was assigned that ranking. The final ranking was ordered from lowest to highest, where the lowest represents the best value for lottery players, and the highest represents the least valuable for players. In the case of ties, our ranked list presented the lotteries in alphabetical order, and was not meant to imply any empirical order. The following table summarizes the individual components and rankings we calculated for each lottery. These are discussed in more detail below.







1. Overall Win Odds
2. ReturnOn$10981672145
3. AvgPayout/$53498101672
4. Jackpot/Odds32654791018
5. Cash or Annuity2211221111
Rank 10471694317

Component 1: Overall Winning Odds (Overall Win Odds)
To calculate the Overall Winning Odds, we assumed that each combination was sold and that there were no duplications. Next we counted the total number of winning combinations. By dividing the total combinations by the winning combinations, we derived the Overall (Winning) Odds. For this statistic, the lower the Overall Odds number, the better for the player.

For each lottery, we have calculated these values, and matched those stated by each lottery. The chart below graphically displays these results. Note that UK Lotto towers over the others, giving those players the worst chances of winning. This is followed by the Irish Lotto, and Mega Millions. The lotteries giving players the three best chances to win are: Thunderball, Canada Super 7, and Hot Lotto.

Component 2: Average $ Returned to Player on $ Spent (ReturnOn$)
Having calculated the complete set of winning combinations above, we next determined the total value of the prize money paid back to the players by multiplying the prize cash values paid times the the number of winning combinations. We summed the total money paid and divided it by the total number of combinations to determine the Return on $ invested. The chart below summarized our findings. When reading this, please note that the higher the value, the better the player ranking.

For each $ a play spent on the lottery, Thunderball offers the highest returns with 0.54 for each $ spent. The second and third best returns were the UK Lotto and the Canadian Super 7.
Mega Millions returns the least back to the players, returning only 0.25 of each $ spent. Next comes Powerball, and then Canadian 649.

Component 3: Average Ticket Payout per $ Spent (AvgPayout/$)
The cost that each lottery charges for a single ticket varies. Many charge $1 for 1 ticket, and others charge $1 for 2 tickets, $2 for one ticket, and $2 for 3 tickets (ignoring the foreign exchange considerations). In order to compare the lotteries on a common basis, we have calculated the prize dollar return per winning ticket. Using this type of cost basis, players are neutral to the actual cost of a particular lottery ticket, and can concentrate on the average value of a winning ticket per dollar they spent. Thus, when viewing the graph below, the average payouts are consistently presented. Please note that when reading this graph, the higher the value, the better the player ranking.

The calculations used to determine this information was to total the total cash value all of a lottery's prizes, divide it by the number of winning tickets, and then dividing the result by the cost of a single ticket.

As we can see, the first place UK Lotto average winning ticket payout is nearly $10 higher than the second place Irish Lotto. Third is Powerball. The 10th place lowest paid winning ticket is that of Hot Lotto. The Canadian Super 7 is in 9th place, and the California Super Lotto Plus is eighth.

Component 4: Jackpot $ per Odds (Jackpot/Odds)
Each lottery offers a minimum jackpot prize. These vary from as low as $0.25 million to $15 million. Additionally, the odds of winning any also prize also varies. For comparative purposes, the graph below illustrates the the ratio of the jackpot to odds. Thus, one's jackpot expectation per odd is similarly quantified. Again, the higher the value, the better for the player.

As shown, the three major jumbo lotteries lead this risk/reward measure. First comes Euro Millions; second is Powerball; and third is Mega Millions. On the low side are: Thunderball whose payoffs are extremely small; and followed by the UK Lotto and the Irish Lotto.

Component 5: Cash or Annuity (Cash/Annuity)
Of the 10 lotteries being ranked, six pay the stated cash jackpot prize. The other four: Mega Millions, Powerball, California Super Lotto Plus, and Hot Lotto, each pay the stated prize as an annuity which is a heavily discounted cash prize. This means that the actual cash paid to a jackpot winner in each of these is considerably less than what is stated.

To adjust this discrepancy, we have assigned a value of 1 to all lotteries paying cash, and penalized those who pay annuities by assigning a value of 2 for this measure. Thus, for this measure, the lower the value assigned, the better for the players.

After ranking our 10 lotteries by each of the above measures and then finding their average placement, we derive an unbiased overall ranking that we call the LPP Lottery Value Ranking. In 2007, we believe that our summary informs the players which lotteries offer the best value for their investments. The list below re-iterates our findings and presents our rankings from best to worst value for players.

1. Canada Super 7
1. EuroMillions

3. Thunderball
4. Powerball
4. UK Lotto

6. California Super Lotto Plus
7. Canada Lotto 649
7. Irish Lotto

9. Hot Lotto
10. Mega Millions

After reviewing this list again, it is clear that we can't judge a lottery by it's jackpot size. Tied for Number 1 are: Canadian Super 7, whose minimum jackpot is $2.5 million; and EuroMillions, with a starting jackpot of €15 million. In third place is Thunderball, with a fixed jackpot of only £0.25 million. At the end are the Hot Lotto jackpot of $1.0 million, and lastly Mega Millions, offering $12 million.

As we can see, when looking Lottery Value Rankings list, the jackpot sizes are mixed and appear in an almost random order.

In our introduction above, we posed a question:

Should people play the lotteries with the highest
jackpot and skip those with low jackpots?

Based on our study herein, our answer clearly is:

No! Never judge a lottery simply by its jackpot size!

If you wish to learn more details about any one of these lotteries, read our detailed pages by clicking the links above.

Focus for December: The Powerball Powerplay

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