Friday, February 27, 2009

3 UK Lotto Oddities or Questioning Camelot

We first began offering Lottery Power Picks to players of the UK Lotto in the beginning of January 2008. Since that time, we are astonished at the frequency of Jackpot winnings and how many winners are reported per drawing. So, we decided to investigate this topic to determine whether this is or could be true. In a world where extensive financial fraud is being discovered and shaking our global economies, we believe this is the time to determine whether the reporting of the UK Lotto results are:

Too Good to be True?

As being reported on the radio and televisions, investors and regulators often failed to be reasonable or cautious when seeing an opportunity. Would we call this Greed?

Inflating the winning results of Lottery Drawings gives the impression that "everyone can win". Like the investors who have fallen for recent Ponzi Schemes, both UK and global residents may foolishly believe that they too can win, and will fall victim to ficticious reporting. In this scenerio, innocent people, not only the greedy, can easily be trapped into investing into something they believe is truthful.

What We Found Were
3 Distinct Oddities
the UK Lotto.

This is the disturbing summary of our findings.

The Facts
After each drawing, we record the winning numbers, prizes, number of winners and locations provided by the Official Lottery Websites.

Having reviewed and summarized this is information for the past 4 years, we find that the UK Lotto has averaged 81.75 winning drawings per year (out of 104-105) and that the number of winners reported on the UK Lotto Website each has increased each year, from 181 in 2005, 203 in 2006, 226 in 2007, to 246 in 2008 (see MerseyWorld). This represents a yearly average of 214 winners per year, or approximately 2.05 winners in each winning drawing. In addition, there have also been drawings with multiple winning tickets reported, the highest being 12 on one date. Combining the 6 eights, 2 nines, 4 tens, 2 elevens, and 1 twelve, there were 15 winning drawings that had 8 or more winners. This seems rather high.

By comparison, the Canadian Lotto 649 has averaged about 48 winning drawings per year during the past 4 years. The number of those winners reported were: 63 in 2005, 73 in 2006, 69 in 2007, to 63 in 2008. For 649, the 4 year average was 67, around 1.4 in each winning drawing. Like the UK Lotto, there have also been drawings with multiple winning tickets reported, with highest being 5 on one occasion, and a few fours. Most duplicates were 2 or 3 tickets.

Because the frequency of winners as well as the number of winners in the UK Lotto seems proportionally too large, we will examine additional information such as:
  • How many UK Lottery Tickets are sold
  • Population sizes of the United Kingdom
  • Camelot reportings of winners.
to finalize our judgment in determining whether the UK Lotto reporting is truthful or fictitious.

The UK Lotto Background
The UK Lotto is part of the National Lottery, with drawings twice a week, on Wednesday and Saturday. It is a 649 game, meaning players pick 6 numbers from 1 to 49 which they hope will match the numbers drawn. The game tickets costs £1 each.

In order to win a prize, the player's numbers must match 3, 4, 5, or all 6 of those drawn. An additional bonus ball is also drawn, but it only counts if the player matchs 5 of the 6 numbers.

Since 1994, all lotteries operated in the UK is licensed to Camelot, who was recently awarded a 10-year extension to operate the lottery National Lottery from 2009 to 2019.

Besides operating the lottery, Camelot is responsible for reporting both their lottery drawing and financial results to the UK Government and the public.

When reporting the lottery drawing results for each game, Camelot indicates the numbers drawn, the total amount of the jackpot, the number of winners, and the estimated jackpot for the next drawing. What it does not tell us is:
  • If the number of winners reported is the actual number of single tickets sold, or
  • If it is the total number of people who have a family or some other relationship with the ticket holder,
  • And where the winning tickets were sold.
From the financial new bulletins, we learn that yearly lottery proceeds from April 1 2007 - March 31 2008 was £4,966.3m which consisted of £3856.7 from draw based games (Lotto, EuroMillions, Thunderball, etc).

Semi-annual proceeds ending September 27 2008 (April-September) was £2,559.7m which consisted of £1,974.5m from draw based games (Lotto, EuroMillions, Thunderball, etc).

Oddity #1: Underpayment to Good Causes

Camelot Proceeds Distribution
From various locations in the UK Lotto site and the individual Press Releases, we are informed that Camelot distributes the lottery money it receives as follows:
  • 5% of revenue taken for operating costs
  • 28% for Good Causes
  • 12% paid as lottery duty to the government
  • 50% returned to players in for form of cash payments
  • 5% paid to retailer vendors.
As a test, lets verify the 28% amount of money paid to Good Causes. As stated, Camelot paid:
However, if we do the math, the money that Camelot should have given to Good Causes:
  • £4,966.3m * 28% = 1,390.6 ( yearly)
  • £2,559.7m * 28% = 716.7 ( 6 months )
Thus from the above, we find the amount underpaid, and that Camelot should have given Good Causes:
  • £38.8m more for the 2007-2008 year, meaning that only 27.2% was paid, not 28%, and
  • £27.5m more for the past 6 months, or 26.9% was paid, again not 28%.
So where's the missing money?
Who knows?

We believe that £66.3m is a lot of money. The citizens of the United Kingdom should not be short-changed.

Oddity #2: Inflating Number of Winners

What about the Winners?
Turning our attention to the number of winners reported, we have listed two drawing examples where the National Lottery reported multiple winners, when in fact, the Camelot Press Releases indicated that there was only one winning ticket sold.

Example 1: In the Nov 15 2008 Drawing Lottery Results, Camelot reports that there were 2 winners who received £2,630,225 each. However, the National Lotto Press Release titled Stoke City Fans Score Lotto Jackpot Win describe the husband and wife who together won the £5,260,450 jackpot with one ticket. So in reality, there were not 2 winning tickets as stated, but only one.

Example 2: The National Lottery reports that there were 2 winners in the Nov 19 2008 Lotto drawing and that each received £1,017,166. However, the Camelot Press Release Students Scoop Millionaire Status tell of a young couple who "buy one single Lotto every week". The pair indeed had the single winning lottery ticket which paid a £2,034,332 Jackpot Prize. So while 2 individuals split the winnings, there was only one winning ticket, not two.

But not all individuals are featured by either Camelot or the National Lottery. Take for instance the two drawings:
While both the results page indicated a large number of winners, we have not found 1 press release describing either drawing. In these cases, we do not know how many winning tickets were sold.

Sometimes the National Lottery does not inflate the number of winning tickets. For example, the Winners Gallery features two winners for the 15th November 2008 drawing. One ticket holder is identified as the "Suffolk Lads and Lasses" and the second as Jackie and John Livesley". In this case, the National Lottery's Prize Breakdown for this drawing correctly lists the number of winners as two.

So what can we conclude about the reporting of winners when looking at the National Lottery results?

Basically, all we know is
that at least one winning ticket
was sold, that's it!

From the information reported, there is no way for the public to know how many winning tickets were indeed sold.

And What about the Frequency of Jackpot Winners?
From our Lottery Power Picks site, we find that during the 4 years 2005-2008, the jackpot has been won in 327 of the 417 drawings held, which is 78.4% of the time.

By comparison, the Canadian Lotto 649 has been won in 192 drawings of the 417 held. This equates to 46.0% of the time.

By simply looking at the two percentages, one would think that the UK Lotto is won too often.

But, after researching certain statistics, we believe that these numbers are reasonable that that there is probably no manipulation in the UK Lotto.

We can rationalize the frequency of winners by comparing the differences between the Canadian and UK Lottos, where:
  • the UK Population is 60,943,912 (July 2008 est.)
  • and each UK Lotto ticket costs £1
  • the Canadian Population is 33,212,696 (July 2008 est.)
  • and each Canadian Lotto 649 ticket costs C$2.
Since the Canadian population is approximately 1/2 of the UK, and because each Canadian ticket costs double the UK ticket, it is rational to conclude that More Tickets are sold in the UK per drawing, meaning:

We would expect
the winning Jackpot combination
to be sold more often in the UK
than in Canada.

Since this is indeed the case, we believe that Camelot reports the existence of a winning correctly.

Looking at Average UK Lotto Sales
Since each UK ticket costs £1, the number of tickets sold and the amount of money received is identical. Thus, summarizing the estimated amounts of ticket sales provided on the MerseyWorld UK Lotto website, we learn the average number of tickets sold for:
  • Saturday drawings is £35.5m (for 2008: £33.7m; 2007: £33.7m, 2006: £36.2m; and 2005: £38.3m).
  • Wednesday drawings is £19.4m (for 2008: £18.6m; 2007: £18.6m, 2006: £19.3m; and 2005: £21.0m).
Combining both the Saturday and Wednesday drawings, a total average number of tickets sold is £27.4m per drawing.

What's important here is that the average sales for both the Saturday and Wednesday drawings exceed the absolute number of possible combinations, which is 13,983,816. For Saturdays, more than 2.5 times the number of combinations is played. On Wednesdays, slightly less than 1.4 times the combinations are played.

Since all ticket sales exceed the available combinations, one would think that the winning combination would always be sold. But, this is not the case. Of the 52 available Saturdays drawings each year, there are 6 to 7 drawings which produce no winner. For Wednesday, approximately 22 drawings fail to produce a winner. This means that "a lot of duplicate tickets" are sold.

While we don't have the information available, it would be interesting to know the breakdown between player and quick-pick selected numbers.

Oddity #3: Underfunding Jackpots

Prize Allocation Oddity
The allocation of monies paid into to the players fund is also ambiguous. The National Lottery page How are the Prizes Calculated states that "at least 45% of the draw sales are allocated to the Prize Fund", and that "52% of the Pools Fund" is allocated to the Match 6 main numbers. Using these percenatages, we find that:
  • For average Saturday sales of £35.5m, £8.3 million would be allocated to the Match 6 prize.
  • For average Wednesday sales of £19.4m, £4.5 million would be allocated to the Match 6 prize.
  • And, for the combined drawing average sales of £27.5m, £6.4 million would be allocated to the Match 6 prize.
However, this is not the case. Because we retain the announced prize offering for each drawing, it is possible for us to calculate the the average Jackpot actually being offered to the UK Lotto players.

For the past 4 years,
the average Jackpot was only £5.0 million.

This is £1.4 million less per drawing
than advertised by the rules!

To further confuse the allocation, Camelot's Earnings Reports state that: "50% returned to players in for form of cash payments". Assuming that 52% of this amount is still allocated to the Jackpot price of Match 6, we calculate that: £9.2m is paid back on Saturdays; £5.0m on Wednesdays; and £7.1 paid on the average combined drawings.

So, Who Should We Believe?
Camelot or the National Lottery?

These questions are hard to answer since they are both one in the same, and neither agrees with itself.

In either case, we believe that
Camelot failed to pay back
the players approximately
£146 million per year!

Why do We Care?

Concluding Remarks
There are several reasons that we care about the misrepresentations stated by Camelot regarding the UK Lotto. We believe that:
  1. Governmental operators of all lotteries should properly and accurately disclose the conditions and distributions of the lottery proceeds.
  2. There should be no false advertising.
  3. Failure to fund or pay stated distributions, whether it be to the players or the Good Causes, is criminal.
  4. Inflating the number of winning tickets is not only misleading, but presents the pretext of Fraud. Players are given a false sense of opportunity when one does not exist.
In addition to the above, the actions by Camelot should be examined by all players throughout the world. Remember, Camelot is proposing a new: World Lottery. Why should we ever want to give this organization money that they will never return!

And, to Legislatures in the United States who are considering Privatizing their State Lotteries, we urge them to take a close look at the risks of Licensing their operations. There is a lot of money at stake, and we cannot simply "Trust" that the operator is doing the right thing. Monitoring these operations should be continuous and would be very expensive venture!

Learn More
To learn more about this subject, visit and explore the official sites from which we extracted much of our data.

Focus for April 2009: A Look Back at the January '09 Powerball Changes

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Monday, February 16, 2009

January Entrecard Droppers

The following is the list of our Top Entrecard Visitors during the month of January 2009.

Jan Top 10
* * My note's31
* Gadget Spot31
* Mommy's Little Corner31

Anything Goes W/ Pahn

Retro Yakking31
* * BMWF1Blog31

my review31

Basketball Daily31
* moms..... check nyo31
* iWalk,U2?30

Note: The red asterisk indicates the number of previous months
this visitor was a Top Dropper.

And, Very Special Thanks to:

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Thank-you all once again!

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