Suspension affects more people than any banking crisis in 10 years
THE PLANS OF MILLIONS of South Africans to save for their retirement, pay for their kids’ education and to buy new houses and cars have been dealt a severe blow. No, interest rates haven’t been increased and there are no problems at another “asset manager”.
It’s even worse. The weekly Lotto draws have been stopped and those cute little coloured balls have been locked away until our politicians can decide which of their pals can be awarded the contract and the millions to run a computer system and short television programme each week.
If they don’t solve the problems quickly George will have to continue working until he’s 65, be satisfied with second-hand cars and never be able to lounge around on a 46-foot Bavaria in the Caribbean. The same goes for the millions who queue on Wednesday and Saturday afternoons at corner shops in SA to buy their Lotto tickets.
It’s crazy – but the mess concerning the lottery affects more people than any crisis we’ve seen in the banking sector over the past decade. According to the latest annual report of the National Lotteries Board, more than 6,3m lottery tickets are sold every week. And nobody has yet complained about the cost or bad service.
SA spent more than R4,1bn on Lotto and LottoPlus tickets in the year to March 2006 on the slim chance of becoming an instant millionaire. The most that’s been wagered on a single draw was R116m, which pushed the jackpot to more than R34m.
Within those figures lies the truth concerning the lottery. The chance of winning is small, very small. In fact, it’s madness to spend almost R4,2bn on the chance of becoming one of the 115 people who won more than R1m last year.
The total paid to winners that got six number right in the year to March 2006 was R355,8m, with an average payout of R3,1m. The biggest winner in 2006 received R34,2m and the lowest R442 000. The lowest payout to date was when 33 winners all got six numbers right on 15 March 2005 and had to share the jackpot. Each got R111 000.
It still seems a lot of money to win for paying just R2,50 for one line on a ticket. However, the question remains: Is it worthwhile to spend R4,2bn to try to win one of those R3,1m prizes. It seems that there’s truth in the saying that a State lottery is a voluntary tax paid by mathematically challenged people.
Statistics prove that it’s almost impossible to pick six winning numbers. There are more than 13m combinations to pick six winning numbers from. To be precise, you’d have to buy 13 983 816 lottery tickets to cover all the possibilities. One ticket would give you a 0,00000715% probability of winning the jackpot. And 1 000 tickets at R2,50 each – at a cost of R2 500 – would increase your chances to 0,00715%. Still pretty close to zero…
The chances remain exactly the same every Wednesday and every Saturday. It makes no statistical difference if someone plays the same set of numbers week after week or tries different numbers. The number of times a specific little ball gets blown into the winning set also makes no difference. It’s all in the statistics formula learnt in Stats 1 at varsity.
The possibility of picking five numbers and the bonus number right is much better, because we use seven numbers from 49. The probability of winning the second jackpot is thus much better at one in 2,3m, but the prizes are much less.
Statistics also offer the opportunity to see that the Lotto stays honest, because over the longer-term there can’t be more winners than is statistically possible.
However, there are good ways to make money from the Lotto. The first method can be found in all the mathematical programmes that promise to choose the winning combinations in any lottery worldwide. The Internet offers hundreds, all with several letters from satisfied clients saying how much money they’d won in the two weeks since they invested a few dollars in the programmes.
No, don’t buy one of those. They’re useless and can’t alter the statistical facts. The way to make money is to sell some system to gullible punters.
Another definite way to make money is to win the contract to manage the Lotto. The contract is worth more than a month’s worth of prizes.
In the year to March 2006, total sales of Lotto tickets was R4,18bn, of which R2,06bn was paid out as prize money and R1,27bn transferred to the National Lottery Distribution Fund Trust for allocation to charities and other organisations that apply for funding.
That left R900m, from which Uthingo (it has managed the Lotto since is inception) would have to pay operating costs, make a profit and pay its taxes.
That’s the prize players were vying for in court. Uthingo’s licence lapsed at end-March and the Gidani consortium was awarded the contract. Other tenderers, citing that proper procedure wasn’t followed and alleging that several high-ranking ANC members held shares in Gidani, contested that.
The court ruled that the Minister of Trade & Industry hadn’t investigated the shareholders of the different bidders properly. Consequently, the ministry was ordered to review the process – which left SA without a legal lottery operator.
Those wishing to prove statistics wrong are likely to visit casinos. Among the losers in the battle are SA’s smaller retail outlets, where more than 50% of Lotto tickets are sold every week and where punters would also buy chocolates and cigarettes. Why only have one vice? And then there are the charities, which will have to make do with only 11 months’ worth of distributions.
It makes no statistical difference if someone plays the same set of numbers week after week or tries different numbers.