You'd be lucky to win a tenner!

May 25, 2002 2:04 AM

You'd be lucky to win a tenner! Words of UK Lottery CEO Dianne Thompson to an annual dinner at the Chartered Insitute of Marketing. Thompson was previously director of marketing at low-cost high street jewellers Ratners, whose chairman famously turned a £127m annual profit into a £122m loss practically overnight with the immortal words "our merchandise is total crap." Could this be the end of the road for Lotto?
posted by dlewis (28 comments total)

I doubt it: Camelot have always been lousy at marketing - the whole country was backing Branson last time the license came up for renewal, but people are still buying tickets (less of 'em, I'll grant you). As a monopoly player though (no pun intended), they're not in the same boat as Ratners. Having said that, I actually think that they've handled the rebranding pretty well, after an unpromising start.

I'd be interested to see what analyst expectations were of the financials of Camelot right about now: a drop in public interest after 10 years or so sounds pretty reasonable to me.

Now, if she'd called it "a tax on stupidity..."...
posted by bifter at 3:35 AM on May 25, 2002

She may as well have said "It's a people tax. We tax people for being poor. We tax peoples' dreams and aspirations. The poorer they are, the more hopeless their existence, the more likely they are to enter the Lottery, an irony which is not lost on us, seeing as we're the ones getting richer and they're getting poorer with every pound spent."

Personally I would like to see the jackpot being far lower but with more winners. Imagine if hundreds of thousands of people got to win 'just' £20,000 each. That would really change things in this country.
posted by skylar at 4:58 AM on May 25, 2002

From the number of times I've described the odds to my Dad, and he's responded with "you won't win if you don't enter", I suspect the lottery has a bright future.
posted by vbfg at 5:18 AM on May 25, 2002

Premium bonds offer those kinds of returns, skylar. And you get your money back at the end. But no-one is buying them anymore.

Lottery is successful because of three things: the obscene prize; the fact that the big hand blesses only one (well, sometimes two); most important of all, the fact that your personal "lucky numbers" are involved.

Only this logic can explain phenomena like the Lottery Extra game. A game where, instead of buying another ticket for the main game and hence doubling your chances on the top prize from an outside 14m-to-1 to a dead-cert 7m-to-1, players instead opt to pay the same amount of money to have a chance at winning a substantially lower prize. Why? Because they can use their lucky numbers twice.

I never started buying lottery tickets. My mum gave me one piece of advice on this subject: "never, ever, buy a ticket with your lucky numbers on it. If you do it once, you'll have to buy them for life."
posted by dlewis at 5:27 AM on May 25, 2002

Skylar

Personally I would like to see the jackpot being far lower but with more winners. Imagine if hundreds of thousands of people got to win 'just' £20,000 each. That would really change things in this country.

Problem is that you'd probably get better odds for similar winnings on a six-way accumulator with the gee-gees or football scores (was just about to mention premium bonds too, but just saw dlewis on preview...).

I think part of the problem is that the lottery has to be very carefully positioned so it can't be seen as government-sponsored gambling. Unfortunately small pots and realistic odds are two things which would do that, so they steer well clear.

I really wish I could find the link, but I was reading something recently about the human minds process of risk/odds assessment: in summary, we're not very good at it. Most people put a huge amount of credence in anecdotal evidence - far more than is justifiable in terms of the actualities of gain or loss. The article was talking about the MMR vaccine, and the relative odds of injury compared to the risk of serious brain damage from measles, but the message was fairly universal. In the case of the lottery it shouldn't be too unreasonable to assume that people wouldn't see too big a difference between the odds of winning a "paltry" £20,000, and the odd of winning a Spanish-style "el gordo" of 10s of millions of pounds. The difference in attractiveness is very clear however. So probably a non-starter from the commercial perspective...
posted by bifter at 5:34 AM on May 25, 2002

Not exactly the article bifter mentioned, but this one is about how people aren't very logical about money. Not that I didn't already know that. (Not that knowing that has helped any.)
posted by idiolect at 5:40 AM on May 25, 2002

I always remember reading an article called "Getting the Goat" in the Economist a few years back. That's the first time I ever heard of the famous Monty Hall puzzle Unfortunately I can only find this PDF, but it's a good read.
posted by dlewis at 5:45 AM on May 25, 2002

idiolect--that's a terrific article. Now my irrationality begins to make sense...
posted by Badmichelle at 6:22 AM on May 25, 2002

Just get Billy Connolly and his pathetic coloured beard off my TV, that's all I ask.
posted by Summer at 6:50 AM on May 25, 2002

They need to work out a system that has you playing against other people: when you win, you palpably defeat other people; when you lose, you know which bastard got your money. And keep the competitors geographically close. Then people would play like fiends, develop rivalries, rob and kill big winners, etc. That's television.
posted by pracowity at 6:54 AM on May 25, 2002

Bifter, you make a fair case about the Government not wanting the Lottery to be perceived as state-sponsored gambling - but basically that's exactly what it is. And I think your reasoning is somewhat defeated by the proliferation of scratchcard games, which are arguably the most addictive of all.

I disagree with all those people who give reasons why smaller-sum gambling (eg premium bonds) is less popular. The main reasons those games are less popular than the Lottery is that the games are more complex and their marketing is much worse. Lotto is on every high street, in Post Offices, petrol stations, supermarkets etc. It has had numerous TV shows, all trying (and failing) to hide the fact that they are a tarted-up advert for the National Lottery.

Personally I have used the scratchcards several times just because the odds are better. Most people don't "need" £4 million, but £20,000 would get them a deposit on a house, a few holidays and a car. I can't believe no-one else has followed this line of thinking.
posted by skylar at 7:34 AM on May 25, 2002

pracowity: you need to work that into a novel. Or at least a screenplay. Seriously. The BBC'd buy it.

The lottery is an evil tax-on-the-poor that I can just about tolerate, because for all the fuss about the Royal Opera House, you can see the impact of lottery money on public parks and museums and playgrounds; scratchcards, though, are poison: crack to the lottery's coke. They fire the same neurones as slot machines or roulette wheel.

(It's funny, though: people near the Irish border buy lottery tickets on both sides. The Republic's lottery has lower odds; the UK's has higher prizes.)
posted by riviera at 8:03 AM on May 25, 2002

Skylar - yeah, point taken. Scratchcards are fairly controversial anyway though, and I just can't see them building on the precedent they set for impulse-gambling if they can avoid it.

One thing that we've not discussed at all is the "good causes" aspect, which I suspect we probably both agree is largely bullshit, but which I can imagine provides enough of an impetus to make some waverers decide to play. The same reason that yer granny always used to buy premium bonds for your birthday I suppose...

I think the reasoning on the smaller prizes tack is fine, the problem is that you can only really follow it from the "altruistic" perspective (if such a thing exists...) of the government/lottery: from the perspective of many players the odds of even winning £20k are unimaginably low - its hard to differentiate between that and the big millions. Like it or not, the lottery (albeit regulated) is a private concern: I'm sure they've done their market-research, and the way they have been, and continue to be, structured tends to suggest its told them to offer large prizes. There isn't too much the government can do about that...
posted by bifter at 8:12 AM on May 25, 2002

Whoops - looks like we *have* discussed the good causes aspect...
posted by bifter at 8:13 AM on May 25, 2002

Premium bonds offer those kinds of returns, skylar. And you get your money back at the end. But no-one is buying them anymore.

I think that's a marketing issue - I had no idea you could get anything remotely like 20,000 times the money you put in to bonds. (I don't know anything about investing, by the way, though I did get a catalog of mutual funds last year - never invested b/c I was laid off shortly thereafter). I guess the other part of it would be instant gratification - if it takes 30 years for a bond to mature it's of more use to your kids etc.

But if they did smaller prizes with reasonable odds i'd probably play the lottery every now and then. I certainly never do now.

And of course it's state sponsored gambling - who would try to deny that?
posted by mdn at 8:35 AM on May 25, 2002

There is a conspiracy theory surrounding Lottery prize amounts that hasn't yet been raised. A friend of mine suggests that the Government would prefer there to be a handful of new millionaires every year rather than thousands of nouveau-riches. Something about unbalancing the equilibrium of rich versus poor. Thoughts?
posted by skylar at 8:49 AM on May 25, 2002

skylar

There is a conspiracy theory surrounding Lottery prize amounts that hasn't yet been raised. A friend of mine suggests that the Government would prefer there to be a handful of new millionaires every year rather than thousands of nouveau-riches. Something about unbalancing the equilibrium of rich versus poor. Thoughts?

Nah... they'd be trying harder to control house prices otherwise: I've made more than £100k in three years so far off the back of my first house purchase, then aged 24: a shitty three bedroom terrace near the Hoover Building in Perivale. Just think how many people are in the same (or better) position at the moment. Certainly many more than would be represented by a few thousand £20k prizes each year...
posted by bifter at 8:53 AM on May 25, 2002

And of course those who receive insanely collossal amounts of money very suddenly are more likely to overdose on luxury a la Viv Nicholson, thus "proving" that money does not bring happiness (although it may stave off rickets).
posted by Grangousier at 8:57 AM on May 25, 2002

mdn - premium bonds are a British government thing. Basically you "lend" them money, for which they issue a bond that you can cash at pretty much any time. Every month the aggregate interest of *everyones* bonds are put in a prize-fund and they have a draw to decide how gets the distributed loot. It's a kind of nanny-knows-best lottery where you don't actually lose your investment: just the hypothetical return that you could have made on it... I'm not actually sure what the top prize is these days, but its very possible that a 20k* return is possible as you stand a slim chance of winning the top prize with a single bond...
posted by bifter at 9:02 AM on May 25, 2002

PS "how" = "who"
posted by bifter at 9:02 AM on May 25, 2002

Bizarrely enough, I think the expected rate of return on Premium Bonds is actually as good as most other safe investments, at least for higher rate taxpayers, because the prizes are tax-free. So it's not really gambling...even though the top prize each month is £1,000,000.
posted by Gaz at 9:29 AM on May 25, 2002

My granny was right! Hooray for premium bonds!
posted by bifter at 10:55 AM on May 25, 2002

So it's not really gambling...even though the top prize each month is £1,000,000.

how much does it cost to "enter"? If it's affordable I don't see why people wouldn't enter - all you're losing is the potential interest that money could make if you invested it more traditionally. Sounds like a good idea, a smarter lottery... I'd probably give it a try. Though until you can buy them at the corner store, I'd bet there'll be a lot of people who mean to do it who simply don't get around to it, like me and my mutual fund plan.
posted by mdn at 10:56 AM on May 25, 2002

Mdn: all you ever wanted to know about premium bonds, right here.

They're really pathetically marketed by the way, which is probably why hardly anyone buys them. I'd totally forgotten about their existence until today. The only place you can buy them is the Post Office too, which doesn't help - requiring as it does a 2 hour queue of shuffling old ladies wanting to talk to the cashier about the price of Hovis.
posted by bifter at 11:08 AM on May 25, 2002

Well you can actually buy them by sending off a cheque therefore avoiding the Post Office.
posted by Saima at 1:07 PM on May 25, 2002

Saima

Well you can actually buy them by sending off a cheque therefore avoiding the Post Office.

And where do you get the stamps hmm...? The Post Office always gets you in the end... ;-)
posted by bifter at 1:18 PM on May 25, 2002

Actually, you can now buy them over the phone too, and (soon) from this site.

Wow, I sound like a shill.
posted by Gaz at 3:30 PM on May 25, 2002

It's a pity that 'National Savings' has kind of gone by the wayside in the mass deregulation of banking in the UK. I suspect that even now, the NS investment account -- the old 'post office account' -- pays better interest than most banks. And yeah, Premium Bonds are a good thing.

As for the 'good causes' argument: well, I can wander off to the nearest small park, and see a basketball hoop that was financed by the sporting bit of the lottery fund, and see improvements that the council neglected until the lottery fund kicked in. I do wonder how much of the big projects' money really benefits the public: lord, the Dome was bad enough, and how much lottery money was the idiotic Wembley project marked down for? And of course, Orwell was right about the Lottery in 1984. I half-suspect, even to the point of the govt. inventing the big winners....
posted by riviera at 5:09 PM on May 25, 2002