diamond geezer

 Sunday, October 22, 2017

The winning number in last night's lottery was 649058. Were you a £25000 winner?

That's the Barking and Dagenham Lottery, a brand new initiative to raise money for good causes, and the first weekly lottery undertaken by a London council.
Councillor Saima Ashraf, Deputy Leader and Cabinet Member for Community Leadership and Engagement, said: "Despite ever-increasing financial pressures on local authorities, we are determined to find innovative ways to continue supporting good causes that benefit residents in Barking and Dagenham. We hope that this scheme could mean some groups receive thousands of pounds of local money."
To enter you go online and select a 6-digit number, or as many 6-digit numbers as you like, then pay £1 a week for each. Then every Saturday evening a random 6-digit number is selected and if you match it you win £25000. There are also several smaller prizes for matching digits at the beginning or the end of the chosen number.

A key selling point is that you get to choose which local good cause gets your donation. You could pick the Chadwell Heath Community Centre. or Nia Huggett Women's Centre, or Wellgate Community Farm or the 18th Dagenham Girl Guides... or you could nominate your money to Barking and Dagenham's central charity pot. You don't have to be resident in the borough to take part.

A brilliant fund-raising idea, or a desperate grab for cash? Let's see.

Issue 1: You're very unlikely to win.

Here's the prize structure, as it appears in the B&D lottery FAQ.

According to the FAQ, your chances of winning a prize are 1 in 55, or roughly once a year if you play once a week.

But your chance of winning a cash prize is only 1 in 500, or roughly once a decade if you play once a week. That's because most of the 'prizes' handed out are 3 free tickets for a forthcoming draw, which almost certainly aren't going to win a cash prize either. If you keep reinvesting those free tickets in future draws the chance of a cash prize rises fractionally, to 1 in 491, but these are still really rubbish odds.

As if to prove the point, nobody won a £25000 prize in Saturday's draw, nor a £2000, nor a £250. Three people won a £25 prize. Ten people won three extra tickets. Altogether the Barking & Dagenham Lottery paid out £75. This is not a brilliant way to get rich.

Issue 2: It's a bit complicated to understand.

Matching the drawn number to win £25000 is easy to understand, but the remaining prizes are less so because position matters. For example, if the winning number is 123456 then you'd win £2000 for 123459, £250 for 993456, £25 for 123999 and '3 extra tickets' for 999956. But there are no prizes for 654321, 912345, 923459 or 456999.

It's not cripplingly difficult, but enough to confuse a significant proportion of the population... although that might still not put them off, particularly if their eyes are fixed on the jackpot prize.

Issue 3: It's an Australian lottery in disguise.

Barking & Dagenham council don't draw the winning number themselves, and neither do their contractors, Gatherwell. Instead the six-digit winner comes from the Australian National Lottery's Super 66 game, a weekly draw which operates using identical rules. This provides the B&D Lottery result with independent validity, although residents of Chadwell Heath may not be chuffed to discover that the winning number originates Down Under.

It also looks mighty dubious that Barking & Dagenham reveal the winning number each Saturday at 8pm, whereas it was actually drawn at 7.30pm AEST, over ten hours earlier. But all's well because the B&D Lottery has a cut-off point of 23:59 on Friday, so players entering the draw on Saturday aren't eligible to win a prize until the following week.

Issue 4: People don't seem to be very interested.

The B&D Lottery's Twitter account has only 17 followers, one of which is the council itself, so local residents don't appear to be very enthused. Confirmation of this comes from the fact that only 587 tickets were sold in time for Saturday's inaugural draw, which is a measly total. Indeed Barking & Dagenham has a population of just over 200,000 people - about the same as York or Gateshead - and 587 tickets equates to a mere 0.3% of the population.

But never fear, because the council weren't expecting their lottery to be an enormous hit. They've set themselves a target of 735 tickets, just 735, and they've nearly hit that in week 1. That said, tickets for the first draw have been on sale since mid-September, so if 587 is the best they can do over a lengthy launch period, getting additional players to sign up might be a real struggle.

It's also important to remember that, unlike in the National Lottery, ticket sales don't affect the odds of winning a prize. The council have taken out insurance to pay the larger prizes, so even if they only sell 500 tickets a £25000 win would still be paid out. The insurers are probably laughing, however, because with these low sales a £25000 win should only happen once in every 32 years.

Issue 5: It isn't raising much money.

A major selling point of the B&D Lottery is that 80% of all cash taken goes to prizes and good causes - the National Lottery manages only 78%. Here's how each £1 raised breaks down.

50p from every £1 goes to the good cause of your choice and 10p to the B&D charity pot, while 20p notionally goes on prizes, if there are any. As for the 20% on "admin and VAT", a bit of digging reveals that VAT on lottery sales is charged at 12%, which means the administrators (Gatherwell) are taking 8p a ticket.

Because we know how many tickets were sold in the lottery's first week, we can calculate how much money has gone where so far.
Chosen good causes = 50p×587 = £293
Other good causes = 10p×587 = £59
Prizes = 20p×587 = £117
VAT = 12p×587 = £70
Admin = 8p×587 = £47
Thus far the lottery has raised £352 in funding for good causes which wouldn't otherwise have been received. Shared out between the 20 or so charities currently in the B&D basket equates to £17 each, assuming everybody gets the same. Peanuts? Or potentially £18000 a year, all told, if this works out.

Issue 6: It's an inefficient way to donate money

Normally, if you want to donate £1 to the Dagenham & Redbridge FC Community Trust, they receive £1. They might even get a bit more if you sprinkled a bit of Gift Aid on top. In this case, however, you donate £1 and they get 50p, while 40p basically disappears, in the vain hope you might win a life-changing amount of money... which you won't.

Wouldn't it be better to establish a system for donating direct, and promote that, rather than dressing everything up in a lottery and sharing less. Or do we as punters only respond to the possibility of a big cash prize, and would never have considered giving the money in the first place otherwise? Might the B&D Lottery work better if rebranded as "donating to charity with the chance to win a prize", rather than "the chance to win a prize while donating to charity"?

The Barking and Dagenham Lottery might grow to success, or it might be an insignificant well-meaning failure. But the key question surely has to be why council funding has slumped so low that a lottery looks like a good way to make a difference. When you can't raise taxes to fund the needy, shake your balls.

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