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Lottery sham: You don’t win big because DLB plays ball with probability games
Wonder why you never win big–or even decently–at the lottery? One reason is that the Development Lotteries Board (DLB) prints a strikingly smaller number of tickets for each draw than is required on the basis of the number of balls in the draw machine.
This means the probability of there being a winning ticket in your hand is minimal, the Auditor General’s Department has said in an explosive new report available on its website. It also found significant drawbacks in the DLB’s conduct of the lotteries. For instance, there was no evidence that the number of balls in the draw machine is verified or their quality inspected before each edition.
The DLB operates in a duopoly. The other player is the National Lotteries Board (NLB), which the Auditor General said was run better. The DLB generates income for the President’s Fund for remittance thereafter to the Mahapola Higher Education Trust Fund.
The Auditor General looked at reports that public confidence in winning was lost. In recent years, there weren’t enough prizes being scored. And the draws typically extended into many weeks without anyone clinching the first or super prize.
Data and trends predominantly between 2012 and 2013 were examined. The Department found that the DLB printed a “lesser number of tickets” than what was required in relation to the number of balls used in each draw. It placed more balls in the draw machine than is needed in relation to the number of tickets available for sale. And there were counterfeit tickets in the market because of a lack of proper security codes. This showed “improper” management control over the draw process, it said.
DLB is under the aegis of the Government. The Board is, therefore, obliged to implement a prize formula that improves the welfare of the poor and lower middle classes who are the bulk of its customers.
But its sole objective appears to have been generating and increasing its own income, the Auditor General holds. There is growing public opinion that DLB customers do not receive prizes commensurate with monies set aside for the purpose.
The audit examined the conduct of 11 DLB lotteries. These include Saturday Fortune, Lagna Wasana, Jayoda, Galaxy Star, Niyatha Jaya, Super Ball, Kotipathi Shanida, Dasa Lakshapathi, Development Fortune and Ada Kotipathi. They used attractive taglines like “as reliable as the rising sun” and “brimming over with money”. This gave customers reasonable hopes of good wins.
The Board of Directors decides on the quantity of tickets to be issued for each draw in the different lotteries based on the number of balls in the machine. Thus, between 4,774,770 and 31,601,700 tickets should have been printed in respect of the 11 lotteries.
But only between 340,000 and 1,445,000–or between 0.88 percent and 14.85 percent of the required number–was printed during the period under examination, the Auditor General states. The probability of winnings tickets not being subject to a draw or even printed is, therefore, between 85.15 percent (for Lagna Wasana) and 99.13 percent (for Saturday Fortune).
And between 86 percent (in Dasa Lakshapathi) and 99 percent (in Saturday Fortune) of lottery tickets are either not subject to a draw or remain unsold as a percentage of the average of the total number of winnings.
The number of balls in the draw machine generally necessitates the printing of a massive number of tickets for each edition of a lottery. The various lotteries use different quantities. Some have 68 balls and 26 alphabets; 61 balls and 12 zodiac signs; 75 balls, 71 bonus numbers, and 26 letters of the English alphabet; 65 balls and 06 super numbers, etcetera.
Therefore, a formula is used whereby the required total is divided by 26 or 12. This is treated as the ticket allocation in respect of each draw. But a fewer number of tickets were printed even out of this allocation.
For instance, in edition 84 of Kotipathi Shanida, the allocation was 1,581,580. The permutated number 41,121,080. But just 390,000 tickets were printed. In edition six of Ada Kotipathi, the allocation was 1,215,450. The permutated number of tickets was 31,601,700. Only 420,000 were printed.
In every edition examined by the Auditor General, this trend was observed in varying percentages. But the prize formula submitted for Director Board approval was designed on the basis of ticket allocation–not on the number of printed tickets.
Chances of winning the first, or super, prize are exceedingly low, the Auditor General finds. As such, these are repeatedly rolled over. One strategy to increase sales has been to pad up the super prize. But the number of wins was “extremely less as a large number of lottery tickets had not been printed”. This meant there was no corresponding disbursement of benefits among customers.
The Director Board has instructed that 46-50 percent of sales income should go towards prizes. Fourteen percent is set aside either for the first or super prize but only 0.0004 percent of those prizes had been scored. Also, rewards of between Rs 20 and Rs 200 usually return as Board income in a cyclic manner.
Six months from the date of determination of winners in a development lottery, any prize not awarded is “by reason of the fact that such person is not to be found” forfeited and credited to the President’s Fund. As a result of the Board failing to find winners from January to October 2017, Rs 285,250,760 was sent to the Fund.
The Auditor General’s Department did a market survey to determine public views of the prevailing lottery system. There was a marked lack of trust and confidence. They also preferred more prizes of between Rs 5,000 and Rs 50,000 along with sums of Rs 2,000, Rs 1,000,000, Rs 500,000 and Rs 100,000 rather than repeatedly rolling over the main prize so one person gets a huge amount.
The Auditor General analysed the remittance of monies to the President’s Fund through lottery ticket sales between 2012 and 2017. While sales income had risen between 2012 and 2014, nineteen percent of this was sent to the President’s Fund.
In 2015, sales income jumped to Rs 12.28bn but just 14 percent was remitted. This gradually dropped to 12 percent despite income further rising to Rs 15.3bn in 2016. In 2017, sales income was Rs 14.62bn. Of this, Rs 437mn was remitted to the President’s Fund—that is only three percent. There is no follow-up on whether relevant contributions are thereafter sent to the Mahapola Fund.
The Board has failed to formulate rules under the Development Lotteries Board Act of 1997 to establish a strict administration relating to the drawing of lotteries. There was no audit before and after the draws, the draw itself and the release of results. There was no auditor supervision of 961 editions in 2017.
But the NLB, the DLB’s rival, had auditors to inspect the sealed sacks of balls. They supervised the opening of these sacks, the functioning of the draw machines, the insertion of balls into the machine, the sealed sacks after the edition’s end, the accuracy of the weight of balls and recording of draw result. They also signed documents certifying their participation.
The Auditor General has called for a “proper methodology” to introduce new lotteries to the market, to determine the number of balls inserted into the draw machine for each lottery, to decide the number of tickets to be printed per draw as well as the number of draws to be held and the structure and percentage of prizes.
The Board should design a prize structure with recommendations from a qualified “prize structure committee” that uses criteria enabling benefits for the public. There should be a broader distribution of prizes rather than a maximisation of the super prize.