Are bookies or prize bonds a better bet than the Lotto?

It could be you….if you wait 51,442 years

We crunch the numbers on our national obsession of 'doing the Lotto' and show how to tweak the odds in your favour.  

My dad has been entering the same numbers in the Lotto twice a week since 1983.

So when he had to cocoon in the lockdown this summer and couldn’t get to the shops, I offered to do it for him online. 

I was surprised at the cost.  I thought it was negligible. But at €2 a line and with a minimum of two lines per draw, it costs €8 a week, or around €35 a month. Add on another €4 a week if you add in Lotto Plus. 

If you did it for 37 years like my dad, you would part with just over €15,416 in cash, which would be a very nice sure fire ‘win’ to have if you had simply put the money away in a drawer.

But if you invested the money and earned an average 5%-per annum return, you’d have over €47,576 thanks to the magic of compound interest.

Put it in your pension, with tax relief and matching employer contributions, you could more than double that again. 

But pensions are boring. The Lotto makes your dreams come through. And apparently this involves buying a Ferrari (the typical car players dream of buying, according to the National Lottery)  and living on biscuits and crisps on exotic islands as the ads portray the life of winners. Neither would appeal to my dad, apart from, possibly,  the biscuits. But each to their own dreams.

Doing the Lotto appeals to basic human psychology, the irrational optimism that makes us get out of bed every day; the notion that it indeed might be us, even though we know deep in our hearts that it almost certainly won’t.

This is the reason over half the population makes this dubious “investment” every week, while less than half have a pension (and those that do have one are usually put in it by their employer).

All my dad had to show for investing €15k, apart from a few tenners, was his biggest prize yet - €42. 

But there’s always the chance that “it could be him.” 

One week my heart pounded when I got an email to say he’d won a prize and initially thought “it was him." 

Whoohoo!, I thought (rookie mistake).

I checked online. He had three numbers in the Plus1 draw. 

OK, so it wasn’t a jackpot but the odds of picking three numbers out of seven are 54/1. You’d expect a decent sum.

The prize was…..drumroll…. €3.

Oh come on! 

After 37 years, this is all you get?

I decided to crunch the Lotto numbers myself. How good – or bad – are the odds? And would my father be better off betting with the bookies or buying prize bonds?

My €3 payout was a bit low even for the Lotto. That’s because it was a Plus 1 draw on a bad week when there are were a lot of winners. Normally, three numbers pay out €9.

There could be another reason for that low payout.

Most online Lotto tipsters go on about “hot” or “cold” numbers, i.e. numbers that have come up most or least in the past. 

Some people seem to think that because a number hasn’t come up much it will do in the future – and some take the opposite view, picking numbers that come up a lot.

Both notions are pure nonsense, known as ‘gamblers fallacy.’ 

But there are ways to, if not beat the system, to tweak the odds a bit in your favour or at least not to tweak them against yourself.

My dad’s numbers, like a great many people’s, are family birthdays. But there are only 12 months in a year and no more than 31 days in a month. And so more people pick numbers lower than 31 by far than any other numbers.  

You’d be better off not picking birthdays and going for numbers over 31 instead. They have just as much of a chance of turning up as any others – and if they do you will get a bigger payout.

Likewise, you’d be better off buying Lotto tickets in rollover weeks and especially big rollover weeks because there’s a bigger sum to share out among a similar number of people.

Your chances of winning a prize will be the same but if you do win, even smaller prizes, you’ll have to share with an awful less people and get more.

Is that why my dad’s payout for three numbers was a miserly €3?

Lotto vs The Bookies

Paddy Power Lotto odds

Correct numbers 

1  6/1

2  60/1

3. 700/1

4 7200/1

5 130,000/1

Would my dad be better off with the bookies?

At first glance, the bookies seem to offer way better odds than the Lotto.

Paddy Power offers 700/1 on picking three numbers, 

That would pay out €2800 on a winning €4 bet. 

But it’s not that simple. You only get three shots at picking the three numbers, which is much harder than picking three out of six.

Even so, you’d still have a better chance of winning with the bookies.

They generally pay out 74% of bets in winnings, while the National Lottery pays only 56%*.

If you placed two €4 bets on three numbers at 700/1 twice every week, you could expect a €2,800 payout nearly once every six years. 

Not exactly a life-changing sum but a lot better than waiting 51,442 years for a Lotto jackpot. 

If you want a life changing sum, go for five numbers at odds of 130,000/1.

So bookies do offer better odds and a more realistic chance of winning decent prizes.

But, of course, people just want a life changing sum and would be equally ecstatic with €1m as they would with €18.9m (the maximum jackpot). 

* 30% of what you spend on lottery games goes towards what the National Lottery defines as “good causes” .

These are in the categories of sport, arts, culture, heritage, community, health, youth and Irish language. Details can be found on Lottery.ie.

Return on your investment*

Prize bonds

100.5%

Best bank deposit

100.3%

Bookmaker bet

74%

Lotto 

56%

· How much of your money you get back on average every year

Lotto vs Prize bonds

There is a way to combine the chance of winning a million with keeping all of your money intact:  prize bonds.

Prize bonds have an even tinier chance of winning than the Lotto. There are two x €1 million euro draws twice a year and lots of smaller weekly prizes.

However, unlike the Lotto, you’re not only competing with everyone who bought a prize bond in the past few days but everyone who ever bought a prize bond ever (and still has it).

Last night’s Lotto jackpot was heading in the direction of €8m. The odds of winning were still one in 10.7m. But the prize bond fund was around €3.4bn last year, which means 700 million prize bond numbers are in the draw. That’s 700 million-to-one odds twice a year for the million euro prizes!

There are lots of smaller prizes but I’ve never won one yet and I’ve had a prize bond given as a present since the 1980s. Admittedly, this was only one single prize bond and most people invest hundreds or thousands of bonds which bring down the odds massively.

But the massive advantage here is that you keep your money. 

If my dad had bought prize bonds instead of Lotto tickets, he’d still have over €15k - plus the chance, however small, of prizes.

The proportion of the prize bond fund paid out in prizes is  also half a percent.

This easily beats even the best on-demand bank interest rate – Ulster’s less-than-mouth-watering 0.1%. Other banks pay less than a tenth of a percent and Bank of Ireland pays nothing at all on demand - zilch.

Credit unions and pension savers are even being charged interest on their money! 

And so savvy pensioners are pouring money into prize bonds instead. As one frustrated pensioner told us recently: “When I got word (about negative rates) I was on to my financial broker and told him to move my money straight away, even in the short term into prize bonds.” Smart guy.  The payback of 0.5% is a fair return - and represents the first decent odds I’ve come across since starting to research this article!

The Lotto vs other lotteries

How does the Irish Lottery compare to others?

Compared to other lotteries, your chances of winning are not that bad. At least people do actually win millions now and again.

At least the Lotto, unlike some competitions,  don’t offer as a grand prize the “chance” to win something as a prize rather than an actual prize, as Ryanair do. 

Ryanair’s “million euro” prize in its scratchcard lottery has never been won. If you win, you don’t actually get a million, you get a “chance” to win a million (although smaller sums have been won).

Another company we wrote about previously also ran a lottery that offered the “chance” to win €250,000, which was more cash than it had in the bank at one point. 

We couldn’t find any evidence of anyone winning it either.

But what about other national lotteries, how does ours compare?

The Irish lottery was rated in the top ten for chances of winning, according to one website. That’s why UK bookies offer the chance to bet on Irish Lotto numbers.