Inside Money

Business writer David Chaplin blogs on personal finance

David Chaplin: It's a gambling world

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Photo / APN
Photo / APN

Jim Hool's appeal for numerical justice ended unhappily for him on Fair Go this week.

But the consumer advocates wasted far too much time (5:07 minutes) getting to the point: mate, Lotto, is just random numbers.
Watching Jim count out his large pile of seven-less Powerball tickets was instructive, though, of the human tendency to look for patterns in the randomness.

It's a tendency that New Zealand Lotteries exploits effortlessly.
According to the NZ Lotteries Statement of Intent 2011-13, sales for the year ending this June 30 are projected to reach $825 million - down from a high of over $900 million in the 2008/9 financial year but still substantial.

NZ Lotteries estimates in its 2010 annual report it was the fourth most profitable New Zealand business and the 40th largest by turnover in 2008/9.

(It also noted in that report it would no longer be able to benchmark itself using a study formerly carried out by the Casino Journal - or do they mean The Casino Journal?)
In GDP terms, this year's sales of NZ Lotteries products will equate to 0.43 per cent of the economy (0.5 per cent in 2008/9).

Over the next financial year, NZ Lotteries predicts total sales will hit $860 million, which just about equals the $880 million that was going to cover the member tax credits for KiwiSaver.

It is a curious fact that we will voluntarily throw away $20 a week in the hope of gaining highly improbable instant mega-wealth than chip in $20 a week via the tax system to slowly build long-term retirement savings.

Despite this, NZ Lotteries has a 'growth strategy' that includes measures to hose down any doubts we might develop about this officially-sanctioned gambling den.

"We will work with the NZ Lottery Grants Board to increase awareness of the good lottery grants do in the community, as this is an important aspect of the post-ticket purchase rationalisation by players," the Statement of Intent notes.

I don't think the Board has to worry: irrationality is too entrenched.
And not just in New Zealand. An interesting aside in the Statement of Intent reports on moves to develop a 'world lottery' - an international community of losers.

"In essence, the idea is for individual lotteries to band together to sell an international lottery game," the document says. "Discussions are still at a preliminary stage, but at some stage it may become necessary for NZ lotteries to make some form of commitment to the further development of this game, should we wish to participate rather than attempt to compete with it."

Now if Jim Hool is looking for another conspiracy story...

- NZ Herald

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