Crunching the numbers on Lotto strategies
The New Zealand Lotteries Commission - now known as Lotto New Zealand - made more than $560 million from hopeful millionaires buying Lotto, Strike and Powerball tickets for the year ended June 2013 - 60 per cent of total sales.
Lotto NZ's aim is to ''make it as easy as possible for people to by our products'' - and its arguably succeeding.
The 2010 Health and Lifestyles study estimated 63 per cent of people aged 15 or over had bought a Lotto New Zealand product at least once in the previous year - compared with 16 per cent playing a gaming machine, or 14 per cent betting on a horse or dog race.
Lotto is a 6/40 game. Out of 40 possible numbers, six are drawn which a ticket holder has to match in order to win first division.
The odds of winning Lotto first division are 1 in 3.8 million.
Throw in a Powerball and the odds increase to 1 in 38 million.
Many people believe they can win the lottery, either believing in books on how to beat the system or relying on their own methods, a 2010 study by San Diego State University's Helio Chang, Albert Chen and Fred Chen from Science Applications International found.
Google ''how to win NZ lotto'' - there are a number of websites promoting Lotto software, allowing you to scrutinise Lotto statistics, or offering ''winning Lotto strategies''.
The tips range from having a relatively even number of odd and even numbers, a spread of high and low numbers and carefully choosing people to go into a lotto pool with.
Hot tip; pick winners to gamble with, not losers.
The American study took a more robust approach, choosing three popular ''winning'' lottery strategies to analyse.
The first is the random strategy - only buying computer generated lucky dip tickets in order to have numbers that are as random as possible.
The second strategy is the low frequency strategy; picking numbers that are less commonly drawn.
The third strategy is the high frequency strategy. This strategy attempts to take advantages of ''trends'' by picking the numbers that are most commonly drawn.
In September Lotto NZ publicised its top ten most drawn lotto numbers.
Number one was number one, drawn 271 times out of more than 1300 draws.
Number 7 was the second most-drawn number, randomly pulled 268 times with unlucky number 13 the third most drawn. Twenty one and 38 rounds out the top five.
If you were to adopt a high frequency strategy you could chose six of the top ten drawn numbers and follow the trend.
But would this strategy - or any of them - make you more likely to win?
University of Auckland Biostatistics professor Thomas Lumley says you can't affect your chances of winning by adopting a pattern strategy - or any strategy at all.
He says the drawing of Lotto numbers is totally random and a lot of effort is spent ensuring it is random.
Lumley says there is some merit in relying on a Lucky Dip versus selecting your own numbers because it guarantees your numbers are random too.
Picking numbers that have meaning to you has another drawback. They're often linked to dates - like birthdays - knocking out all numbers over 31, further reducing your chances of winning.
LUCKY LOTTO SHOPS
We've all seen the headlines - Lucky Lotto shop claims another first division win.
Hawke's Bay pharmacist Peter Dunkerley is known throughout the country for his lucky shop, but in 2012 two Auckland shops - both in Manukau - topped the luckiest retailer list, with more than $2.6m in prize money.
A Lotto shop in Hornby Mall slid into third spot with Peter Dunkerley hanging on to fifth spot.
Is there any advantage to buying from a ''lucky'' Lotto shop?
''That can't possibly be true,'' Lumley says.
But Lumley concedes the lucky shops, and their patrons, could be benefiting from an increased share of prizes tagged to a higher number of sales thanks to their ''lucky'' status.
Tempted to buy a ticket only when there is a big jackpot? Many of us are. Lotto NZ's revenue was down almost 10 per cent in 2013 from 2012 with the blame for this pegged to a lack of jackpot ''runs''.
There was only one long Powerball run in the year with a $20m draw, compared with between four and eight $20m or more draws in the prior two years, Lotto NZ says.
Do more tickets sold dilute your chances of winning?
No, Lumley says, and in fact you have a ''slightly'' higher chance of winning a Powerball must win draw for the very reason that ''someone has to win''.
There is no magic that we can exert or strategy to adopt that will make us more likely to win Lotto.
But we can increase the size of the prize we win, once we've overcome those one in 3.8 million odds.
Lumley says picking uncommon numbers is the best way to ensure, if you win, you get the lion's share.
This is because you are not only trying to beat the machine; you have to beat out all the other Lotto players to stop them sharing the spoils.
Common numbers, by their very commonness, tend to mean more winners splitting the prize.
Uncommon numbers are less likely to be chosen, so if the unthinkable happens and your unpopular numbers come up that $30m could be all yours.
The US study found you would ''have to play the lottery forever'' in order to make the low frequency strategy reap ''minor gains''.
''The slight increase in matches does not come close to resulting in big lottery winning,'' it said.
There's another thing to note.
British mathematician Marcus du Sautoy says people assume random means evenly spaced.
''But very often random events will be clumped together,'' he told a British newspaper.
He advises gamblers pick consecutive lottery numbers.
It is common that consecutive numbers are drawn, his book The Number Mysteries says.
''Not many people [pick consecutive numbers] but it is just as likely as any other combination. In fact, if you do win the jackpot with consecutive numbers, you probably won't have to share it with as many other winners,'' du Sautoy says.
IT'S JUST A GAME
The sensible gamblers, Lumley says, choose their own numbers and gain enjoyment from the activity of picking the numbers and watching the draw, without any real expectation they might win.
But numerous studies into gamblers' habits have shown gamblers engage in high levels of irrational thinking while gambling, a 2006 study by the University of Sydney's Elizabeth Cowley and Colin Farrell and Victoria University of Technology's Michael Edwardson says.
These irrational beliefs can cause them to ''misperceive the economic utility of gambling, providing them with false expectations of control over events determined randomly and lead them to continued gambling despite the inevitability of monetary loss''.
In other words, you may think you can influence the lottery but it's more likely you will lose.
On the other side of the coin are those that have done the oft-dreamed of, and won - and don't know it.
A staggering $10.1m in unclaimed prizes over 12 months old were left on Lotto's books for the 2013 financial year, and in 2012 the number was even higher - $10.6m.
In November an Auckland man claimed a $1m prize that he'd had tucked away in a draw, buried for seven months, before he checked the ticket online.
There are other ways to make money from Lotto other than pinning your hopes on long odds.
The US study concluded there is no strategy that can outperform the game or are better than guessing. The ''experts'' who claim to know how to beat the system should not be trusted, it said.
''It is likely that those experts are making more money out of selling those books than profiting from lotteries using their own strategies.''
At least someone is winning.
- Fairfax Media