Is the new £2 Lotto a worse bet?

The cost of a Lotto ticket has doubled to £2, but are punters better or worse off?

Camelot has doubled its ticket price to £2 and substantially altered the Lotto's prize structure.

This is the first price increase since the Lotto was launched by Noel Edmonds on Saturday, 19 November 1994. In the 18 years of the Lotto's life, inflation (the rise in the cost of living) has increased by an average of 2.9% a year. Thus, £1 bought the same amount of goods in 1994 as £1.67 would today.

In effect, by increasing the Lotto ticket price by 100%, Camelot has given punters a massive, inflation-busting price rise. This caused a flood of protests by disgruntled players, with thousands posting on Twitter and Facebook that this 'rip-off' will stop them playing the UK's most popular flutter.

Clearly, this proposed price increase is aimed at making Camelot and its partners more money, but may backfire spectacularly, resulting in a 'Boycotto the Lotto' backlash.

In snap polls published by the ‘Daily Mail’ and the ‘Guardian’ when the changes were announced, eight people in 10 said they would quit playing the National Lottery. At the ‘Daily Mirror’, nine players in 10 said they would reject the new-look Lotto. Angry players also hit out at 'fat cat' wages at Camelot, whose chief executive, Dianne Thompson, earns £1 million a year plus a performance bonus.

Are players worse or better off?

While doubling the ticket price may lead to higher revenues for Camelot, this might well not double prize pots. Especially if some punters – especially pensioners and other low-income groups – stop playing or play less, only selecting one line of numbers, for example.

What's more, the overall payout ratio of the Lotto will be unchanged. It will stay at 50%, half of ticket sales.

Across all Camelot's games (the Lotto, EuroMillions and scratchcards), yearly bets exceed £6 billion. However, less than £3 billion of this is returned in prizes, while the remaining billions are shared among the good causes fund (28%), the taxman (12%), retailers (5%), Camelot and its partners.

In effect, the loss ratio for punters of 50% will be unchanged, so Lotto players as a whole will be no worse off come September. What are set to change are prize pots at all levels, particularly the lowest prizes and the jackpot.

Here's how the new National Lottery draw compares to the old Lotto:

Lotto changes
Previously
NowChange
Ticket price
£1
£2
+100%
Average Saturday jackpot
£4.1m
£5m
+22%
Average Wednesday jackpot
£2.2m
£2.5m
+14%
Average 5 numbers + bonus ball payout
£100,000
£50,000
-50%
Average 5 numbers payout
£1,500
£1,000
-33%
Average 4 numbers payout
£60
£100
+67%
Guaranteed payout for 3 numbers
£10
£25
+150%
Ticket raffle
None
50 prizes of £20,000
New feature

As you can see, the lowest prize – for matching three numbers – is set to leap by 150% to £25 from £10. Matching four balls now gets you a typical prize of £100, a rise of two-thirds (67%) from the old average payout of £60.

At the other end of the scale, the typical prize pot for Saturday jackpots is up by almost a quarter (22%) to £5 million from £4.1 million. On Wednesdays, the jackpot fund will increase by almost a seventh (14%) to £2.5 million from the old £2.2 million.

To pay for these increases for the top and bottom prize levels, Camelot gutted the mid-level prizes. Matching five numbers now gets you an average of £1,000, a drop of a third (33%) from the old payout of £1,500. Likewise, the average payout for matching five numbers and the bonus ball is halved, falling 50% from £100,000 to £50,000.

In summary, while the two lowest prizes and the jackpot are boosted, the mid-level prizes have been slashed. This makes the Lotto a less attractive bet for punters who match five numbers or five numbers and the bonus ball.

The same odds but different winners

For the record, here are odds of winning each Lotto prize, which haven't changed:

No. balls correctly picked
Odds of winning
All six
1 in 13,983,816
Five plus bonus ball
1 in 2,330,636
Five
1 in 55,492
Four
1 in 1,033
Three
1 in 57
Any prize
1 in 54

Again, the odds of playing the Lotto have not changed now the ticket price has doubled, neither has the payout ratio of 50%. Therefore, despite the changes to the prize levels, the Lotto will remain a famously bad gamble!