If you are interested in buying a lottery ticket, you will find many different ways to play lotto, both online and off-line. There are local lotteries with comparatively small jackpots as well as multinational lotteries with up to three-digit-million dollar or euro jackpots. The following text contains a consolidation of the different lottery systems that exist, demonstrates the advantages of online lotto, reveals the purpose of the generated revenues and grants useful advice on how to deal with the situation of a win in the lottery.
What different types of lotteries do exist?
People all over the world are playing different types of gambling for centuries. Amongst others, these include card games, scratch cards, raffles, dice games and of course lotteries. However, there are different types of lotteries as well.
Traditional number lotteries
Most of the world’s biggest and most popular lotteries belong to this category. Playing number lotteries requires the active picking of numbers out of a predetermined pool of numbers. This includes for example the German Lotto 6 aus 49 (6 out of 49), the Italian SuperEnalotto (6 out of 90), the US-American lotteries PowerBall (5 out of 59) and Mega Millions (5 out of 75) and many different more. There is often an additional number that you have to pick correctly in order to win the jackpot, called for example star number, bonus number, powerball or likewise. Number lotteries regularly offer the highest jackpots of all lotteries, because of the large number of players.
As the name suspects, subscription lotteries offer the possibility of purchasing a subscription. The idea is that you buy a lottery ticket, either with a given line of numbers or one where you have to fill out a single or multiple lines by yourself. With paying a monthly fee, the same lottery ticket will enter each upcoming draw one after another. The advantages are obvious: every time there is a draw you have a chance to win the jackpot, but you never have to worry about missing deadlines anymore.
Most number lotteries offer a subscription service, but there are also lotteries that require an earlier subscription in order to play it in the first place. To this category belongs the UK-based People’s Postcode Lottery, where you have no influence on the line of numbers you receive. Regardless of how many lottery tickets you buy, you will get the same numerical code on each of it: your postcode. Each draw contains the drawing of several postcodes that will win a prize consequently. This means that your chances of winning will not increase by purchasing more tickets, but the amount of money you receive if you are lucky.
Lotteries based on last digits
Lotteries like the German Spiel 77 or Super 6 are typical representatives of the group of lotteries, where the drawn series of numbers has to be congruent to the number of your lottery ticket. The numbers have to be read from right to left, your prize money increases for each corresponding number. For example: if the draw results in the numerical series 45231, each lottery ticket number ending with “1”, “31”, “231”, “5231” and “45231” wins, regardless of the numbers prior.
Why play online lotto?
Playing lotto online combines several advantages. Firstly, it is the most comfortable way to play lotto. You do not have to go out on rainy days, are not dependent on opening times of shops or kiosk and do not even have to look up the results. If you win, you will receive a winning notification shortly after the draw. Smaller money prizes are automatically transferred to your user account on the lottery ticket agent’s website so that you can use it to play again. Larger amounts of money directly get transferred to your bank account.
Lottery ticket selling websites often offer special deals in order to acquire new customers. You can use these advertising campaigns to play lotto online for significantly less money than off-line. Mostly on holidays (e.g. Christmas, Eastern) there are special offers providing the chance to play multiple lines for the cost of a single one or participate in additional raffles.
Additionally, most lottery websites on the internet provide interesting statistics and data that may help you picking your numbers. You can look up the results of previous draws, check, how often single numbers were drawn or if your ticket would have won a prize in a earlier drawing.
Where do the proceeds go?
Most of the modern lotteries hold “50-50” draws. This means that 50% of the total revenues are used to finance the cash prizes. For example € 0,50 of a lottery ticket costing € 1,00 is distributed amongst the different prize levels. But what happens to the other 50%?
Some of it – 7% to 10% – is withhold by lottery ticket retailers as a commission. This applies for online lottery ticket retailers as well as shops and kiosks. Another part – varying from lottery to lottery – is used to cover operating costs of the lottery and other involved parties.
Very interesting is what happens to the other 20% to 30%, for most of the players not knowing that this part usually goes to good causes. If the lottery is state-franchised, the money can for example be used to cover the budget of educational programs or supporting programs for athletes, the youth, senior citizens or impoverished citizens. There are only a few lotteries, where this amount of money is retained by the government and not directly used to support for example educational programs.
Many other lotteries support a large number of non-profit organizations. The UK-based Health Lottery for example supports the Children’s Food Trust, the Alzheimer’s Society, the Conservation Volunteers or the Youth Sport Trust to only name a few. Lotteries even give non-claimed prizes to good causes instead of withholding them for own purposes. However, you do not have to worry that your prize will be given away immediately, even if you have not checked the results for weeks. Normally, you have up to 180 days to claim your prize. Only after waiting this period, prizes will be used to support the underprivileged. This applies for nearly all good cause lotteries.
Additional types of lotteries are sports lotteries. With purchasing a ticket of such a lottery, you help the team to pay for training equipment and facilities, camps and other activities. This method is especially used in the United States of America by football, basketball, soccer and other sports teams of smaller colleges and universities in order to raise funds. Even the Army and other military facilities use this method, as the examples “Army Sports Lottery” and “Royal Navy and Royal Marine Sports Lottery” from the United Kingdom show. The money is used to enable athletes to go on trips and participate in major sport events, like the Olympic, Paralympic or Commonwealth Games.
How to behave after winning in the lottery
Although lottery players dream of a big win in the lottery for their entire life, they often do not know what to do when the time actually comes. Even worse, they make basic mistakes, which could lead to particularly substantial losses. However, if you follow some simple rules, you will have many years of pleasure with your money. For this Purpose, many lotteries provide the services of an advisor, who can help you, manage your fortune and give useful tips on what and what not to do. This service is mandatory; you do not have to make use of it, if you do not need it.
The easiest way to keep your money together is by not telling anyone. Of course, it will be hard to hide a multi-million win in the lottery from you partner, close members of the family and/or your own children, but, if possible, these people should be the only ones to know about the win. Once you told it to everybody, people you have not seen in a long time will suddenly be your best friends. And although your neighbors and colleagues might not begrudge your lottery win to you, this sympathy can quickly turn over into jealousy.
The history shows that the stories of people, who were to communicative with their lottery wins, often do not end well. There is for example the case of Lothar Kuzydlowski from Hannover, Germany. Converted in Euros, he won about € 2 million in 1994. Instead of continuing to live a humble life, the then 48-year-old artisan decided to buy high-priced sports cars and celebrated parties all over the world. However, his life would soon come to a bitter end. His wife left him in 1998 and with no further money left, “Lotto Lothar”, as German media named him, died in 1999 of cirrhosis.
Another good example is the story of Jack Whittaker, born in West Virginia, USA, in 1947. In 2002, he won an incredible amount of US$ 314.9 million in the multi-state Powerball lottery. A single ticket in the USA has not won a larger jackpot at that time. Because he choose the cash option, after tax withholdings, he received a check for US$ 113.4 million. He was very generous with his money, donated about US$ 14 million to his own Jack Whittaker Foundation, gave 10% of the win to Christian charities an even bought a house and a car for the woman who worked at the store where he bought his ticket.
Whilst everything appeared to go well for him, he became serious legal and private problems at the same time. Thieves broke into his car on two occasions and stole a total of US$ 745,000. The 18-year-old boyfriend of his granddaughter was found dead due to an overdose on Whittaker’s private property. Shortly after, also his granddaughter was found dead at the age of only 17. Several legal proceedings were initiated against him, including driving under the influence of alcohol and out of money reasons.
Learn from their mistakes
Not every story of a lottery winner has to end this bad. In fact, these examples are the exception, but should still be seen as warning for every lottery player. If you act with the appropriate foresight, you can minimize the chances of ending up like the two lottery winners above.
Instead of buying a brand-new sports car, you should buy a medium-sized vehicle. It can still have all kinds of extras and gadgets, but a car like that will not raise any questions. You can also purchase a new kitchen, a new sofa-set or a flat-screen television for your living room without having any guilt. These kinds of things will raise your standards of living but are comparatively normal acquisitions. Even a luxury holiday in a five-star hotel is possible, because you do not have to tell anybody where you are really going.
After fulfilling your long time wishes you have to consider what happens to the rest of the money. Most helpful is to a confidential accountant who can help you in financial matters. He will tell you if and why it is helpful to spread the money, what investment opportunity will grow the highest expected results or if it is most recommendable to just bring your money to the bank and live of the generated interests.
Living from the interest income – is it possible?
Having that much money that you can simply live of the interest is what most people try to achieve in their lives. However, how much money do you really need? The following example calculation will help you answering this question.
We assume a lottery win of € 5 million that is placed on a bank account generating an interest rate of 3.5%. That would result in € 175.000 yearly or about € 14,600 in monthly interest. Depending on the country you live in, these earnings are a subject to income tax, which is at an average 25% to 30%. After paying the income tax, you will be left with a monthly €10.220 to €10.950. With that amount of money, you will be able to life a decent life and fulfill your wishes on a regular basis.
Major scandals and the consequences
Due to a detailed investigation of the lottery wheels and any other machines that are involved in the process of a drawing, mistakes are almost impossible. Yet, exceptions confirm the rule. Like on the 3 April 2013 drawing of the German lottery “6 aus 49”. The draw had to be repeated because no one in the studio saw that not all 49 balls were inside the lottery wheel. As a consequence, several player assumed their ticket won a prize (but none of them hit the jackpot) and called the lottery agency. But the agency had to led this people down, because another draw with all 49 balls was held shortly after, resulting in a different outcome. The players, who would have won a prize in the earlier draw, where not entitled to a win.
Despite all the efforts of preventing frauds and mistakes, people from outside sometimes succeed in manipulating the results. This led to some major scandals in the past. For example, the Pennsylvania Lottery Scandal of 1980, called the “Triple Six Fix”, involving the host of the TV show of the draw, Nick Perry, and his accomplices. Except for the 4′s and 6′s they weighted down all balls and placed bets on all possible combinations with these two numbers. The result of the three-ball-draw was 6-6-6 and as a result, Perry and his friends won a jackpot of US$ 3.5 million. Due to an anonymous hint, they were caught afterwards and had to go to jail for two years. The movie “Lucky Numbers” is based on this incident.
Several other lotteries in Italy, China and the USA for example were victims of scams and frauds over the last couple of years. But due to observation and controlling mechanisms becoming better and better, it is nearly impossible to manipulate the draw itself. Most scams are only possible because lottery ticket owner do not pay enough attention to their lottery tickets and get ripped off as a result.