Columnists
The unsophisticated buyer
It has not been a good week for me.
It all began when I examined a flier that tumbled out of my daily newspaper, advertising the SickKids Lottery. The chance to make a charitable donation at the same time as winning cash prizes appealed to both sides of my brain, so I looked at it carefully.
Two things stood out. “1 in 3 Odds,” it screamed; and “More Cash Prizes.” Now it didn’t explain on its face how the odds were calculated, and it didn’t say what “more” referred to: it could have been “more cash prizes than our last lottery,” “more cash prizes than are shown on this page,” “more cash prizes than are shown in this brochure,” “more cash prizes than our competitors’ lotteries”—or even something else.
So I looked a little more closely at the advertised cash prizes. For the cost of a basic $100 ticket, it appeared that you had a chance to win one of some 347 cash or cash-in-lieu prizes, having an aggregate value of about $1.5 million. This intrigued me. It seemed that if I plunked down my hundred bucks, I would get a one in three chance of getting one of those cash prizes. What was not to like about those odds?
Except that it didn’t make any sense. How could the lottery fund its cash prizes if it were to guaranteee odds of one in three? Wouldn’t that mean they could only sell three times 347, or 1,041 tickets? Wouldn’t that mean that they could only raise just over $100,000? That wouldn’t pay for the cash prizes, let alone administrative expenses, or the good work of the SickKids Foundation.
Sure enough, in the fine, fine print, there was a clue. “See Rules and Regulations [on the web] for Details.” And the rules and regulations—after noting that every ticket buyer is deemed to have read them—painted a much different picture. There are, in fact, some 179,000 tickets available to be purchased and the prizes, while including the cash prizes advertised, also include some 9,000 free lottery tickets and 45,000 “electronic and merchandise” prizes. So it turns out that while the odds of winning a prize of some sort are indeed about one in three, the odds of winning a cash prize are a little longer—something like 347 in 179,000, or about one in 500. On the positive front, with 179,000 tickets for sale, chances are that the Sick- Kids Lottery will be able to pay for the cash prizes, cover expenses and make lots of money for the Foundation. No doubt, this has all been carefully designed from the outset.
While I now understood the odds and the nature of the prizes more clearly, I felt that I had been led astray by the flier. What if I were some unsophisticated little old lady, I said to myself, and not some worldly page eight columnist for a top-ranked international journal of record such as The Times? Would I be tempted to bet my life savings on a mis-appreciation of the odds of winning a cash prize?
So I put it to the SickKids Foundation: Wasn’t the flier misleading? And the written reply I got said, essentially, that the Foundation prides itself on adhering to lottery industry best practices; that the best practice in shorter form advertising like the flier is to “highlight key messages such as odds and prizing;” that the Rules and Regulations were on the web; that a longer 32-page brochure was available to explain things more fully; and further that its regulator—the Alcohol and Gaming Commission of Ontario—had reviewed, vetted and approved the marketing materials. Which is tantamount to suggesting that only a fool (such as I) would rely entirely on the flier and not bother to check things out more carefully.
As for those little old ladies I was so worried about, I guess they’re considered sophisticated enough not to fall into the trap I fell into. So maybe I’m not quite as worldly as I thought I was. Maybe I’m the sort of person the Alcohol and Gaming Commission is there to protect. And maybe I have to be just a little more vigilant than I thought I needed to be. And yes, I am still considering buying a ticket, if only to prove to myself that I can handle the complexities of the whole odds and prizes business.
It’s been that kind of week.
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