
December 22nd, 2002
08:24 pm  El Gordo, the world's biggest lottery Today, for the first time, I have finally learned how the traditional annual Spanish lottery "El Gordo" ("the big one") works. It looks complex from the outside but a bit of analysis explains how easy it really is. You may have heard of it in the context of being the world's richest lotto, over a billion US dollars in prizes and so forth.
Effectively, there are 66,000 tickets, numbered from 00001 to 66000. One of these is drawn at random as the winner of the first prize and it pays off at 10,000 for 1 (or 9,9991 plus your stake back). Likewise, the winner of the second prize pays off at 4,800 for 1 and the third prize at 2,400 for 1.
Then two fourthplace numbers are drawn, paying off at 1,000 for 1 each, as are two fifthplace numbers, paying off at 240 for 1.
Then we go back to the first three places again. If you have a number one away (in either direction) from the first place you get paid off at 100 for 1, from second place you get paid off at 60 for 1 and from third place you get paid off at 48 for 1. (I suppose 66000 must be judged adjacent to 00001.) If you have either the first three digits or the last two digits of first place, second place or third place, you get paid off at 5 for 1. If you haven't won so far but have the same final single digit as the first prize winner (effectively, a 1 in 10 chance) then you get paid off at 1 for 1, ie, your stake back.
If you work it out, this makes a total payout of 38,545 times the cost of a ticket so far. They then draw another 1,531 tickets which pay off at 5 for 1 for an exact match, making a total of 46,200 units paid; this is significant because 46,200 is exactly 70% of 66,000. This compares favourably with most national and state lotteries which pay back 45%50% of stake money, not 70%. In total, 10,419 prizes are paid for the 66,000 tickets, so there's almost a oneinsix chance of your ticket winning something.
An interesting thing is that I believe some tickets will win more than one prize; if you match the last two digits of the first place number, you presumably also get paid the "last one digit of the first place number" prize also. Now haven't seen this stated explicitly, but it's the only way for this to make sense. It's also possible  and known, as in 2001  for a number to win the "missed a main number by one" prize and one of the final 1,531 random prizes; it might theoretically be possible for a number to win more than one of the first three prizes, too.
Now the first reason why this lottery is such a big deal is that there aren't just 66,000 tickets nationally. In fact, there are 1,800 incidences of each of these 66,000 tickets; in 2001, 18795 was the winning number, so all 1,800 holders of any ticket numbered 18795 are paid off at 10,000 for 1.
The second reason why this lottery is such a big deal is that each ticket costs €20  about US$ 20.54 or GBP 12.18. Not a small chunk of change. This means that each firstprize winning ticket pays off at €200,000, which is enough to pay off a reasonable mortgage and buy a trip round the world, but not enough to retire on.
The third reason why this lottery is such a big deal is that technically each number, or completo, is divided into 180 billetes of 10 décimos each. It is usual that there will be some sort of connection between the holders of the 10 décimos in a billete and even between the 180 billetes in a completo. The BBC report that "But the biggest single win came in Velez Rubio, a dusty village of 4,700 inhabitants, in the southern province of Almeria. The local amateur football club bought and then resold 80 first prizes, netting some $160m for their players, friends and supporters in the village and the surrounding countryside."  so, by interpretation, presumably 800 of the 1800 winning décimos were sold to members of that amateur football club. I vaguely recall hearing that a war games club had more than its fair share of winning décimos in an El Gordo draw of a past year.
Expanding on this, there is a huge lottery tradition in Spain. If you multiply it up, 1,800 décimos for each of 66,000 numbers works out at 118,800,000 décimos in total. (Multiply each of the 118,800,000 décimos by their cost of €20 each and you get €2,376,000,000  or a shade under US$2,500,000,000 of tickets for the single lottery. Yes, that number of zeroes.) Lest we forget, the population of Spain  not the adult population, the total population  is a little over forty million.
It seems usual that many Spaniards will buy one décimo in a billete with their neighbours, one décimo in a billete with their workmates, one décimo in a billete with each of their social clubs and so on. Then you know that if you win, your friends will have all had the pleasure of winning as well. The BBC's very interesting background article suggests that "The popularity lies in the fact that, rather than creating one or two millionaires, its winnings are so widely spread that almost half of the country goes home with something."
Apparently this year's draw, at noon today, was the 190th such annual draw; the draw ceremony takes three hours and the nation grinds to a halt while it takes place. A group of children from a primary school (formerly an orphanage) sing out the winning numbers and their associated prizes. "Here in Spain they say that Christmas begins with the draw," says a spokesman for the Spanish National Lottery. "Christmas wouldn't be Christmas without El Gordo." Indeed. I dare say that getting people to plunk down several €20s once per year will have taken, well, most of 190 years to evolve as a tradition, too, for €20 is a pretty serious chunk of change.
It's also worth noting that the formula by which the prizes are calculated does not change, so neither do the sizes of the prizes. The lottery gets bigger and bigger each year, but the prizes themselves don't; the numbers of billetes printed in each completo change instead. There were 180 billetes per completo this year, 170 billetes per completo last year and "just" 155 billetes per completo in 2000. Presumably the Spanish authorities can predict the demand, and calculate an appropriate number of billetes per completo, each year.
One technical issue that this throws up is that not all the billetes in every completo may be sold; while I would expect that, on average, over 170 of the 180 billetes in each completo are sold (otherwise, they just wouldn't print so many billetes!) then there may be, say, a third of completos which sell all 180 billetes and a third of completos which only sell, say, 165 billetes. Now if one of the latter come up, then only 1,650 tickets will be paid off at 10,0001 rather than 1,800 of them, which will make a fairly serious difference (€30,000,000, I think) to the budget. Furthermore, as the odds are fixed, there must be some variability in the actual sum paid out, but we're talking a difference of mere 10^{7}s of euros out of over 2 * 10^{9} in total, so the payout's got to stick within about 68%72% in practice. The remainder all goes to the state.
So that's El Gordo, the biggest lottery in the world and certainly the most fascinating that I have yet discovered. The BBC sez that "Tickets cannot be bought abroad but they are available through banks and online betting firms." For instance, elgordo.com will sell you a €20 décimo for a mere US$75. (Now that's an overlay; they never mention that the décimo is only costing them €20.) Or take advantage of economies of scale; buy two whole billetes of décimos  €400 of fun for just $1300! (Google News also has reports of El Gordo scams of a different kind  people receiving letters claiming that they have won money, but they need to send some taxes, wire fees or the like in order to claim it. A bit of a change from the 419/"Nigerian" scams, but not realy very different.)
By contrast, sales in Britain's own National Lottery are falling year on year  even relaunches and new games have failed to increase participation and the government are (BBC) said to be considering taking over the organisation of the lottery themselves in an attempt to stop the fall in the amount of money that the Lottery is raising for good causes. Camelot are trying everything they can think of to turn this around, discussing games of skill, sports betting, daily draws and even rapidaction Kenostyle games, but it does seem to be the case that the more they try, the worse they do. (Cases in point: the Christmas millionaire maker, back again, each year smaller than the last, and their terrible, abortive scoredraws game in cooperation with Vernons.) Perhaps if they scrapped Thunderball, Lotto Extra, the Instants scratchcards, HotPicks (er  is that the lot?) and so forth then interest in the main Lottery draw might return to what it once was and the jackpots would start to climb once again.
However, a story dated Wednesday 18th December on what I grudgingly admit is the best unofficial UK National Lottery site (albeit one run by a grumpy Scouse bastard) that there is a European lottery mooted, to be drawn on Fridays from 2004 onwards. It would "initially involve the UK, France and Spain, with other European countries to join later. Jackpots would be about 15m Euros (£9.6m)." Can't see this being a huge success, I fear. The thought of British lottery players' stakes going into the purses of jackpotwinning Johnny Foreigner is not particularly likely to appeal to the xenophobic masses. Too little, too late.
That said, I do think that the British could be turned on to something radically different and new. Bring on the first global El Gordo, I say  let's shoot for a €10^{10} El Gordissimo!
ETA, 22^{nd} December 2007: The 2007 incarnation of El Gordo was slightly different. Predictably, it's even bigger.
There are now not 66,000 €200 tickets (still sold as ten tenths) in the draw but 85,000. One pays out at 15,000for1  so €3,000,000 for €200 or €300,000 for €20. One pays out at 5,000for1. One pays out at 2,500for1. Two pay out at 1,000for1. Eight pay out at 250for1. I'm going to guess that there's similar shenanigans relating to near misses to the big prizes. There are also 1,774 "pedreas", which from context I assume are the 5for1 payoffs to make the exact return 70%. There were 185 billetes per completo this year, but so many more completos that the total value of tickets sold was 185 * 85000 * €200 = €3,145,000,000. Oh, and it looks like Wikipedia has a pretty good explanation of the game, plus a convincing explanation why localities tend to benefit en masse from winning tickets.
Looks like 2004 was the last year of the old 66,000 ticket format, with 195 completos sold, with 2005 being the first year of the new 85,000 ticket format with the numbers of completo</s> rising from 170 to 180 to 185 this year.
In other news, I recently got an "'Attaboy!" from an unexpected source, which was very gratifying. (Red Dwarf quote time, just for picklepuss: "Ah, smug mode.") To be fair, we now know how to bribe that particular judge: one judiciouslyplaced Christmas card is all it takes... :) Current Mood: smug

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