How much ROI?

I was at Eason’s last weekend when this advertisement thingy was dangling and bobbing up and down at me at the cashier. Something about millionaire raffles. Two grand prizes worth a whopping million Euro each. And only 300,000 tickets would be sold nationwide.

What’s the catch? Each raffle ticket will set you back by 20 quids.

So quick calculation. €20 x 300,000 = €6 million. This should generate a really nice profit margin for the National Lottery, isn’t it?

Of course, my friend pointed out, surely there would be more than just two prizes. How about the smaller prizes? Since we didn’t have time nor the inclination to ask for details, we left and when I got home I did a little search on their website for information.

In total, 532 prizes would be at stake, putting each raffle ticket owner at under 0.2% of winning something (a pretty good odd in comparison to normal lottery draws I guess), ranging from €500 (there are 300 of them) to the million euro cheques (only 2 I’m afraid).

Even then, total prize payout would only sum up to some €3.6 million. Total income generated from the sales, as calculated above, €6 million. Taking account of some associated costs in running the promotion etc, there still ought to be a cool 35%-40% of net profit to be made through this little venture.

In the end, who really is the millionaire winner? Not you. Not me. (Well, I don’t have a ticket in any case.) It’s the National Lottery. When their coffers fill up by at least another couple of million Euros.

2 Comments so far

  1. Mo (dub_mohan) on July 21st, 2008 @ 1:22 pm

    hmm, interesting, now they take money from me/us and make themselves and the 2 people million’ers .. great business.. looking into this way, .. take my money, our money n get rich and give 2 lucky winners some money .. n the viscous cycle continues.. i still have to buy my first ever lotto ticket :)

  2. Lil (lilianl) on July 22nd, 2008 @ 4:40 pm

    the moral of the story is, they will be millionaires several times over before some of the ordinary folks does…

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