Table of Contents
History of Lotto
(And Understanding What You Are Buying)
George Adams
The history of lotto can be traced back to George Adams in 1881. Adams moved to Australia from England at the age of 16 and worked in many positions including publican, stockbroker and baker. In 1881 Adams who worked as a publican in Sydney took bets on horses which could be considered the start of his gaming business.
The NSW and Queensland Governments regarded Adams as an undesirable due to his business activities and made it very hard for him to live in either state.
Adams moved to Tasmania in 1895 just as that state was opening the first Hydro-Electric station on the South Esk River in the southern hemisphere. Tasmania was looking to develop this industry using limited government resources and private investment. Adams sold the benefits of a State lottery to the Tasmanian Government which he called Tattersalls.
Tattersalls
George Adams structured the company so the Tattersalls workers' families would inherit the profits. This created so-called "Tattersall's heirs" where subsequent generations inherited a share in the company's profits.
Since most people relied on newspapers for information the natural choice of outlet for Tattersalls was the local newspaper shop. A commission arrangement was created for the sale of Tattersall coupons.
Since the integrity of the draw was paramount to ensure confidence, In the 1960s Tattersalls partnered with a television broadcaster to televise the draw and show it was supervised by Tattersall and Government officials. This promoted Tattersalls as the socially acceptable form of gambling.
After 77 years of providing Tasmanians a chance to have a life changing windfall and supplying well needed revenue to the Government for its capital projects, the Victorian Government saw the benefits and invited Tattersalls to introduce Lotto into Victoria.
Saturday lotto was started on the Australian mainland on the 24th June 1972. The Tattersall’s building being built on St Kilda Road, Melbourne and retail outlets throughout Victoria were established.
In those early days the purchase of a coupon generated a carbon copy which needed to be matched back together with the original before payment was allowed. The Tattersall’s building had hundreds of workers to carry out this laborious task.
The lotto business has developed across Australia with around 4,000 outlets earning 9.3% commission on weekly average sales of $50 million.
It didn’t take long for residents across Australia to partake in a chance to win a bundle of cash and the other states and Territory governments could see Victoria receiving revenue from their jurisdictions.
The New South Wales government started their own Monday and Wednesday draws on 5th November 1979.
National Lotto Draws
In the 1990s, with the introduction of Tuesday lotto in 1994 and PowerBall on Thursdays in 1996 by Tattersall, all the states and Territories came to an agreement that they would all use the existing draws in common for the five days. Hence the ‘National Lotto Draws’ were created.
The manual system of reconciling coupons were fully automated with terminals been leased to outlets. If winning coupons are not claimed in the short term, the holders of the coupons have to submit the winning coupon to the respective Government State Revenue Office for payment.
Punters were given the option of registering their coupons through a membership card and each coupon has an individual bar code to try to minimise the incidences of unclaimed winnings.
The uptake of membership or checking the barcodes at outlets today is still far from 100% and only the authorities know the true sums that are not claimed. They sometimes talk about the division 1 prizes that are not claimed, they never mention the millions of lower division wins that are not claimed.
Many people purchase lotto prior to the draw date and forget to check the numbers. Checking numbers on multiple game coupons is laborious and is open to error. A lot of people purchase lotto to just win the major 1st or 2nd divisions and find it inconvenient to understand or claim lower prizes.
Out of 50+ million coupons sold each week and 98% of those not winning anything, it is highly probable that of the 1 million coupons that win something, there are a significant number of them in drawers, rubbish tips or in the same place as those missing socks.
Western Australia Government administer their own Lotto through Lotterywest, South Australia and NSW leased their administration to Tattersall , and Tattersall owns and administers Lotto in the other 3 states and 2 Territories under government agreements.
In 2005 Tattersalls decided to list on the Australian Stock Exchange. "Tattersall's heirs" were now allowed to sell their stake in the company to the general public.
Tatts Group
Tattersalls changed its name to Tatts Group.
The Tatts Group now owns and administers:
- All lotteries in Australia except for Western Australia (Lotterywest uses the draws carried out by the Tatts Group)
- Racing and Sports Betting under the names of TAB, TattsBet, Unitab, UBET
- Electronic gaming machines (Pokies) and monitoring solutions for the industry throughout Australia and UK under the names of Maxgaming and Talarius PLC with brands of Quicksilver, Winners and Silvers
- Electronic maintenance to Telstra's payphone network under the name of ByteCraft
The Tatts Group head office is now in Queensland.
Lotto games sold each week to the 16 million Australian adults for the five national Lotto draws is in the vicinity of 50 million of which 49 million games do not win anything. The figures greatly increase as the Jackpots and the associated advertising increases. It is regarded that 1:9 adults purchase lotto regularly with 1:4 adults purchase when the jackpots and advertising increase. The Governments and Tatts Group protect their monopoly on a very lucrative ‘cash cow’!
The 3-5 year licence agreement that outlets sign requires them to increase their lotto sales from one licence period to the next. If business does not increase then the licence is offered up to another business wanting a Lotto licence. See clause 15.4 a,b and c of Tatts Franchise Agreement - 31st Oct 2014.
The Tatts Franchise Agreement is an interesting document to read. Clause 5.2 and others are certainly relevant when you are considering who is responsible for managing your investment in a syndicate especially if you pay in advance.
It is nice to know that your AusLottoGroup syndicate is the responsibility of Grenville Silvester and is paid for in arrears!
Syndicates, Pick and PowerHit
Since it is illegal for a business to purchase a game of Lotto the Tatts Group nor Governments can offer syndicates.
Pick and PowerHit Lotto entries greatly improve the odds of winning but they do not promote greater spending by punters.
To increase business, the 4000 outlet proprietors purchase multiple system games themselves then offer them in the form of syndicates.
A system 15 on a Saturday night for instance generates 5,005 games but only improves the odds of winning from 1 chance in 8,145,060 to 1 chance in 8,140,055. (Just a miniscule 0.06% improvement!) Each share of a 50 share syndicate cost $65.65 with the outlet earning $305 commission. The punter sees 15 numbers from 45 and thinks it is a great deal. In reality the 15 numbers generate 5,005, 6 number games with only the 15 numbers represented. The other 30 possible numbers are not in any of the 5,005 games.
In contrast, a single Pick 5 game, costing just $28.40 on a Saturday night improves the odds of winning by 40 times by only requiring 5 numbers to win, not 6. Outlets could not survive by offering shares in Pick and/or PowerHit games!
Syndicates of various sizes are created by outlets to emotionally cater to a punters financial situation. The syndicates do not greatly improve the odds to win, rather to generate growth in sales and therefore commission earned. Outlets can only earn commission on sales through their terminal.
Because of the electronic age of information and the customer base of newsagencies dropping away, there is now discussion in Australia on what is the best outlet profile to provide lotto coupons. Can the big Supermarkets or like organisations provide the same personal touch as the corner newsagency?
Lotto players require an outlet where they can have the benefit of sharing the cost of Pick and PowerHit entries while being guaranteed to win more than buying a single or system game. They need an outlet which caters for sustainable participation in Lotto.
ALGMO and the AusLottoGroup Membership
The copyrighted ALGMO Administrative System was created to cater for smart Lotto players. The reporting, personal help desk, referral, guarantee of all wins, payment and other benefits of AusLottoGroup membership is unique in the world and is a growing service to lotto players worldwide.
Australian Lotto Group (Bus No. B2326683M) which owns the ALGMO Administrative System and has the Australian Lotto Group Merchant facility with the Commonwealth Bank has been granted to receive payments from Master Card, Visa, AMEX, Diners, Discover, BC Global, DinaCard and RuPay from anywhere in the world without needing the CVV number or account name. This is due to the high regard that the administrative system and management is held by the banking and regulatory entities.
This approach of providing Lotto players a better chance and cost effective participation is now striking a chord with many thinking Lotto players.
The membership controls the issue of problem gambling through chance education through the Lotto Odds Calculator while offering a cost effective way of having a real chance to win a life changing amount of money.
There will always be the person who wants to ‘give it a go’ on a whim and not want to understand the odds against them. They could win and some do - However some businesses also succeed without the owner knowing anything about the business - they are very much in the minority!
The regular Lotto player needs and wants a logical and secure approach to give them a sustainable chance.
Whether you are an individual or represent a community group the unique referral program provides 12% of membership cost to the referrer. That is more than what the tatts outlets earn in commission at 9.33%. To raise funds for your project or for your club, just join the AusLottoGroup membership and promote this website.
The lotto story has a great solid base in Australia for over 100 plus years but the 14 year old AusLottoGroup era has just begun!