Lottery Prizes

It may just seem a little surprising to you at the outset but the fact is that when it comes to lottery prizes, they are arrived at on a pretty scientific and precise basis. In other words, there is really no ambiguity with regard to the way in which prizes are determined.

To validate our assertion, in this article we will look at the lottery prize system in the UK, which will ultimately give you a very good idea in terms of the manner in which prize money is actually determined.

Essentially, when it comes to the lottery system in the UK, what we see is that for every £1 that is received by the industry, 45% is added on to the prize winning money. So as an instance, if there is a total of £10 million which has been collected via the lottery, £4.5 million would definitely be available to be distributed as prizes.

Moreover, all those who are able to match at least three numbers are entitled to £10 each.
After this part of the prize money has been distributed, the remaining money referred to as the Pools Fund, is now distributed as follows:

  • 52% goes to those who match 6 main numbers
  • 16% goes to those who match 5 main numbers, in addition to applicable bonus
  • 10% goes to those who match 5 main numbers, sans any bonus
  • And finally, there is a significant 22% which is reserved for those who match 4 main numbers

Now, you would be curious as to what would be the winning amounts that you can (possibly and hopefully!) lay your hands on, so here goes:

  • If you are able to match 6 main numbers for the jackpot, you would stand to win as much as £2 million
  • Now, if you are able to match 5 main numbers and also the bonus ball, then you could win about £100,000
  • Matching only 5 main numbers without the bonus ball would imply much lower earnings of about £1,500
  • Finally, while matching 4 main numbers can lead to a prize money of £62, matching 3 numbers only would fetch £10 as mentioned earlier.

Having got a lowdown on the kind of money that you can expect as a prize winner, you would be quite curious about what happens to the remaining 55% (since 45% out of every obtained through lottery is actually distributed as prizes).

Well, first of all, 28% gets added to the National Lottery Distribution Fund. This is a fund which works towards initiatives along the lines of sports, charities, and arts among others, with a prime example of a recent exemplary recipient being the 2012 London Olympics and its organizers.

12% goes as tax straight to the UK government.
The remaining 15% gets distributed equally between 3 different entities, viz. 5% each, as follows:

  • 5% for the lottery retailer
  • 5% for future draws as well as for instant prizes such as Scratch cards
  • 5% for the owner / organizer of UK National Lottery, viz. Camelot Group PLC

So as you can see, when it comes to allocation and distribution of lottery prize money, there are numerous precise determinants of the same which hold true for other lotteries around the world as well.