Odds are ALC's GeoSweep suffers from low sales

Atlantic Lotto's GeoSweep game has never paid out its daily $250,000 grand prize in nearly a year's worth of draws, which likely flags an indication of poor sales.

After nearly a year, daily $250K draw has yet to have a winner

As of last summer, the Atlantic Lottery Corp. had invested $8.7-million in the U.K. company that created GeoSweep. (ALC)

Atlantic Lotto's GeoSweep game has never paid out its daily $250,000 grand prize in nearly a year's worth of draws, which likely flags an indication of poor sales.

There are roughly 2.3 million Geos up for grabs in each draw. Each Geo costs 25 cents per day.

Even if just over one per cent of all available Geos were sold in each draw, there is a 99 per cent probability that someone would have won the big prize by now.

Mathematics professors at Memorial University of Newfoundland performed the probability calculations at the request of CBC News.

The lottery corporation has invested big bucks in GeoSweep. As of a year ago, ALC had sunk $8.7 million into an equity stake in the U.K.-based firm that created the game.

GeoSweep is a lottery game similar to other ALC offerings, albeit with a digital - and geographical - twist.

Instead of picking numbers, players go online to pick a location on a map of Atlantic Canada.

The New Brunswick and Prince Edward Island governments opted into the investment, each contributing $4 million of that total. Newfoundland and Labrador and Nova Scotia opted out.

ALC also launched a wide-ranging advertising campaign to promote domestic sales of the GeoSweep game in the four Atlantic provinces. That cost about $1.5 million in the 2012-13 fiscal year, according to ALC, including the production and media costs of television, radio, print and online ads.

But the lottery corporation has repeatedly declined to disclose sales figures for the GeoSweep game — something it does routinely for other products.

Crunching the numbers

In the vacuum of GeoSweep sales data from Atlantic Lotto, CBC News went to mathematicians to see if they could crunch the numbers.

With some caveats, they did.

Memorial University mathematics professor Danny Dyer says there would have to be 32,165 tickets sold per draw to put the chance of no one winning after 327 draws at under one per cent.

In other words, says Dyer, if you sell that many tickets in each daily draw for that long, the probability of at least one win is more than 99 per cent.

Dyer cautions that those calculations assume several things:

  • the number of tickets sold in each draw is constant, which is unlikely. But he says it is still reasonable to deal with a constant number.
  • people are selecting random geos, which is probably not the case either. He suspects players are using meaningful locations such as their house, or landmarks like Signal Hill in St. John’s.

Dyer did note that there are nearly 14 million possible ticket number combinations in Lotto 6/49.

That means players are roughly six times more likely to pick the correct Geo than the winning 6/49 numbers for an individual draw.

"I don't know how many people are playing 6/49, but if we went 327 draws without someone winning that, people would definitely talk," Dyer said in an e-mail.

Memorial University mathematician Nabil Shalaby said he agreed with his colleague’s calculations.

"The number [of] 327 draws without any winner of the large prize is high to me," Shalaby noted.

CBC News asked the MUN profs to review the number of GeoSweep draws early in the week.

Since then, there have been four additional daily draws, also without a winner.

Corporation pleased with investment

ALC stresses that there are two aspects to its investment in GeoSweep — the investment in the company behind the game, and domestic sales.

"With regards to the domestic game, it is measured by its financial performance, which is driven by player response," spokeswoman Courtney Pringle-Carver noted in an e-mailed statement.

Revealing those sales figures would "inadvertently release the financial information" of the U.K.-based company that created the game.

She says ALC is happy with its investment in that company — Geonomics, formerly known as Roboreus.

Pringle-Carver points to European lottery broker Tipp24’s recent acquisition of shares from existing shareholders in the company, and investment of £10 million in new shares.

"From both a product and investment perspective, this is extremely positive," she noted.

The lottery corporation’s equity investment in the U.K.-based company that created GeoSweep is ALC’s first foray into digital and external business opportunities.

According to Pringle-Carver, ALC continues to "to explore options that have the potential to bring revenue back to the Atlantic region."

ALC is operated by the four provincial governments in the region, which receive 100 per cent of the profits.

Stagnant profit growth has led the corporation to look outside its traditional areas of business within Atlantic Canada.

Those profits remained flat in 2011-12, down less than one per cent from the previous year.