What this calculator works out
Every prize draw asks the same question in different clothes: is a small chance of the prize worth what the entry costs? This calculator answers it with expected value — the prize multiplied by your chance of winning it — and sets that against what you spend. The result is what a very large number of identical entries would average out to per entry, and for almost every paid draw it is negative. The page explains why that is the design rather than a flaw, and how to use the figure anyway.
It handles the details that change the answer in practice: several prizes rather than one, a cap on the value you would honestly put on the prize (a holiday you would never have booked is not worth its brochure price to you), and the extra costs that quietly attach to some entries — a stamp, a premium-rate text, a phone call at 90p a minute.
Expected value is a comparison tool, not a forecast. It cannot tell you what will happen to your entry; it tells you which of two draws is the better deal, and by how much, and it makes visible how much of your money is buying the chance and how much is going somewhere else.
The prize, the entries and the cost
How the calculation works
Chance of winning = your entries ÷ total entries
Expected value of your entries = prize × prizes × chance
Spend = (cost per entry + other costs) × your entries
Net expected value = expected value − spend
Return per pound = expected value ÷ spendA £500 prize, a thousand entries and one entry of your own: the chance is 1 in 1,000, so the expected value is £500 × 0.001 = 50p. The entry cost £1. The net expected value is −50p, and the return per pound is 50p — half of what you put in comes back, on average, as prize.
With several prizes of the same value, the expected value simply multiplies, because expected value adds up even when the chances do not: five £100 prizes among a thousand entries are worth exactly the same 50p to one entry as a single £500 prize is. Where a draw has prizes of different values, run the calculator once per prize tier and add the results.
The return per pound figure is the one to compare draws with. It is the share of the money going in that comes back out as prizes — what the gambling industry calls the return to player. A charity raffle returning 40p in the pound is not being mean; the other 60p is the donation. A commercial draw returning 15p in the pound is a different proposition.
A net expected value of −50p does not mean you will lose 50p. This entry will either win £500 or win nothing; there is no outcome in which you lose 50p. The figure describes what would happen on average across a very large number of identical entries. Its value is in comparing offers and in showing where the money goes — not in telling you what today's draw holds.
Worked example: a £500 prize at £1 a ticket
A local charity's Christmas draw offers £500 in cash, sells a thousand tickets at £1 each, and you buy one.
Spend: £1.00 | Net expected value: −£0.50
1 of 1,000 entries: 0.100% chance of the prize (1 in 1,000).
Return per pound: 50p of every £1 comes back as prize, on average across many entries.
Typical of a charity raffle or society lottery — the rest is the fundraising.
Expected value is a long-run average, not a prediction of this entry. The prize value should be what it is worth to you, not its advertised price. Entry totals are usually estimates.
The expected value of your ticket is £0.50 against a spend of £1.00: a net expected value of −£0.50, and a return of 50p in the pound. Half the money coming in goes back out as the prize; the other half is the charity's income, which is the reason the draw exists.
Now run the same prize through a premium-rate text draw: 20,000 entries at £1.50 a text plus a 15p network charge. The chance falls to 1 in 20,000, the expected value to 2.5p, and the return per pound to under 2p. The prize is identical. The difference is entirely in how many people are paying and how much of each payment is disappearing before it reaches the prize fund — and the same draw's free postal route, at the price of a stamp, returns that 2.5p of expected value for the price of a stamp, which is better value than the paid route and worse than the charity raffle.
What different kinds of draw return
Putting some common cases through the calculation makes the pattern clear. The entry totals are working assumptions; the return-per-pound column is what they imply.
| Draw | Prize | Entries | Cost | Expected value | Return per £ |
|---|---|---|---|---|---|
| Fete raffle, one prize | £50 hamper | 300 at £1 | £1 | 17p | 17p |
| Fete raffle, ten prizes | 10 × £30 | 300 at £1 | £1 | £1.00 | £1.00 |
| Charity postal raffle | £1,000 cash | 5,000 at £1 | £1 | 20p | 20p |
| Premium-rate text draw | £1,000 cash | 20,000 at £1.50 + network charge | £1.65 | 5p | 3p |
| Free postal route to the same draw | £1,000 cash | 20,000 | stamp only | 5p | about 6p per stamp |
| Free "comment to enter" draw | £100 voucher | 2,000 | nothing | 5p | free — any return is positive |
Three things stand out. Prizes donated to a fete raffle can make it the only paid draw with a return of a pound per pound, because nothing had to be bought. Premium-rate entry is where value disappears: the network charge is a cost of entry as surely as the ticket price. And a free entry has no spend, so its expected value is positive however tiny the chance — which is why the free postal route, where one exists, is nearly always the best-value way into a paid draw.
Understanding the result
Return per pound above 50p is generous by the standards of paid draws. It usually means donated prizes or a small entry pool.
20p to 50p is typical of charity raffles and society lotteries, where the gap is the fundraising. Buy on the basis of the cause, and treat the chance as a bonus.
Below 20p means most of the money is going to the promoter, the prize supplier or the phone network rather than into prizes. That is not necessarily improper — a commercial promotion is advertising, paid for by entrants — but it is a poor use of money if the chance was the point.
Free entries always show a positive expected value. The only cost is your time and, for postal routes, a stamp, so enter the stamp in the other-costs box to see a real figure.
The single biggest distortion in this calculation is the prize value. A £3,000 "luxury weekend" that you would never have paid for, cannot take on the dates offered and would need to pay travel to reach is not worth £3,000 to you. Enter what you would actually pay for it, or what you could sell it for. Cash prizes are the only ones whose value is exactly what it says.
Free entry routes and why they exist
The lottery rules described on this page are those of the Gambling Act 2005, which applies in England, Scotland and Wales. Northern Ireland has its own legislation and its own limits.
A draw that requires payment to enter, with prizes decided by chance, is a lottery under the Gambling Act 2005, and lotteries can only be run by good causes with a licence or registration. A commercial promoter therefore needs the draw not to require payment, and the Act provides the mechanism: offer a free way to enter. The Gambling Commission's advice note sets the conditions — the free route must be genuinely available, must be no less convenient than the paid route, and must be communicated clearly, and entries by either route must have the same chance.
That is why so many draws carry a postal address in the small print. It is not a courtesy; it is the legal basis on which the promoter avoids running an illegal lottery. The CAP Code adds that the free route must be explained clearly and prominently, and that any costs of the paid route must be stated.
For the entrant, the consequence is simple: the free route is the same draw at the price of a stamp. It is often used by a small fraction of entrants, which does not change the odds for a single draw — every entry has the same chance — but does mean the promoter's costs are being carried by the people who paid.
When not to use this calculator
Not as a reason to spend more. Buying more entries scales the expected value and the spend together, so the net figure gets worse in exact proportion. The calculator will show this, and it is the opposite of an argument for buying more.
Not for judged competitions. Where a person picks the winner, no chance figure applies, and expected value cannot be calculated.
Not as financial advice. Paid draws have a negative expected value by design. If the question is where to put money you cannot afford to lose, the answer is not in any draw, and the figure here should not be read as suggesting one is better than none.
Not for the National Lottery's prize structure without care. National Lottery games have many prize tiers with different values and different odds; the calculator can handle one tier at a time, but the game's own published return is the easier figure to use.
Common mistakes
- Reading expected value as what will happen. It is a long-run average. Your entry wins or it does not.
- Using the advertised prize value. Use what the prize is worth to you, which for most non-cash prizes is less.
- Leaving out the entry costs that are not the ticket. Postage, premium-rate charges and network fees are all cost of entry.
- Expecting a positive figure from a paid draw. If it were positive, the draw would lose money on every entry. The gap funds the prize, the promoter or the cause.
- Ignoring the free route. Where one exists it is the same draw at almost no cost.
- Buying more entries to improve the value. More entries multiply the loss along with the chance.
Frequently asked questions
Why is the expected value nearly always negative?
Because the draw has to fund something. A commercial promotion funds marketing and profit; a charity draw funds the cause; a lottery funds prizes, good causes, duty and operating costs. If the expected value were positive the promoter would lose money on every entry, so paid draws are built to return less than they take. That is structural, not evidence of anything improper — but it is worth seeing the size of the gap before deciding.
What is return to player?
The share of money staked that comes back to players as prizes, across all players and a long run — the same thing as the return-per-pound figure here. Licensed gambling products publish it; raffles and promotions do not, which is what this calculator estimates. A figure of 50p in the pound means half the money goes into prizes.
Does a free entry route really have the same chance?
It has to. The Gambling Commission's conditions for a draw to count as free entry include that entries by the free route must be treated the same as paid entries, and the CAP Code requires the free route to be explained clearly. A promoter treating postal entries as second class is running an illegal lottery, not a free draw.
How should I think about premium-rate entry?
As a cost of entry that is often larger than the ticket. A £1.50 text plus the network's standard charge, or a call at 90p a minute for a two-minute recorded message, should all go in the other-costs box. Once they are included, premium-rate draws are typically the lowest-return way to enter anything, and the free postal route to the same draw is the highest.
Is a lottery or draw a reasonable use of money?
As entertainment or as a donation with a budget set in advance, that is a personal choice. As a way to make money it is not: the expected return is below the stake by design and no pattern of entries changes that. If gambling is causing difficulty for you or someone you know, the National Gambling Helpline is free and confidential, 24 hours a day: 0808 8020 133 in England and Scotland, or 0808 2819 265 in Wales. GambleAware lists other ways to get help.
Is what I enter stored?
No. Everything is calculated in your browser and nothing is transmitted or retained.
Related tools
References
These organisations publish the guidance behind this page.
- Gambling Commission — Prize competitions and free draws: the requirements of the Gambling Act 2005 — where the legal line falls between a lottery, a free draw and a genuine skill competition
- Committee of Advertising Practice — CAP Code section 8, promotional marketing — the rules a UK prize promotion must follow: a clear free-entry route, no exaggerating the chance of winning, independent draws and published winners
- GambleAware — Get help now — free, confidential support and the National Gambling Helpline
External guidance changes. Check the current position at the source before relying on it for a decision that matters.