Posted on | October 27, 2008 | No Comments
I have been doing quite a bit of travelling recently, and I keep walking past those supercars being given away in lotteries and prize draws- you know the ones: they are generally Aston Martin DB5´s, Ferraris high spec Beemers or Mercedes SL55s. Occasionally you´ll see a soft top Mini Cooper.
The competitions are generally run by a company called BestoftheBest. But I have started wondering- is it worth entering, and how do the odds stack up against bets you can make at a casino?
Here´s how it works: you buy a ticket into the draw and enter into a skill competition (this makes it legal under UK law) – generally a Spot The Ball competition or something. Unlike other free prize draws (which basically use the competition to collect information that they can then use for marketing or to sell on to other companies to generate leads), Best of the Best make money out of the ticket sales themselves. So they stump up the money (a more likely scenario is that they get the motor on a good sale or return deal as it they are showing off the car at airports where there are lots of successful businessmen and women milling about): let´s say they procure a Bentley, a Porsche Carrera or something similar.
They then pay for the stand at the airport (such as Heathrow, Gatwick, Bristol etc), employ some sales staff and along come the punters who are stopped in their tracks with a bit of time to spare and with a gleaming Ferrari in front of them.
Should you trust these competitions? Well, in as far as they are set up legitimately- yes. This is a company that is listed on the AIM and they are audited by an 3rd party accounting firm.
But what about the million dollar question? What are the odds?- well, on this point- the one big downside that we can see is that they do not reveal the number of entries for each super car competition.
So this is where we have put our detectives to work. If you study their company accounts, you´ll see that each car prize generates revenues (ie ticket sales) of around £450,000 for a super car valued at around £100,000. – ie their gross profit margin is around 400%. Ticket prices range from £20 to £80- depending on where you buy the tickets (online or at the airport), so your odds are probably around 1:10,000 and maybe higher. We are guessing (intelligently) of course, but the odds will be in the thousands anyway.
Before you scoff too much- compare that with most prize draw competitions and it looks OK (generally the odds are in the millions). BUT- you are putting down a sizeable bet. Would you stick £80 on a 1:10,000 long shot at The Cheltenham Gold Cup?
But remember that there is a skill element involved as well (ie spot the ball). While it is impossible for us to say exactly how this improves your odds, we can estimate that if you are a Spot The Ball Expert, you might improve your odds by 10 to 100 fold. So maybe you can start to get odds of around 100:1. This seems more like it, but it´s still a long shot.
Are the odds better than you´ll get at an online casino? Absolutely not- particularly if you play a game with a low house edge (like blackjack or baccarat).
Would we go for it? Well- if we were thinking rationally, we wouldn´t. But on the other hand, the reason why these are generally held at airports is because
a) You´ve got time to kill
b) The cars look fantastic on the stands meaning that you might be tempted to “go for it” on an gut decision
c) You could be in a great mood if you are off on holiday, or
d) You might be so jet lagged that you´ll have a punt anyway.
Just remember- here´s how you work out the (approximate) odds:
1. Ask the salesperson the value of the car, then knock 20% off the price to assume they are getting a bulk discount and some cash for promoting the cars.
2. Multiply that figure by 4.
3. Divide the total by the cost of the tickets.
If you win, give us a ride in your Lambourghini please!