Intro To How To Win (or Lose) Red Hot 7 Scratch It Cards

This is a study on how you can fairly win or unfairly lose from playing scratch-off cards. To win is not the same as to earn or profit. You may win a single card but you still lose a big amount of money.

As guinea pig or subject of the study is the Red Hot 7s scratch-it card game being sold by PCSO. At the end of the series, we may be able to theoretically conclude the possibility or probability of winning or losing from playing any scratch-off card games. As a result, this will guide you whether you should continue or not playing any scratch-off game cards.

If you want to find out how many cards should you buy to win, go directly to the end of this post.

How To Play Red Hot 7 Scratchers

There are 9 squares on a Red Hot 7 card arranged 3x3, similar to a tic-tac-toe. If you match all sevens in a column or row or diagonal, you win a specific amount of money. The price money ranges from ₱20 to – ₱77,777 depending on the row or column that you matched. If you matched the diagonal column, you win the jackpot prize of ₱77,777.

Objectives of the Study

The objectives of the study are

  • To find out how many cards should you play in order to win a prize money. 
  • In another context, to find out how many possible winning cards are there in a group of consecutive cards.
  • If there are winning cards in a certain group of cards, are you going to profit or lose?

Theoretical Presentation

Scratch-off cards are printed with pre-determined winning cards based on simulated randomness. For that reason, the capitalists know beforehand how much they are going to profit once the whole batch of cards are completely sold out. Remember that producing and selling scratch-off cards is a business; and no capitalists would invest on it if they knew that they would not profit big from it. With that in mind, also remember that you are playing the game, not to profit for yourselves, but to lose the game in order for the capitalists to profit. Sounds logical? It is!

Furthermore, the higher the payout prize, lesser is the chance of winning. For that reason, I have chosen the Red Hot 7s scratch-off game cards because the payout prizes for this game are the lowest compared to other scratch-off game cards.

How Many Individuals Play Scratch-Off Cards

In UK, more than 70% over 18 years old play the lottery. That's about 45 million people. Unfortunately, there are no existing statistics for other countries, so we are just going to use assumptions.

In the Philippines, 55% of lottery net receipts goes to prizes (Source: Wikepedia). We have no idea about the exact percentage of gross receipts, so we will just assume net being gross. We are now going to do a conservative estimate as to how many play the lottery a day by choosing a cold day (a day when the jackpot is still small) and a not-so popular lotto system, which is lotto 6/42. From this estimate, we will assume the number of scratch-off cards players.

On April 20, 2017, the jackpot prize for lotto 6/42 was ₱7,272,936. Prior to that, it was the minimum payout prize of ₱6 million. In the next draw (which is a day after), the payout prize was ₱9,898,988. Therefore, the increase in payout prize was ₱2,626,052. If that was 55%, 100% is equivalent to ₱4,774,640. Roughly, that's about 238,732 tickets sold in two days; or 119,366 a day. A player may buy more than one ticket, so let's assume that a player plays 2 tickets on an average. That means, about 50,000 individuals play the 6/42 lottery a day during cold seasons (when the jackpot is relatively small). Let's assume further that the number of players a day do not deviate significantly.

Not all lotto 6/42 players buy scratch-off cards. Following the 10% rule, let's assume that 5,000 individuals play the scratch-off cards a day.

How Many Cards Are Printed Per Batch Order?

The number of cards printed per batch vary per job order depending on the capitalist's target profit. For every printed batch, the capitalist's profit is already pre-determined. Therefore, he already knows how much he is going to earn. So, if you are going to enter into this kind of business, it's a sure all-win type of business (that is of course, if you could sell all the cards).

Each card may cost only $0.05 or ₱2.50 (based on a website that prints scratch-off cards). If you are selling each card for ₱20, a sold card gives you ₱17.50 profit. If for example, a capitalist can sell 10,000 cards a day, he profits ₱175,000 a day; or ₱5.25 million a month; or ₱63 million a year.

Now, let's use the 5000 individuals assumed number of players.

If a capitalist can target 5000 players a day who each buy two cards, then he can order 300,000 cards a month; or 3.6 million cards printed out a year.

How Many Possible Winning Cards Per Batch

If 55% goes to prize fund, 55% of ₱63 million is ₱34,650,000. That's the amount allotted to prizes.

Using our guinea pig Red Hot 7s, if the maximum prize that a card can win is ₱77,777 then only 445 cards out of 3.6 million cards are winning cards. That's just about one winner a day. If the maximum prize per card is ₱20, then out of 3.6 million cards, 1,732,500 cards are winning cards. In other words, for every 2 cards, 1 is a winning card worth ₱20. This ratio changes if other minor prizes are included.

It is important to include minor prizes in this game because the customer must experience winning a card even just once, even just a minor prize. Psychologically, if a player has experienced winning, it makes him to keep on buying the game cards even if in truth, he is actually losing money, not realising that there's a big difference between winning and profiting. Remember that when a person wins, the brain releases happy or excitement hormones. For that reason, the person would have the tendency to repeat the same activity that brought him happiness. If not controlled, the activity may lead to an addiction.

With that in mind, now you know that it is possible that in a batch of scratch-off cards, there are no winning cards that pay out a major prize money. Also, the experience of winning is part of the game in order to push the players to keep on playing.

Let's Summarise Our Assumptions

  1. For the purpose of establishing a population,  5000 individuals are likely to buy scratch-off cards a day.
  2. Each individual may buy two cards a day making 10,000 cards sold every day.
  3. The experience of winning is part of the game to attract you to play again. This is essential in this type of business.
  4. There are no winning cards that pay major prizes, only minor prizes for the same reason mentioned in #3 above.
  5. For every 2 cards, one wins the least of the prizes; that is a ratio 1:2 or 50%. If 50% of the whole batch of cards are winning cards, then there is no way that these winning cards can pay out a major prize.
  6. The higher the payout prize, the lesser the probability of winning.

Study #1: Playing 5 Cards

We are now going to test our assumption that for every 2 cards, one wins the least of the minor prizes.

To find out the chances of winning, we start by trying 5 cards with consecutive numbers in a series. For my first test, I bought cards numbered 109-352610-031 to 035. The result. None of the cards was a winning card. At this point, I already lost ₱100.

I tried the second time. On another date, I bought  5 cards with number series 109-352807-071 to 074. The result: two of the cards were winning cards. One card won ₱40; the other won ₱20. In this batch, though I won sixty pesos, I also lost ₱40. So far, I have won ₱60 out of 10 cards worth ₱200  – but I still lost ₱140.

Third try. Again, on another date, I bought 5 Red Hot 7s cards. These cards are numbered 109-373666-027 to 031. The result. One card was a winning card worth ₱20. In this batch, I lost ₱80. At this point, I have already risked ₱300. I have won so far ₱80. But all in all, I lost ₱220.

Therefore, out of 15 cards, 3 cards were winning cards making one winning card for every 5 cards; i.e. a ratio of 1:5. This ratio is even worse compared to our assumption 1:2. However, this may also mean that the winning cards pay out three minor prizes; perhaps, 8% pay out ₱20, 6% pay out ₱40, and 8% pay out ₱70. In other words, for every 5 cards you may win ₱20, ₱40 or ₱70. The sad thing is that even if you win ₱70 for every 5 cards, you still lose ₱30.

For a detailed calculation, you may view online the spreadsheet.