The experts also agree that the use of uncommon templates increases the expectation of winning in the event of a win that may be divided among a number of winners who choose the same digits. In Dr. Regev's opinion, the use of uncommon patterns yields a negligible improvement, and in Prof. Febich's opinion, there is insufficient data to assess whether this is a negligible or significant improvement. In other words, no position has been presented that establishes that this is a significant increase in profit expectancy.
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Dr. Regev also referred to the "reduction method", as described above, which makes it possible to guarantee the eighth prize (NIS 10), but does not change the expectation of winning compared to filling out forms at random.
Hearing of the Second Cause of Deception
- We will therefore examine the respondents' submissions, against the background of the findings of the experts' positions.
Respondent 1 - Lutont
- Respondent 1 declares on its website that it offers a choice of numbers that are "taken from the 'smart database' of LotNet – a database of numbers that is updated by Lotonet's team of experts, based on an accurate analysis of the results of the lottery lotteries over many years." The website also states that "LotNet offers you a variety of tracks to participate in the lottery. Each track contains a statistical analysis that offers the customer an increased chance of winning the first prize in the lottery," and that "LotNet believes that in order to maintain the chance of winning the first prize, it is necessary to participate in each and every lottery" [all emphases added – the undersigned].
- When asked about the smart number database, Mr. Micha Sarig, the witness on behalf of respondent 1, replied that "we have a number of methods to reduce the lottery tables [...]. If, for example, you remove from the database a sequence of 1,2, 3,4, 5,6 or sequences throughout, and this is something that has never happened either in Israel or in the world. It happened once in South Africa and there were only five sequences. There are other ways to reduce other methods and you build a smarter database that has a higher chance of coming out (p. 79 of the transcript).
- When confronted with the fact that the expert on his behalf testified that there was no way to choose a combination of numbers with a higher chance of winning, he replied, "My expert comes from academia and statistically he is right. [...] The chances of each table coming out are equal and it is possible that tomorrow the combination of 1,2, 3,4, 5,6 will come out. It can happen. But still you are building a smart database, you are not aiming for this specific lottery because it is rare. You are looking for where the center of this data sits."
- As noted, both Dr. Regev and Prof. Febich agree that there are no numbers or combinations that have better chances of winning the lottery. Subtracting certain sequences or combinations does not increase the chances of winning. In fact, Mr. Sarig also admitted that "the chances of each table coming out are equal" and that statistically there is no preference for one combination over another.
- For the avoidance of doubt, it should be clarified that it does not appear that Mr. Sarig's words indicate that they contain "a number of methods for reducing the lottery tables", are aimed at the method of reduction as described by Dr. Regev. It appears that the method described by Dr. Regev is completely different from that described by Mr. Sarig, and relates only to the eighth prize (NIS 10), and it does not appear that Mr. Sarig spoke about this.
- Sarig was also asked about the team of experts who update Lotonet's database of numbers, as presented on the website. Sarig testified that in the past there were two experts, a mathematician and a statistician, whose names he did not know how to give, and since 2004 there has been no team of experts and the only expert is Mr. Micha Sarig himself, who did not specify the nature of his expertise. In his words, "Today there is no team of experts, I am the expert" (p. 81 of the minutes). The statistical analysis that offers the client an increased chance of winning the first prize was conducted by Mr. Sarig himself (p. 82 of the minutes). It therefore follows that contrary to the statements of this respondent regarding a team of experts that operates the same smart database of numbers, in practice this "team" consists of one person, who is not claimed to be an expert mathematician or statistician, and it is not clear what he has done to improve the situation of the customers as opposed to direct purchase without the assistance of experts.
- Indeed, in the engagement agreement with respondent 1, the matter is presented in a much more modest manner. In clause 5 of the agreement, it is stated that "the participant declares that it has been explicitly explained that the company is not and cannot be responsible for the participant's chances of success in any lottery or prize. The chances of success are subject to the theory of probabilities over which the company has no control. The probabilistic assumption that arises from the company's software is that the large number of participants in the given program of the National Lottery, and the Council for the Regulation of Gambling in Sports, increases the chances of winning."
- Here, according to this section, and in contrast to the advertisement on the website, in fact the Respondent does not offer a service that includes the selection of numbers or combinations with better chances of winning the lottery. All the Company offers is group participation in the lottery, which increases the chances of winning due to the large number of participants.
- However, in this matter as well, it is in fact deceptive: increasing the chances of winning by purchasing more tickets is not a unique "statistical method", and it does not "arise from the company's software". This is a simple fact that exists wherever a person purchases more lottery tickets. In contrast to the overall representation created by the Respondent, this is not an increase in the chance as a result of the use of the unique knowledge held by the Respondent, but rather the purchase of more tickets.
- Obviously, in light of the associated costs, the alternative of buying a larger number of tickets for the same amount can also be a relevant alternative.
- However, the representation created by the Respondent makes it very difficult to compare the alternatives, since the amount invested in the lotteries is not displayed, and from all of the Respondent's representations, including those that appear on its website, it appears that there are unique statistical methods for selecting numbers that have a better chance of winning the lottery, which is not scientifically possible. The reservation clause in the engagement agreement quoted above in fact confirms this. However, the overall representation presented to the customer is contradictory and ostensibly misleading. In addition, the customer may think that this is a database operated by a team of experts, when in practice the team consists of only one person, who is not an expert in the field of mathematics or statistics.
- Moreover, as is well known, participating in the lottery as part of a group reduces the amount of the win in the same ratio. Therefore, and as explained above, the expectation of winning does not change. Moreover, taking into account the associated costs ("commission", the division of profit with the company, and the tax aspects), the profit expectancy decreases considerably.
- All of these are not presented to the clients, and what is presented to them in the ostensible publications does not reflect the situation as it is.
- The conclusion is therefore that there is a reasonable chance that it will be determined in the main proceeding that respondent 1 is making misleading representations as to the nature of the service it offers and does not provide sufficient information in this context.
Respondent 2 - Mega
- Respondent No. 2 declares on its website that "only with us will you receive a selection of packages that greatly improve the chances of winning." The Respondent also notes that "Group purchase of lottery tickets greatly improves the chances of winning! Your column participates with columns of other members of the group." The Respondent also presents that "all numbers are chosen using proven mathematical methods that increase the chances of winning! "The club provides its customers with advanced lottery products that significantly improve the chances of winning and the amount of winnings"; and that "the lottery club selects and sends the lottery numbers using a tested statistical method, developed by the best lottery experts and which significantly increases the chances of winning." On the "Tips for Improving Your Chances of Winning the Lottery" page, the Respondent provides advice for choosing number combinations with better chances of winning, such as avoiding choosing particularly low or particularly high sequences of numbers, or avoiding choosing a combination that includes only even or odd numbers [all emphases added - the undersigned].
- Respondent No. 2's bylaws include clauses in a similar vein: "The mathematical methods developed by Mega of 45 Rothschild Street, Rishon LeZion, enable the construction of unique products for the programs: "Mega Lottery 10x", "Mega Double" and "Chance". According to these methods, the chances of winning, as well as the sums to win, are significantly higher than those that can be won by other means of participation in lotteries currently held in the market. The mathematical methods in question allow for a significant reduction in the number of active number combinations in the regular lottery and chance draws, and therefore the chances of winning are significantly increased, all of which are carried out in accordance with the plans of the factory and the Mifal HaPais regulations." It is also noted that "within the framework of the Mega method, there are programs for personal bets as well as programs for bets/lotteries for large participants, which allow participants to have statistically greater chances of winning."
- On the other hand, the Respondent's Regulations also include, like the other Respondents' Regulations, more qualified clauses: "The Mega Club emphasizes, for the avoidance of doubt, that the presentation of a Client Agreement on the Website constitutes, inter alia, a "declaration" whereby the following facts are known and agreed upon by him (the Client): The Mega Club hereby declares that it is not obligated to its customers as to the chances of winning the Participants and as to any prize(s) or amount(s). The Subscriber hereby declares that he or anyone on his behalf hereby waives any right to make a claim on this matter against the Mega Club, its representative, or anyone on its behalf. The probability of the customer winning this or that prize in lotteries of these types, which includes the Mega method, is in accordance with the probability of the customer winning lotteries of this type." Elsewhere in the regulations, it is stated: "The Lottery is the one that operates the lottery and/or the chance as aforesaid. The Mega Club has no control over these lotteries at all. Therefore, it is hereby declared and agreed that the Mega Club does not guarantee any winning of any prize and is not even responsible for the chances of success of the subscriber in any lottery or any prize on behalf of the lottery."
- Notwithstanding the aforesaid, when Mr. Jan Miller, the witness on behalf of respondent No. 2, was asked about the possibility of increasing the chances of winning, he replied that this is possible by choosing a variety of combinations, which include both even and odd numbers, as opposed to choosing combinations that include only even numbers or only odd numbers (p. 128 of the transcript). Mr. Miller also noted that these are the mathematical methods that "allow for a significant reduction in the number of active number combinations" and increase the chances of winning "significantly", which are stated in the Respondent's bylaws. Here, too, it should be noted that despite the common name that includes the term "tzimtzum", this is a completely different method from the one that Dr. Regev called in her opinion "the method of reducing". When confronted with the fact that the expert on his behalf believes that there are no combinations of numbers that have a higher chance of winning the lottery, Mr. Miller replied (p. 129 of the minutes of February 5, 2024):
"A. I don't know on what basis he based it, but it's not true. It has nothing to do with what I'm presenting here. In terms of combinations, it depends on what the combinations are. I don't know what it is and what it's based on, what is meant here. I haven't fully studied the opinion, so I can't answer any of the clauses in it without understanding what exactly it's about.
- We understood from the discussion so far that you think that there are combinations that have a better chance of winning the lottery.
- Yes, and I even prove it."
When asked about these methods, Prof. Fibich replied as follows (pp. 69-70 of the transcript):