How lotteries differ between brokers

The short answer

Lotteries work differently at every broker. Applying for the same listing from a different place genuinely changes your odds.

There are three broad types. A fully equal draw gives every applicant one ticket, whatever their balance. A money-weighted draw favours whoever applied for more shares. A record-weighted draw favours customers with more trading history or accumulated points at that broker.

Most brokers combine these within a single allocation — ten per cent fully equal and the rest weighted by record, for example. If your capital is limited, the thing to look at is how large the fully equal portion is.

Fully equal — one ticket each

Every applicant gets exactly one ticket. Someone who opened an account yesterday has precisely the same chance as a customer of ten years. For a beginner this is both the easiest structure to understand and the hardest to be disadvantaged by.

Some brokers use it for the entire retail allocation. Monex Securities draws 100% of its retail allocation this way, as does DMM.com Securities.

Others use it for part. Matsui Securities applies it to at least 70% of the planned allocation, and Daiwa Connect to 70%, with the remaining 30% going to a weighted second draw. Daiwa, Nomura and Mizuho each apply it to around 10% of their retail allocation.

Ten per cent sounds small, but on listings where those firms act as lead underwriter the total number of shares is very large, so ten per cent of it is not a small number of allocations.

Weighted by money

Here the number of tickets rises with the number of shares you applied for. Someone applying for 1,000 shares beats someone applying for 100. Good if you have capital; bad if you do not.

SBI Securities draws 60% of its online allocation this way.

Note that even brokers using a fully equal draw can behave this way on large listings where the application cap exceeds one lot of 100 shares — Rakuten is an example. Most listings cap applications at one lot, in which case it is effectively one ticket each.

Weighted by your record

Your odds depend on your trading history or assets held at that broker. SMBC Nikko puts up to 5% of its online allocation into a tiered draw where the top tier holds twenty-five times the tickets of the bottom. SBI Neotrade tiers 90% of its allocation, giving between 1 and 100 tickets based on the previous month. Okasan Online uses three tiers based on trading record.

A beginner obviously starts at the bottom, so this portion works against you. But each of these brokers also reserves a portion that ignores your record entirely — 10% at SMBC Nikko, 10% at SBI Neotrade, and at least 10% at Okasan Online through its third draw. Applying with no history at all is still worth doing.

Where losing accumulates

SBI Securities runs a scheme of its own. Every time you lose you earn one point, and spending those points later enters you into a dedicated pool covering 30% of the online allocation, where shares go to whoever spent the most points.

Losing is not wasted, so the people who keep applying steadily are the ones this rewards.

Where being young helps

Daiwa Connect is unusual. Its remaining 30% weighted draw gives extra tickets for conditions like being 39 or under, holding a NISA account, or running a regular investment trust contribution. The advantage comes from who you are rather than how much you have traded, which makes it a rare case where a young beginner is favoured.

The other difference — when the draw happens

Separately from the method, there is the question of timing. Most brokers draw after the application window closes. Some run a late-type draw covering people who completed a purchase step after the offer price was set.

That timing lets you decide after seeing results elsewhere — skip it because you already won, or concentrate on it because you did not.

What this means in practice

Build around brokers with a large fully equal portion. That is where a small balance competes on level terms — Monex, DMM and Matsui being the clearest examples.

Hold accounts at several brokers, because each runs its own draw and the number of accounts is the number of entries.

Mix in brokers that require no deposit. The same money then covers applications at several places at once, and the smaller your capital the more that matters.

In summary

The three types are fully equal, money-weighted and record-weighted, and most brokers combine them. With limited capital, favour a large fully equal portion. Even record-weighted brokers reserve roughly 10% for people with no history. A late-type draw lets you decide last. And whichever the method, an application you never made cannot win — increasing the number of accounts is the thing that works.

Brokers do change these rules. Check the current terms on their own site before applying.