Ansuz07

Of course, even that is kind of a lie.

Lotteries were sold to us as a way to increase school funding without a commensurate increase in taxes. Of course, once the lottery money started flowing in, states began to decrease funding that came from taxes. So the net result was schools got more or less the same amount of funding, and states were able to move the budget reductions to other programs. It was just a complex way to have lottery money go into the general fund.

No more so than every other banking model.

At least this help motivate people to save money. Rather than waste it on a lottery ticket, they save the cash in case they need it. With nearly 60% of Americans having less than $500 in savings any system that promotes savings is a good system.

Agreed - I'm a huge fan of what you are doing for exactly that reason. State lotteries are just a shadow tax on people that don't understand statistics.

The sweepstakes comment is interesting, but it feels like that might be a distinction without a difference to my non-lawyer self. I assume you've had legal experts weigh in to ensure this is all on the up and up?

Yup - it will always be objectively better to just put your money in an investment where you get the return directly.

What u/two_cheeseburgers misses (and you have pointed out) is that human beings are not objective and don't always make rational decisions. If they did, lotteries wouldn't exist at all. What you are doing is great - finding a way to gamify good behaviors and promote savings for people who would otherwise waste that money on lotteries.

We can never let perfect become the enemy of the good and have to meet people where they are. If this helps people save money who otherwise wouldn't who cares if it is not the most optimal way they "might" save? They are saving because of this, and that is a net benefit for everyone involved.

Isn’t the loss the % interest your users are giving up now that you are below high yield savings accounts interest rate?

Of course it is, but the target market for product like these is they type of person that isn't motivated by the "high" yields of traditional savings accounts.

Like someone with $200 in cash could put their money in a high yield savings account, but even at 5% they'd only see an extra $10 - that may not be enough to motivate them to save that money, instead blowing it on lotto tickets to try and win millions. A system like this will encourage them to instead save that money for a chance to win whatever the prizes are.

Is it suboptimal on paper - 100%, but humans make suboptimal decisions all the time. This is a better system than traditional lotteries, which are the people targetted.