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yottasavings1524 karma

A traditional bank pays a tiny amount of interest to all of its depositors. We work with online banks that pay a higher yield and we use that yield to pay out most of the prizes. We are skewing the interest payments. This is a very common thing outside of the U.S. It's called Prize Linked Savings (https://en.wikipedia.org/wiki/Prize-linked_savings_account).

For the $10 million jackpot we work with an insurance company to be able to offer that.

yottasavings993 karma

They weren't familiar at first, but after explaining exactly how it works (it's really no different fundamentally from a business model perspective as a normal savings account) and showing the success of similar products in other countries, like Premium Bonds in the UK, Bonus Bonds in New Zealand, and Save to Win in Michigan, it wasn't hard to get them on board.

Plus, there's a ton of data around how prize-linked savings programs are beneficial for society as a whole. That helps too.

yottasavings688 karma

Check out http://beniverson.org/papers/MaMa.pdf! It was tried in South Africa and got so popular that the lottery wanted to shut it down. Sad really

yottasavings487 karma

This looks like a typo. For deposits over $25,000, you get a ticket for every $150. We will fix this thank you for flagging!

yottasavings474 karma

Correct - we haven’t had a grand prize ($10m) winner yet. We anticipate keeping the grand prize at $10 million after someone wins. We currently partner with an insurance company who would pay out the jackpot when someone wins. You can win multiple prizes every week -- For example, say you deposit $250, you would earn 10 recurring tickets to our weekly drawings, this week 1 ticket could win you $0.10, 1 ticket could win you $10, and the other 8 tickets could win $0. Next week tickets reset and those 10 tickets could earn you prizes again.