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Should prize-linked savings accounts be legal in the United States?
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July 8th, 2011
I was chatting with a buddy about prize-linked savings accounts. Here’s how they might work:
For each deposit you make into an account, of an amount that is over a certain threshold, you are entered to win a monthly drawing. The bank randomly chooses people with prized-linked savings accounts to win prizes. The prize money comes from the amount the banks would have paid out in interest (the savings accounts pay little or no interest).
It is illegal because it is essentially a lottery, and lotteries (besides state-run lotteries) are illegal.
An argument for:
People with low income buy lottery tickets, but don’t save money. This would get them to save money.
An argument against:
This is legalizing gambling and would have a corrupting influence on financial institutions.
What are your thoughts?
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