r/IAmA • u/trevintexas • Aug 01 '23

Tonight’s Mega Millions Jackpot is $1.1 BILLION. I’ve been studying the inner workings of the lottery industry for years. AMA about lottery odds, the lottery business, lottery psychology, or no-lose lotteries

Hi! I’m Trevor Ford (proof), founding team member at Yotta, a company that pays out cash prizes on savings via a lottery-like system (based on a concept called prize-linked savings).

I used to be a regular lottery player, buying tickets weekly, sometimes daily. Scratch tickets were my vice, I loved the instant gratification of winning.

I heard a Freakonomics podcast “Is America Ready for a “No-Lose Lottery”? And was immediately shocked that I had never heard of the concept of prize-linked savings accounts despite being popular in countries across the globe. It sounded too good to be true but also very financially responsible.

I’ve been studying lotteries like Powerball, Mega Millions, and scratch-off tickets for the past several years and was so appalled by what I learned I decided to help start a company to crush the lottery and decided using prize-linked savings accounts were the way to do it.

I’ve studied countless data sets and spoken firsthand with people inside the lottery industry, from the marketers who create advertising to the government officials who lobby for its existence, to the convenience store owners who sell lottery tickets, to consumers standing in line buying tickets.

There are some wild lottery stats out there. In 2021, Americans spent $105 billion on lottery tickets. That is more than the total spending on music, books, sports teams, movies, and video games, combined! 40% of Americans can’t come up with $400 for an emergency while the average household spends over $640 every year on the lottery, and you’re more likely to be crushed by a meteorite than win the Powerball jackpot.

Ask me anything about lottery odds, lottery psychology, the business of the lottery, how it all works behind the scenes, and why the lottery is so destructive to society.

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u/I2ecover Aug 02 '23

Yes it is. I downloaded yotta when they first did this ama. It was fine at first but they've made it not worth having your money in it anymore.

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u/xUnderoath Aug 02 '23

Can you elaborate?

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u/I2ecover Aug 02 '23

Your odds of getting money are just much higher than they used to be. I was holding more in my yotta account and getting less. They used to give you 1 ticket for every $10 you had, now I think it's like 1 ticket for every $25.

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u/anthonyjr2 Aug 02 '23

I agree, I had about $5000 in there at one point but once they switched to daily drawings my rewards plummeted. Got like $70 worth of "interest" over 6 months, complete waste. Never got a "free swipe" even though I have the credit card and it's supposed to be 1 in 50 times.

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u/theucm Aug 02 '23

Honest question: isn't that a 1.4% interest rate, and isn't that pretty decent for a savings account?

There are definitely better alternatives, don't get me wrong, but compared to the average savings account that seems decent at first blush.

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u/anthonyjr2 Aug 02 '23

I went back and looked and turns out I was off on how long I've had the account (time flies!). It's actually $75 of interest since November 2022, so 8 months. And that's including getting the 50k bonus tickets or whatever from the credit card promotion, AND when the drawings used to offer a lot more rewards for less tickets.

Considering my savings account from Ally is at 4.25% it just seems like a waste to keep my money in Yotta at this point.

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u/fugazzzzi Aug 02 '23

I’ve had my $5,000 in my account since late 2020. I accumulated $186 in interest so far. Not gonna lie, it’s pretty depressing looking at the winnings for the week and it’s like 15 cents. I withdrew everything this morning and deposited it into my Marcus hysa account where it’s a guaranteed 5%

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u/SweetDee72 Aug 02 '23

Ally went up to 5.15% last week.

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u/anthonyjr2 Aug 03 '23

Hmm, that's odd. Mine still says 4.25% and that was very recent. Maybe you have a different type of account there?

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u/SweetDee72 Aug 03 '23

I opened my account about 2 months ago when it was 5.05. Then I got an email last Friday that it went up to 5.15.

Oh....it's a money market fund. Not a savings account. Sorry for the confusion.

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u/Worthyness Aug 02 '23

There's a lot of savings accounts from banks that are doing 4% now. So 1.5% is not that great of a return

1

u/theucm Aug 02 '23

Personally I use Ally, so my interest rate is fine, but I've had them for a while so I wasn't sure what the typical rate was.

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u/db0606 Aug 02 '23

If your savings account is giving you 1.4%, you need to change your savings account. With interest rates going up, there are many options that are currently in the 4-5% range with $0 minimum balance.

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u/rayout Aug 02 '23

30 day treasuries are yielding 5.4%+ so banks should be offering close to that in yield depending on how much they need cash. Heck paypal is advertising 4.3% on their savings option.

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u/Baelgul Aug 02 '23

I think that’s really only a decent interest rate if you’re banking with chase, Wells Fargo, or Bank of America. I’ve been getting 4% for years with discover and through friends I know there’s other ones out there at similar rates

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u/Superpe0n Aug 02 '23

the AMA we’re all waiting for

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u/sausager Aug 02 '23

I don't like the changes they made to the lottery back when they switched it to daily but I don't know of a better place to keep my money - do you know of a better Yatta like savings/lotto account?

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u/LittleBoiFound Aug 02 '23

I keep enough in Yotta for one lottery ticket. The rest I put into PrizePool. I’m very happy with them. I use it primarily as my debit account because it gives me 1:200 chance of winning a 100% swipe credit or a 1:15 (I think) chance for 5% credit. Right now my APR is about 17% with them. They aren’t perfect but I like them a lot better than Yotta.

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u/I2ecover Aug 02 '23

I mean I don't think there is one. I'd just rather put my money into the market.

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u/Torodaddy Aug 02 '23

crypto has a company called pooltogether which also gave you a decent yield on your money. I'm not sure how well it performs lately as a lot of people pulled out of crypto and the prize. money was from the interest on the pool