The No-Lose Lottery

Sep 7, 2023

- Sebastien Lasseur

- Sebastien Lasseur

A novel solution to America's savings problem.

America has a savings problem.

A third of Americans would have trouble covering a surprise expense of $400. [1]

The “savings gap” – the current level of savings vs. what people need for retirement – is $3.7 trillion.[2]

Americans get this. 80 percent of bank customers with traditional savings accounts think they have less in those accounts than they should.

There are many reasons why this problem exists. One of them is that the design of most savings products does not meet customers where they are.

Even with record interest rates, the pitch to get people to save is, “Hey if you save $1,000 with us in a savings account, we’ll give you $4 back!” Is it really a surprise that customers are not excited about that deal?

Prize-linked savings accounts (PLSAs) offer a different deal, one that is exciting and gives people with less means a real incentive to save.

PLSAs are raffle-style drawings that encourage you to make regular deposits and accumulate savings. Customers never lose their principal, but instead of being offered $4 for the year, they have a chance to actually win some serious dough.

That’s exciting to people! Just look at the fact that about half of Americans play the lottery every year even when their odds are as low as 1 in 176 million. With PLSAs, people get that same feeling of “What if I win?” but never see an actual downside. And the more you save, the better your chances.

PLSAs have been around for decades in more than 20 countries like Ireland, the United Kingdom, and South Africa. Thanks to Congress passing the American Savings and Promotion Act in 2014, federally chartered banks can now offer PLSAs, and more and more states and companies are experimenting with these products to get people to save.

Layup is the first company to apply the PLSA concept to sports. Fans are passionate about their teams, and Layup gives them an opportunity to get a stake in the game while saving for their future.

It's time for sports to put money back into fans' pockets.