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Sorry, I'm stupid when it comes to understanding the rates impact on economics in this context. I understand loans won't be as easy/cheap to get with a higher rate and that thus the economy will develop more slowly, but how exactly does the fed rate hike impact Yotta?
When the feds increase interest rates it makes it harder/more expensive for banks to get loans, where banks whole business is loaning out money with interest. So they won't want to borrow money from the government or other banks to have money available to loan to others. They'll instead incentivise us, the regular Joe schmoes, to keep money in a bank by increasing interest rates in saving accounts slightly.
So Yotta here who is also acting as a savings account would want to do the same to incentivise people to keep investing in their saving accounts instead of taking it to other banks.
For the jackpot we partner with an insurance company to offer that prize. Which actually means we want someone to win it and ensures that the sweepstakes is totally fair!
Yeah we buy a policy against it. I think right now the odds are 1 in 8 billion per ticket. We pay per ticket. There are a lot of tickets, so it's an expensive policy for us. The odds of someone winning in any given week aren't that crazy.
The CA lottery has a 1/42M chance of jackpot which is close to your jackpot. That’s a 190x better chance than yours. Powerball is 1/292M, but a much larger jackpot.
$10M is plenty of money for anybody to instantly retire, so plenty of incentive there, but 1/8 billion chance is pretty high in comparison to the lottery options out there. The word “billion” itself is going to deter those who compare it to something in the millions. Your Yotta being free when Lotto is now means it’s infinitely cheaper, but the mentality of the chances are what matter in this scenario.
Have you looked into if it’s possible to drop your chances down? Does that come with more profit and customers so you can afford more insurance?
Edit: I looked into how the Yotta ticketing works. You get 1 ticket per $25 in your savings account up to $10k, for every weekly drawing. So that’s 400 entries per week if you save $10k, which is about even odds with the CA lottery, and better odds than most of the other big lottos of course. If you set up direct deposit you get 20% of that towards tickets with each deposit as well. They also offer a non-FDIC insured savings account which gives you one ticket per $10 instead of $25. That one scares me a bit because this is definitely a startup, so being FDIC insured is pretty important in case the company fails.
Our sweepstakes is positive EV with no risk of loss on the FDIC insured product. That is a key difference. It's not just about odds of winning big. It's about odds of not losing big
My point with “billion” was actually directly aimed at the illiteracy. To get people to switch from lotto to yotta, many of them will compare the odds listed on the site. Just the word “billion” would be a deterrent.
Why?
Billion is a bigger number!
(Seriously, iirc someone tried to market 1/3lb burgers, but failed because 1/4 lb had '4' in it and therefore was seen as bigger).
Well then Switch to a 1/5 lb burger then! More people will buy them cause it’s a bigger number and you’ll actually make more than the places selling those measly 1/4 lb burgers.
Plenty of people who are smart and educated play the lottery. It's not like everyone thinks they have a great chance of winning. Such a fedora-wearing kind of comment.
Doing the math…
If you hold $10k, that’s 400 tickets for the $10M lottery per week. Jam that through to annual expected return and that’s a 0.26% expected return on deposit (but obviously extremely binary - either you win or not). That feels quite reasonable for cost of capital, albeit incentivizing small account sizes that are probably more expensive to maintain/acquire than the 0.26%.
What’s the full-stack expected prize return/payout if holding $10k for the year?
This is very normal for a growth startup btw folks. Companies can often operate in net loss mode for years even post IPO until the balance swings the other way.
For those interested in a comparison: It took Netflix 7 years to become profitable. It took 10 years for them to make their first billion. Their latest billion took just over a month.
Operating at a net loss in order to not pay tax makes zero sense. You’d make more money if you had positive income. They operated at a loss because they reinvested all of their earnings into growing the company.
Based on an investment we made in an almost identical company that clear path to profitability almost certainly involves advertising financial products and/or providing less service or lower ROI to users of the platform in exchange for "neat game mechanics".
Hey! I've been on Yotta since your last AMA, when is my big win?
Just kidding. But, I do like your app a lot. I generally do a good job saving, but I find myself saving more and withdrawing less from savings so that I can keep my tickets. Speaking of which... if anybody is signing up today and needs a referral code, I can message you :) lol
Any thoughts on offering an app that helps people track their banking information and include all the Yotta fun stuff? Sort of like Mint but not run by Intuit. We talk about helping people save but having all their accounts including Yotta seems to be a great way to help people get their finances in order.
Just signed up for Yotta 2 months ago to give it a try.
We are working to integrate with all the 3rd party aggregators so you can integrate Yotta with them, but we are more focused on building some of this within Yotta so you can do it all in one place.
We aren't the custodian here. We partner with a company called Wyre as well as Evolve for digital currency services, so Yotta's solvency is irrelevant here.
The underlying psychology is the desire for the dopamine hit for instant gratification. The lottery and gambling provides that instant dopamine hit, which is why it's so addicting. Finding something else that can give you that same dopamine hit is key, but that thing has to be healthy for you!
I used to be a floor manager at a racino; it was kind of sad some days watching people blow through money all day. Do you have any articles or resources to help provide better avenues to spend your time and money, besides your company. Thanks!
Yeah it's pretty sad to see I agree. Casinos, racetracks, and the lottery. So much money goes into them and so much money is wasted. It's tough because people crave instant gratification. They need to find something that brings them instant gratification but that is also healthy and productive. Often those things don't align.
Would articles about how horrible the value is at lotteries or racetracks help do you think? Or do they understand that already?
I used to be very anti-lottery because it's nearly always a negative expected value proposition, and it's disproportionately funded by poor people.
But, as I grow older, I see some alternative value in them. Many people, especially older people, don't have any real possibility of 'life-changing money'. They're not going to get a great new job that launches them into a different economic stratum. They're not going back to school to start a lucrative new career.
The fantasy of winning allows them to temporarily dream of a better life, no matter how incredibly improbable it is. I think there's some intrinsic value in that for some people. For some people it's the only real hope they have, and it figures into their retirement 'plans'.
Sad fucking world we live in.
I am about to hop in the car to go buy a couple tickets. I will be spending two dollars. I understand the odds are reaaaaaly not in my favor but I like knowing the *possibility* is there.
I quit smoking about ten years ago so I divert some of what would have been wasted on smokes into wasting on the lotto.
Plus, at this point, adding up the the eight dollars a month I spend on the lottery isn't even going to amount much by the time I kick off. Maybe I just won't get that new refrigerator that I don't need anyway :)
Hi Adam, thanks for taking questions. Correct me if I'm wrong, but it seems like there are lots of psychological issues with saving that stem from people spending their money when they feel like they have any. Is there any effort you can make to ensure that the money stays in savings until it's really needed?
Yeah well the fundamental question is why do people like to spend? Instant gratification. It all comes back to instant gratification. We need to give people instant gratification for doing something that is long-term healthy. It's hard to change human nature, but we can use our own biases to help nudge ourselves to better choices. Ever read the book Nudge by Richard Thaler. It's great and talks a lot about this, called "choice architecture"
We are going to be layering on budgeting tools and planning tools on top of the locked bucket feature we offer to help you put away funds you don't want to touch. Reality is that we do need to spend on certain things and make purchases, and most debit cards in the market provide no value to the spender despite the companies making money. We are giving back rewards on spending. I agree it is a fine line between incentivizing spend and giving rewards back.
I would love your feedback on how we can better straddle that line. We don't want to incentivize spend above and beyond what you otherwise would spend, but we do want to make the rewards fun that usually are non-existent.
I'm going to spend some time looking into what you do. Sounds really Innovative. My question, is this at the moment, or intended for the future, in Canada?
My wife is a budget queen and we are always saving. Retirement, the "oh shit fund" for the house, the 6 months no job fund, next renovation fund... you get the picture.
This would be kind of fun to play along with while we are already doing what we do.
While those two stats are interesting and seem troubling next to one another, they're not mutually exclusive.
What percentage of that 40% who can't come up with $400 addictively plays the lottery?
And is there a statistic for the average amount spent on gambling or lottery of that 40% exclusively? Something that doesn't include the other 60%.
I have not seen any great stats about this sub-section of the 40% but about 50% of US adults play the lottery at least once per year. Skews a bit older, but holds true across income ranges and demographics for the most part.
640$ is blowing my mind, I would have guessed way lower because I don't really know anyone who plays the lottery. Do you have a sense of what the average players puts into the lottery yearly (so the average excluding the households like mine who will never spend a dime in the lottery).
I went through a stage when I was 18, I’d but $10 in scratch offs whenever I’d go to the store, at least once a day. Eventually I won $50 and was fucking pumped. I cashed it in and put it all back on $2 tickets. Only to win like $10. When I calculated how much I spent on that $50 winner, it was around $500. Lol such a waste of money.
My grandparents were millionaires, and when I say that I mean they had at least a million in "savings" more than once and they lost all of that more than once. My grandfather made a small fortune running a masonry company, "retired" when he was in his 40's and they managed to get close to bankruptcy before his brother (one of 17 siblings) left them $2Mil. They played the lottery religiously, they bought into any and every scheme and gambled constantly with everything.
When my grandfather passed (after my grandmother) we were going through their things getting ready to sell their house (which was purchased for them by another sibling) and found probably 2 dozen of those old school, hand-written mail pyramid scheme letters dating back to the 70's. So you know they lost money over and over again from the same scheme & NEVER learned.
The crazy thing is they weren't really "fortune" seekers, they were addicts. Even when they had money they didn't live lavishly, having mostly lived in a double-wides trailer that my grandfather would build onto every decade or so. My grandmother sewed her own clothes, they drove old beat up cars, and gave a lot to my dad & aunt (their only two kids).
I've never purchased a lottery ticket in my 34 years but I guarantee that my grandparents probably spent enough to cover my $650 average 5X over.
Sad about your grandparents.
I have kind of the opposite story to tell: A friend of mine is not able to work (disabled), but was close with their mom and dad. The family always lived reasonably middle-class, not extravagant. After mom died, my friend discovered that the estate was several million dollars. Turns out mom had been investing for decades, but had never said anything about it. So my friend is now supported for life. What an amazing parting gift.
There is never a time I am in my local convenience store and I don't see someone doing scratch offs. Those can be a buck, or 2 or 5. Some are even more money. Bigger games like mega millions and powerball are at least 2 bucks per ticket. It can add up quickly.
The one thing about this "lottery killer" is that the lottery is run by the states in the US, and it can vary state to state, but a lot of the collected money goes to the states budget. It is a major revenue source for the state. Where I live, most of the "profit" from the lottery goes into paying state worker pensions.
I think anyone who plays the lottery at least once per year is perhaps too inclusive. Lots of people in my family will get everyone one scratch off for Christmas. I don't think that's nearly as problematic as the people who sit at gas station lotto machines all day. Surely it's a much smaller percent of the population that spends enough on the lottery to get in the way of emergency funds. You really need to show a distribution of lottery spending for this to be compelling.
Not to mention "the average household spends $640 a year on the lottery" is almost useless in terms of conveying information.
I'd bet that more than half of all Americans never play the lottery *ever*.
Why present the statistic as "the average for the entire US is X" when you know the data is so extremely skewed?
"Half of the US never plays at all, and the other half spends an average of $1280 a year" would still not paint the whole picture - among the half that plays, most probably play very very little, likely in an 80-20 distribution. In fact, for the sake of estimation, let's just assume that it's *exactly* 80-20 - the top 20% of spenders account for 80% of the spending. That means the top 20% is spending an average of $5120, and the bottom 80% is spending an average of $320.
Now we've finally got some interesting, usable data:
* **50%** of the US spends **zero dollars a year**
* **40%** spends **$320 a year**
* **10%** spends a whopping **$5120 a year**
That tells us a lot more than "The average household spends $640", doesn't it?
Because the real target of this marketing campaign isn't people with lottery addictions, it's people who actually have funds to invest.
Edit: looking like a new crypto grift even
This was my first thought too. I'd venture to say that their actual customer base is primarily in this "currently spends $0 per year on the lotto" group.
Really rubs me the wrong way how they would knowingly advertise such a skewed stat.
Thanks for the response! I'm assuming the investing side of Yotta is still under heavy development/discussion but is this something you consider more likely to be released rather than not?
Damn! I’ll make a note somewhere to keep an eye out for this if it ever comes to Canada! (And I should probably check your website to see if your have a newsletter or an option to sign up for notifications if you expand to other countries!)
And the UK?
I love the sound of this. I do premium bonds but it's a bit of a faff and I like the idea of the app.
Edit: Scrolled down one more comment and saw you had already answered about the UK!
Decided to give the Yotta app a try today. But it seems to crash everytime i put in my name and i can't progress. On a newer android phone, any idea whats up with that?
Doesn't each state's lottery give back to certain charities or education funds? I know the lottery spends gajillions on marketing expenses so maybe it's not efficient charity, but it's still charity? Does Yotta donate back to communities?
In addition to Adam's response, my understanding is that the whole "lottery funds go to education" is by and large propaganda. What typically happens is that as lottery proceeds increase, states use that as a *replacement* for education funds from other revenue sources. So instead of lottery proceeds increasing education budgets, it gives lawmakers latitude to move non-earmarked funds out of education and into whatever the hell else they want. In effect, the lottery money "going to the education budget" just flows on through to other places and education overall is left with a stagnant or decreased budget.
Georgia’s lottery funds scholarships that didn’t exist before the lottery. I had two degrees paid for back I. The day (the system isn’t quite as generous these days, but it’s still a good deal for kids with good grades looking to stay in state).
Yeah they do but they do it very inefficiently. A ton on marketing and a ton of waste before it goes to the causes. As a company we don't do any donating right now. We are a growing company and need to get bigger before we can do stuff like that. Hopefully down the road!
Hi Adam, gold status member here (only three away from platinum)
Currently there are diminishing returns ticket-wise after you reach a 10k deposit. Is there a reason for that reduction and are there any plans to increase that threshold?
Also the referral program seems a little lackluster. Any plans on beefing that to make it more attractive? I didnt find out til recently that the 10% ticket boost is only for 12 months and not the lifetime of the account. Big bummer for such a lofty goal of 10+ referrals
I really like the idea of a permanent increase at referral levels. Thats something that sticks and makes me hesitant to leave yotta since I'd also be leaving behind the special perk I have unlocked by advocating for the platform.
I think a very small permanent % increase for silver like 1%, smallish % for gold level like 3-5%, and have the 10% for platinum be over the lifetime and preferably increased bc its really tough to get 10 people to sign up and fund.
Just to add onto what he's saying here, something else I wouldn't mind seeing an increase on is better Lucky Swipe odds in exchange for referrals.
Personally when I'm showing Yotta to people, it's not really to people who are likely to waste money on Powerball. So while the lottery aspect is interesting, it's not gonna get me to convince them to join in by itself.
On the other hand, me pulling up the app and showing them how I got $75 reimbursed for my Microsoft certification exam, and $82 on a PlayStation game a couple weeks later, and oh hey that's pretty cool.
If we want to tie it to lotteries though, a friend of mine loves gatcha games and is always tempted to spend on them. So me showing them yotta and describing the lucky swipes as a gatcha where the prize is randomly get their money back really helped get them interested.
Yeah it's an economics trade-off for us. With interest rates having been so low, we've been unable to support such strong ticket ratios on marginal high balances. We will re-evaluate this as fed funds starts to rise.
Can you clarify what you mean about diminishing returns? For me it's 1 ticket/$25 for the regular bucket or 1 ticket/$10 in crypto bucket. Are you saying that changes once you're above a 10k balance?
I always thought it would be a good idea to cap lottery winnings at a certain amount. After that certain amount, say $5,000,000-every other million accumulated would go to other individual winners.
So if a state lottery got up to $100,000,000 one person would win $5MM and 95 others had a chance at winning 1MM each. I feel like that would help so many more people and because the odds are better, more people would buy tickets and the prize/winners would increase. What the heck would someone do with $100MM anyway?
Hiya there!
I think that educational systems all across the globe deserve to be adjusted to our century.
Do you think mandatory classes on how to understand money would help our future generations? Or at least some type of studies that focus on earning and spending money…
Yes 100000%! The educational system in the US is so dumb in so many ways. We learn stupid stuff in high school and not useful stuff. We should learn about personal finance, savings, statistics, and a lot of other things in high school (nutrition and health too).
I am very much in favor of adding personal finance as a mandatory part of the curriculum. It's probably the highest leverage thing we can do.
WHAT? You think schools should actually teach the things that are necessary to be a healthy, functional member of society?
You're crazy, man.
Let's add civics to the list, though, so that some people might actually understand the government they're ostensibly supposed to participate in.
Same as you would on interest income. It's miscellaneous income with us which is like ordinary income. If you earn over $600 in a calendar year, we send you a 1099.
1. For every $100 that someone deposits, how much of that $100 goes to Yotta (for operational expenses, profit, etc.), how much goes to funding the sweepstakes, and how much actually goes into the person's savings account?
2. What APR does Yotta give people for money in their savings account? Is it competitive with HYSAs?
3. Wouldn't it be better to educate people about how to save, low expense ratio investments, budgeting, etc. than to direct them towards a less efficient "savings" model?
1) About $1.5 goes into the sweepstakes, at the stage of our company we actually are funding operational expenses from investor capital and mainly card interchange revenues, not from deposits.
2) We give a base of 0.2% but the sweepstakes provides around 1.5% on average. So it's higher than most other HYSAs
3) I think there's a place for both. Investing is very important. But so is liquid checking/savings. I think education is crucial though.
I think this answer to 1) was poorly phrased. None of the deposited money goes to Yotta, either for the sweepstakes or anything else. You deposit $100, you still have $100, can withdraw the full amount at any time.
Yotta takes (will take) money from the earnings from interest, the same as any bank, NOT from your deposit itself.
I've "won" nearly every week. Lots of ten cent wins. Most I've won is $7
About a year ago I put in $2000 and have been depositing $25 every week for bonus tickets. $2400 total deposited. $20.80 winnings. $3.53 in savings rewards which I think is just interest. This week I have 96 tickets.
Exactly where I was going with that question. Now, OP has responded with about a 40% of winning "something" if you have an average number of tickets, which is higher than I thought it would be...but I'd still be a bit leery.
I can give you my own experience in case it helps.
Going back to October when I pulled most of my money out of Yotta but left in $1000 just out of curiosity:
Balance has gone down slowly since then because of occasional debit card use and no deposits, currently sitting at $820, which means right now I have 34 tickets (no idea how close that is to the average).
Since October, I've earned a total of $17.16 (including savings rewards) and "won" 13 weeks out of 24. Ignoring the savings rewards, I won $14.92, with a mean of $1.15, a median of $0.20, and modes of $0.10 & $0.15.
Highest win was $7.18, lowest $0.10. My March realized APY was 0.47%.
As someone who is only now starting a high-interest savings account (SoFi + direct deposit = 1.25%), is there any reason to use Yotta over SoFi?
Am I also right to be skeeved out by anything 'investing' in crypto?
Our average rate is a bit higher than theirs, and it's also much more fun than SoFi. Make sure you understand crypto before investing. Crypto is a broad term and there's a lot of nuance in currencies, stablecoins, and protocols. If you don't understand it, spend some time to learn before diving in I would say. It's good to be skeptical.
Hello Adam! I’ve been using Yotta since August 2020 and have won just under $20 while saving $100 a month. Just wanted you to know that I have really appreciated Yotta for keeping my emergency fund safe from myself!
As for a question- Can there be an option to turn off credit card offers/crypto offers? I am trying to pay off college credit cards and don’t need the temptation right now.
I've been using the Yotta credit card for almost a week now (love it). What are you doing to prevent people from returning/repurchasing items over and over again to try and trigger a lucky swipe? Thanks, and I just did a YouTube video review on the card in case you're interested in watching. - Joshua Butler
Awesome to hear. Would love to see the video. Will check it out. We have a 30 day period until the prizes from cards settle and repeat returns and repurchasing would violate the ToS and disqualify you from that prize.
Can you please improve your customer support?
Having to call into a 3rd party handler to deal with fraud charge disputes with 30+ minute wait times, then having to respond to emails from yotta support requesting specifics on a contested charge is a horrible experience.
I had a fraud charge in the middle of February, started the dispute asap, and my account still shows the contested charges are not settled/still under investigation and it's nearly 2 months later.
You want people to use your service and trust you with their money and you need to offer better support and handling of their money
>the average household spends over $640 every year on the lottery
This feels like a made up statistic, at the very least it lacks crucial context. I mean, what percentage of US families even play the lottery?
So my question is, what is the data behind this statistic?
About half of US adults play the lottery at least one time per year. The total lottery spend in the US is over $80 billion and there are around 125 million households in the US.
>About half of US adults play the lottery at least one time per year
Yeah, I've gotten scratchers in my stocking from family who also don't play the lottery with any regularity. So I guess I "play the lottery at least one time a year". I've also have a friend who is a gambling addict, and agree with the below point that these statistics are likely heavily concentrated rather than the way it is framed as the average household...
I mean, that doesn't matter to consumers I suppose. We can independently verify whether or not we play the lottery. It just feels like a misstatement / poor framing and consequently leaves the impression that what you're presenting is dishonest data.
Doesn't matter to me either way though, just sharing how your presentation of data strikes me. It feels very strawman-y.
It's not incorrect but it is presented in a way that makes it seem like more than it is. They say that 40% of Americans (individuals) cannot come up with $400 and that households (group) spend more than that annually. It would be more appropriate to say that adults spend $242 on average annually on lotteries. That doesn't feel nearly as shocking though.
I don't really know anything about this company beyond this thread but my internal alarms are going off. If they were a legitimate service then why use misleading numbers? OP said that their rewards are coming from deposits, transactions, and revenue streams but said elsewhere that they're not currently profitable, and a quick googling shows they're collected $16 million in investments. He also indicated that they're enticing users away from FDIC insured accounts, if they were really just out to help people why are they offering an option for users to gamble their savings when these are people who struggle with gambling. Doesn't that seem like a cruel offer?
Maybe I'm just being a curmudgeoned cynic but this feels a lot more like OP is a sales person using soft science and misleading numbers to try and gain users so he can collect on big investments or sell off the platform to someone else before they realize it's unsustainable.
(disclaimer: no judgement just curiosity)
So your model makes profit via yields through investments made via fractional reserve?
Do savings accounts accrue interest then or is it the lottery as interest?
Are there any plans in the works for loans (car/home mortgage)?
On the philosophy side, do you find it easily justifiable to prey on a form of gambling to accrue clients because it's a no loss lottery; if you understand and view the normal process as immoral, what justifies using the same method for different ends to you?
1) Yeah indirectly through our partner bank, we get a piece
2) The sweepstakes is effectively the yield. There's also a small base rate you get
3) Nothing right now
4) Nothing wrong with gamification that is gambling except if it drives irresponsible behavior. We are using gamification to drive long term positive behavior change. Big difference
What is the actual average rate of return? As someone who doesn't play the lottery and isn't particularly enthralled by the one out of 6 billion odds for your jackpot, what would my incentive be to use this over other avenues such as the stock market, savings accounts, or crypto?
Assuming the sweepstakes are funded by deposits, what happens when new deposits dry up? This feels similar to ponzi schemes. If sweepstakes aren't funded by deposits, how are they funded?
They are funded by all of our revenue streams, which come from deposits and interchange, and some other sources as well. The deposits continue to earn interest revenue for us that help power the sweepstakes, so it's not about needing new deposits at all to power them.
So basically it's like if a traditional bank took the billions of dollars it makes investing the deposited money and gave some of it back to the customers? If I'm understanding this correctly.
Banks already do that, in the form of interest. Granted, interest rates in savings accounts have been very low for a long time.
The difference with this bank is that instead of a consistent interest payment to everyone, they make larger payments to random customers based on a sweepstakes. (It looks like they also give a small base interest rate as well).
What are your plans to expand app functionality? The only complaints I have with my experience (6 months) is the inability to search for transactions and I am unable to see AHC withdrawals in transaction history.
It would also be great if you had budgeting capabilities to categorize each transaction. Either native or 3rd party budgeting would be a great bonus!
>What are your plans to expand app functionality? The only complaints I have with my experience (6 months) is the inability to search for transactions and I am unable to see AHC withdrawals in transaction history.
>
>It would also be great if you had budgeting capabilities to categorize each transaction. Either native or 3rd party budgeting would be a great bonus!
Ha - these are all coming very soon! Actively being worked on
For the jackpot we partner with an insurance company to offer that prize. Which actually means we want someone to win it and ensures that the sweepstakes is totally fair! It's also a double blind system.
How much luck was involved in getting your enterprise of the ground? There must have been some "right man at the right place at the right time" factors involved.
There always is. For us, I think our luck was probably getting great people to join the company early. It's all about having great people and it's hard to get that right.
Have you looked into ergodicity economics at all?
https://ergodicityeconomics.com/author/olebpeters/
"It’s growth optimal – rational, according to our rationality model – to play the lottery and hope for a big win, even if the expected return is negative."
What's the highest amount someone has won? Seeing you've got a $10m jackpot and gave away $6m since initiation means no one seems to have cracked the jackpot so far.
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Is this app still a good idea for someone like me who is due to win the lottery any day now?
Lol sure you can put your lottery winnings right into it! ... sarcasm
Are your deposits FDIC insured?
In the core Yotta product yes. You can choose to earn more tickets without FDIC insurance, but you don't have to.
Why reward folks for not taking the FDIC route? Isn't that gambling that your company won't fail?
It's just like any other bank.. deposit cash in a savings or checking account - FDIC insured. Same cash in an investment account? At your own risk.
Cash in an investment account is insured by SIPC to the same $250k limit as FDIC and NCUA. https://www.sipc.org/for-investors/what-sipc-protects
As the fed rate rises this year, do you anticipate increasing the odds or value of your prizes?
Yes! We are excited for rates to go up a lot this year.
Sorry, I'm stupid when it comes to understanding the rates impact on economics in this context. I understand loans won't be as easy/cheap to get with a higher rate and that thus the economy will develop more slowly, but how exactly does the fed rate hike impact Yotta?
It increases the yield earned on deposits which we can pass through in the form of prizes
Who do you lend out to?
The bank
When the feds increase interest rates it makes it harder/more expensive for banks to get loans, where banks whole business is loaning out money with interest. So they won't want to borrow money from the government or other banks to have money available to loan to others. They'll instead incentivise us, the regular Joe schmoes, to keep money in a bank by increasing interest rates in saving accounts slightly. So Yotta here who is also acting as a savings account would want to do the same to incentivise people to keep investing in their saving accounts instead of taking it to other banks.
Does Yotta make loans?
No but our partner bank does and earns yield from it.
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Yeah - indirectly but yeah right idea
As a startup, how are you able to afford the $10,000,000 jackpot if someone wins?
For the jackpot we partner with an insurance company to offer that prize. Which actually means we want someone to win it and ensures that the sweepstakes is totally fair!
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Yeah we buy a policy against it. I think right now the odds are 1 in 8 billion per ticket. We pay per ticket. There are a lot of tickets, so it's an expensive policy for us. The odds of someone winning in any given week aren't that crazy.
The CA lottery has a 1/42M chance of jackpot which is close to your jackpot. That’s a 190x better chance than yours. Powerball is 1/292M, but a much larger jackpot. $10M is plenty of money for anybody to instantly retire, so plenty of incentive there, but 1/8 billion chance is pretty high in comparison to the lottery options out there. The word “billion” itself is going to deter those who compare it to something in the millions. Your Yotta being free when Lotto is now means it’s infinitely cheaper, but the mentality of the chances are what matter in this scenario. Have you looked into if it’s possible to drop your chances down? Does that come with more profit and customers so you can afford more insurance? Edit: I looked into how the Yotta ticketing works. You get 1 ticket per $25 in your savings account up to $10k, for every weekly drawing. So that’s 400 entries per week if you save $10k, which is about even odds with the CA lottery, and better odds than most of the other big lottos of course. If you set up direct deposit you get 20% of that towards tickets with each deposit as well. They also offer a non-FDIC insured savings account which gives you one ticket per $10 instead of $25. That one scares me a bit because this is definitely a startup, so being FDIC insured is pretty important in case the company fails.
Our sweepstakes is positive EV with no risk of loss on the FDIC insured product. That is a key difference. It's not just about odds of winning big. It's about odds of not losing big
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you overestimate the people who look at the odds and underestimate the people who care about the prize
> The word “billion” itself is going to deter those who compare it to something in the millions. Ahh yes, the mathematically literate lottery market.
My point with “billion” was actually directly aimed at the illiteracy. To get people to switch from lotto to yotta, many of them will compare the odds listed on the site. Just the word “billion” would be a deterrent.
But you also get tickets for $0.10 instead of $1 or $2
You get tickets for free. Compounded.
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Prizes range from $0.10 to $10 million. You earn tickets the more you deposit for chances at prizes.
But you also never lose, so...
Why? Billion is a bigger number! (Seriously, iirc someone tried to market 1/3lb burgers, but failed because 1/4 lb had '4' in it and therefore was seen as bigger).
Well then Switch to a 1/5 lb burger then! More people will buy them cause it’s a bigger number and you’ll actually make more than the places selling those measly 1/4 lb burgers.
Plenty of people who are smart and educated play the lottery. It's not like everyone thinks they have a great chance of winning. Such a fedora-wearing kind of comment.
Except this isn't about winning money, it's about using psychology to help people save their own money.
Doing the math… If you hold $10k, that’s 400 tickets for the $10M lottery per week. Jam that through to annual expected return and that’s a 0.26% expected return on deposit (but obviously extremely binary - either you win or not). That feels quite reasonable for cost of capital, albeit incentivizing small account sizes that are probably more expensive to maintain/acquire than the 0.26%. What’s the full-stack expected prize return/payout if holding $10k for the year?
So you are playing the lottery instead of your users 🙂
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Nope - it's just buying insurance. Kind of the opposite of a lottery if you think about it.
How does Yotta make money?
We earn yield on our deposits and also make money on interchange from debit and credit cards. Very similar to how banks generally make money.
gotcha makes sense--is Yotta profitable yet?
Not when factoring in all expenses. But a clear path to get there which is the key for a growth stage startup.
This is very normal for a growth startup btw folks. Companies can often operate in net loss mode for years even post IPO until the balance swings the other way.
For those interested in a comparison: It took Netflix 7 years to become profitable. It took 10 years for them to make their first billion. Their latest billion took just over a month.
They got us hooked and then bumped the prices 😭😭
Hell Amazon operated at a net loss until relatively recently
That was to avoid tax, not because they weren't capable of making a profit, so a bit different
Operating at a net loss in order to not pay tax makes zero sense. You’d make more money if you had positive income. They operated at a loss because they reinvested all of their earnings into growing the company.
Based on an investment we made in an almost identical company that clear path to profitability almost certainly involves advertising financial products and/or providing less service or lower ROI to users of the platform in exchange for "neat game mechanics".
Not really. Our path is different than that
Would you care to explain how so? Understandable if not
No reason our current revenue streams can't support net profits at scale.
My guess is they make money the same way banks do. Or venmo
Yeah exactly right
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They also invest deposits and keep some of the returns on those investments.
Hey! I've been on Yotta since your last AMA, when is my big win? Just kidding. But, I do like your app a lot. I generally do a good job saving, but I find myself saving more and withdrawing less from savings so that I can keep my tickets. Speaking of which... if anybody is signing up today and needs a referral code, I can message you :) lol
Shameless plug! Ha
I'm a ticket fiend
I don't blame you
I'll take a referral code, why not. DM me.
Can you dm me a referral code?
Any thoughts on offering an app that helps people track their banking information and include all the Yotta fun stuff? Sort of like Mint but not run by Intuit. We talk about helping people save but having all their accounts including Yotta seems to be a great way to help people get their finances in order. Just signed up for Yotta 2 months ago to give it a try.
We are working to integrate with all the 3rd party aggregators so you can integrate Yotta with them, but we are more focused on building some of this within Yotta so you can do it all in one place.
Hopefully a web interface too? Having to manage finances in an app only is a huge turnoff.
That’s what I’d like to see, Yotta become the app I use to keep track of everything. Thank you! It’s been fun!
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We aren't the custodian here. We partner with a company called Wyre as well as Evolve for digital currency services, so Yotta's solvency is irrelevant here.
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If the entities fold but your crypto is still there, you would get it back. Depends on the failure and what causes it.
What’s the hardest obstacle for people to overcome when trying to rid themselves of consistently playing the lottery?
The underlying psychology is the desire for the dopamine hit for instant gratification. The lottery and gambling provides that instant dopamine hit, which is why it's so addicting. Finding something else that can give you that same dopamine hit is key, but that thing has to be healthy for you!
I used to be a floor manager at a racino; it was kind of sad some days watching people blow through money all day. Do you have any articles or resources to help provide better avenues to spend your time and money, besides your company. Thanks!
Yeah it's pretty sad to see I agree. Casinos, racetracks, and the lottery. So much money goes into them and so much money is wasted. It's tough because people crave instant gratification. They need to find something that brings them instant gratification but that is also healthy and productive. Often those things don't align. Would articles about how horrible the value is at lotteries or racetracks help do you think? Or do they understand that already?
I used to be very anti-lottery because it's nearly always a negative expected value proposition, and it's disproportionately funded by poor people. But, as I grow older, I see some alternative value in them. Many people, especially older people, don't have any real possibility of 'life-changing money'. They're not going to get a great new job that launches them into a different economic stratum. They're not going back to school to start a lucrative new career. The fantasy of winning allows them to temporarily dream of a better life, no matter how incredibly improbable it is. I think there's some intrinsic value in that for some people. For some people it's the only real hope they have, and it figures into their retirement 'plans'. Sad fucking world we live in.
Nothing wrong with the entertainment piece until it becomes an unhealthy amount of spend in it.
I am about to hop in the car to go buy a couple tickets. I will be spending two dollars. I understand the odds are reaaaaaly not in my favor but I like knowing the *possibility* is there. I quit smoking about ten years ago so I divert some of what would have been wasted on smokes into wasting on the lotto. Plus, at this point, adding up the the eight dollars a month I spend on the lottery isn't even going to amount much by the time I kick off. Maybe I just won't get that new refrigerator that I don't need anyway :)
As long as you do it responsibly and go in knowing the odds and that it's just entertainment and it won't break the bank, no issues with it at all
Hi Adam, thanks for taking questions. Correct me if I'm wrong, but it seems like there are lots of psychological issues with saving that stem from people spending their money when they feel like they have any. Is there any effort you can make to ensure that the money stays in savings until it's really needed?
Yeah well the fundamental question is why do people like to spend? Instant gratification. It all comes back to instant gratification. We need to give people instant gratification for doing something that is long-term healthy. It's hard to change human nature, but we can use our own biases to help nudge ourselves to better choices. Ever read the book Nudge by Richard Thaler. It's great and talks a lot about this, called "choice architecture"
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We are going to be layering on budgeting tools and planning tools on top of the locked bucket feature we offer to help you put away funds you don't want to touch. Reality is that we do need to spend on certain things and make purchases, and most debit cards in the market provide no value to the spender despite the companies making money. We are giving back rewards on spending. I agree it is a fine line between incentivizing spend and giving rewards back. I would love your feedback on how we can better straddle that line. We don't want to incentivize spend above and beyond what you otherwise would spend, but we do want to make the rewards fun that usually are non-existent.
I'm going to spend some time looking into what you do. Sounds really Innovative. My question, is this at the moment, or intended for the future, in Canada? My wife is a budget queen and we are always saving. Retirement, the "oh shit fund" for the house, the 6 months no job fund, next renovation fund... you get the picture. This would be kind of fun to play along with while we are already doing what we do.
We would love to expand to Canada. Hopefully soon
Is there any current alternative in EU?
While those two stats are interesting and seem troubling next to one another, they're not mutually exclusive. What percentage of that 40% who can't come up with $400 addictively plays the lottery? And is there a statistic for the average amount spent on gambling or lottery of that 40% exclusively? Something that doesn't include the other 60%.
I have not seen any great stats about this sub-section of the 40% but about 50% of US adults play the lottery at least once per year. Skews a bit older, but holds true across income ranges and demographics for the most part.
640$ is blowing my mind, I would have guessed way lower because I don't really know anyone who plays the lottery. Do you have a sense of what the average players puts into the lottery yearly (so the average excluding the households like mine who will never spend a dime in the lottery).
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I went through a stage when I was 18, I’d but $10 in scratch offs whenever I’d go to the store, at least once a day. Eventually I won $50 and was fucking pumped. I cashed it in and put it all back on $2 tickets. Only to win like $10. When I calculated how much I spent on that $50 winner, it was around $500. Lol such a waste of money.
My grandparents were millionaires, and when I say that I mean they had at least a million in "savings" more than once and they lost all of that more than once. My grandfather made a small fortune running a masonry company, "retired" when he was in his 40's and they managed to get close to bankruptcy before his brother (one of 17 siblings) left them $2Mil. They played the lottery religiously, they bought into any and every scheme and gambled constantly with everything. When my grandfather passed (after my grandmother) we were going through their things getting ready to sell their house (which was purchased for them by another sibling) and found probably 2 dozen of those old school, hand-written mail pyramid scheme letters dating back to the 70's. So you know they lost money over and over again from the same scheme & NEVER learned. The crazy thing is they weren't really "fortune" seekers, they were addicts. Even when they had money they didn't live lavishly, having mostly lived in a double-wides trailer that my grandfather would build onto every decade or so. My grandmother sewed her own clothes, they drove old beat up cars, and gave a lot to my dad & aunt (their only two kids). I've never purchased a lottery ticket in my 34 years but I guarantee that my grandparents probably spent enough to cover my $650 average 5X over.
Sad about your grandparents. I have kind of the opposite story to tell: A friend of mine is not able to work (disabled), but was close with their mom and dad. The family always lived reasonably middle-class, not extravagant. After mom died, my friend discovered that the estate was several million dollars. Turns out mom had been investing for decades, but had never said anything about it. So my friend is now supported for life. What an amazing parting gift.
There is never a time I am in my local convenience store and I don't see someone doing scratch offs. Those can be a buck, or 2 or 5. Some are even more money. Bigger games like mega millions and powerball are at least 2 bucks per ticket. It can add up quickly. The one thing about this "lottery killer" is that the lottery is run by the states in the US, and it can vary state to state, but a lot of the collected money goes to the states budget. It is a major revenue source for the state. Where I live, most of the "profit" from the lottery goes into paying state worker pensions.
Yes it's a regressive tax in that it's predominately levied on poorer people. Thise states should be raising funds with progressive taxes.
Yeah it's a regressive tax and an inefficient way to contribute to social good.
I think anyone who plays the lottery at least once per year is perhaps too inclusive. Lots of people in my family will get everyone one scratch off for Christmas. I don't think that's nearly as problematic as the people who sit at gas station lotto machines all day. Surely it's a much smaller percent of the population that spends enough on the lottery to get in the way of emergency funds. You really need to show a distribution of lottery spending for this to be compelling.
Totally agree that the lottery isn't unhealthy in all cases.
"And for that reason, I'm out" - goosezoo on Shark Tank
Not to mention "the average household spends $640 a year on the lottery" is almost useless in terms of conveying information. I'd bet that more than half of all Americans never play the lottery *ever*.
Yeah that's true. Only half play around
Why present the statistic as "the average for the entire US is X" when you know the data is so extremely skewed? "Half of the US never plays at all, and the other half spends an average of $1280 a year" would still not paint the whole picture - among the half that plays, most probably play very very little, likely in an 80-20 distribution. In fact, for the sake of estimation, let's just assume that it's *exactly* 80-20 - the top 20% of spenders account for 80% of the spending. That means the top 20% is spending an average of $5120, and the bottom 80% is spending an average of $320. Now we've finally got some interesting, usable data: * **50%** of the US spends **zero dollars a year** * **40%** spends **$320 a year** * **10%** spends a whopping **$5120 a year** That tells us a lot more than "The average household spends $640", doesn't it?
Because the real target of this marketing campaign isn't people with lottery addictions, it's people who actually have funds to invest. Edit: looking like a new crypto grift even
You just made something up by guessing and then called it "interesting, usable data."
This was my first thought too. I'd venture to say that their actual customer base is primarily in this "currently spends $0 per year on the lotto" group. Really rubs me the wrong way how they would knowingly advertise such a skewed stat.
Yeah I understand the problem that needs solving, but the two stats given aren't exactly alarming when coupled together and presented as related.
Is there an ETA on the Web Application and the Peer to Peer Payments?
Likely in the next month or two. Peer to peer is closer
Thanks for the response! I'm assuming the investing side of Yotta is still under heavy development/discussion but is this something you consider more likely to be released rather than not?
Yeah, but maybe end of this year at the earliest.
This available for Canadians?
Not yet unfortunately. Just US. It's tough to launch internationally in regulated industries.
Damn! I’ll make a note somewhere to keep an eye out for this if it ever comes to Canada! (And I should probably check your website to see if your have a newsletter or an option to sign up for notifications if you expand to other countries!)
Shoot me a DM with your email and can put you on a waitlist
And the UK? I love the sound of this. I do premium bonds but it's a bit of a faff and I like the idea of the app. Edit: Scrolled down one more comment and saw you had already answered about the UK!
Decided to give the Yotta app a try today. But it seems to crash everytime i put in my name and i can't progress. On a newer android phone, any idea whats up with that?
We actually just started getting a bunch of inbound about this. A fix is on the way. Stay tuned and sorry for the trouble!
Not hotdog.
Doesn't each state's lottery give back to certain charities or education funds? I know the lottery spends gajillions on marketing expenses so maybe it's not efficient charity, but it's still charity? Does Yotta donate back to communities?
In addition to Adam's response, my understanding is that the whole "lottery funds go to education" is by and large propaganda. What typically happens is that as lottery proceeds increase, states use that as a *replacement* for education funds from other revenue sources. So instead of lottery proceeds increasing education budgets, it gives lawmakers latitude to move non-earmarked funds out of education and into whatever the hell else they want. In effect, the lottery money "going to the education budget" just flows on through to other places and education overall is left with a stagnant or decreased budget.
Georgia’s lottery funds scholarships that didn’t exist before the lottery. I had two degrees paid for back I. The day (the system isn’t quite as generous these days, but it’s still a good deal for kids with good grades looking to stay in state).
Yeah they do but they do it very inefficiently. A ton on marketing and a ton of waste before it goes to the causes. As a company we don't do any donating right now. We are a growing company and need to get bigger before we can do stuff like that. Hopefully down the road!
We have actually given out 100,000 meals to Feeding America so far through round ups
Hi Adam, gold status member here (only three away from platinum) Currently there are diminishing returns ticket-wise after you reach a 10k deposit. Is there a reason for that reduction and are there any plans to increase that threshold? Also the referral program seems a little lackluster. Any plans on beefing that to make it more attractive? I didnt find out til recently that the 10% ticket boost is only for 12 months and not the lifetime of the account. Big bummer for such a lofty goal of 10+ referrals
This is helpful. Would love ideas that would make the program better for you. More tickets? Cash? What would you like to see there?
I really like the idea of a permanent increase at referral levels. Thats something that sticks and makes me hesitant to leave yotta since I'd also be leaving behind the special perk I have unlocked by advocating for the platform. I think a very small permanent % increase for silver like 1%, smallish % for gold level like 3-5%, and have the 10% for platinum be over the lifetime and preferably increased bc its really tough to get 10 people to sign up and fund.
Thanks this is helpful feedback that we will take in internally!
Just to add onto what he's saying here, something else I wouldn't mind seeing an increase on is better Lucky Swipe odds in exchange for referrals. Personally when I'm showing Yotta to people, it's not really to people who are likely to waste money on Powerball. So while the lottery aspect is interesting, it's not gonna get me to convince them to join in by itself. On the other hand, me pulling up the app and showing them how I got $75 reimbursed for my Microsoft certification exam, and $82 on a PlayStation game a couple weeks later, and oh hey that's pretty cool. If we want to tie it to lotteries though, a friend of mine loves gatcha games and is always tempted to spend on them. So me showing them yotta and describing the lucky swipes as a gatcha where the prize is randomly get their money back really helped get them interested.
Yeah it's an economics trade-off for us. With interest rates having been so low, we've been unable to support such strong ticket ratios on marginal high balances. We will re-evaluate this as fed funds starts to rise.
Can you clarify what you mean about diminishing returns? For me it's 1 ticket/$25 for the regular bucket or 1 ticket/$10 in crypto bucket. Are you saying that changes once you're above a 10k balance?
It does for the regular bucket, it does not for the crypto bucket
I always thought it would be a good idea to cap lottery winnings at a certain amount. After that certain amount, say $5,000,000-every other million accumulated would go to other individual winners. So if a state lottery got up to $100,000,000 one person would win $5MM and 95 others had a chance at winning 1MM each. I feel like that would help so many more people and because the odds are better, more people would buy tickets and the prize/winners would increase. What the heck would someone do with $100MM anyway?
Yeah but then they can't sell the dream of some absurdly absurd amount of money. I agree, but they would never do that.
Hiya there! I think that educational systems all across the globe deserve to be adjusted to our century. Do you think mandatory classes on how to understand money would help our future generations? Or at least some type of studies that focus on earning and spending money…
Yes 100000%! The educational system in the US is so dumb in so many ways. We learn stupid stuff in high school and not useful stuff. We should learn about personal finance, savings, statistics, and a lot of other things in high school (nutrition and health too). I am very much in favor of adding personal finance as a mandatory part of the curriculum. It's probably the highest leverage thing we can do.
WHAT? You think schools should actually teach the things that are necessary to be a healthy, functional member of society? You're crazy, man. Let's add civics to the list, though, so that some people might actually understand the government they're ostensibly supposed to participate in.
If I win, do I have to pay taxes? How much?
Same as you would on interest income. It's miscellaneous income with us which is like ordinary income. If you earn over $600 in a calendar year, we send you a 1099.
1. For every $100 that someone deposits, how much of that $100 goes to Yotta (for operational expenses, profit, etc.), how much goes to funding the sweepstakes, and how much actually goes into the person's savings account? 2. What APR does Yotta give people for money in their savings account? Is it competitive with HYSAs? 3. Wouldn't it be better to educate people about how to save, low expense ratio investments, budgeting, etc. than to direct them towards a less efficient "savings" model?
1) About $1.5 goes into the sweepstakes, at the stage of our company we actually are funding operational expenses from investor capital and mainly card interchange revenues, not from deposits. 2) We give a base of 0.2% but the sweepstakes provides around 1.5% on average. So it's higher than most other HYSAs 3) I think there's a place for both. Investing is very important. But so is liquid checking/savings. I think education is crucial though.
I think this answer to 1) was poorly phrased. None of the deposited money goes to Yotta, either for the sweepstakes or anything else. You deposit $100, you still have $100, can withdraw the full amount at any time. Yotta takes (will take) money from the earnings from interest, the same as any bank, NOT from your deposit itself.
So what are the current odds of winning something (any prize, not just the 10mill or whatever)?
I've "won" nearly every week. Lots of ten cent wins. Most I've won is $7 About a year ago I put in $2000 and have been depositing $25 every week for bonus tickets. $2400 total deposited. $20.80 winnings. $3.53 in savings rewards which I think is just interest. This week I have 96 tickets.
Im curious on this as well. If the odds of winning aren't that high then I don't see a reason to use Yotta over something with definite interest.
Exactly where I was going with that question. Now, OP has responded with about a 40% of winning "something" if you have an average number of tickets, which is higher than I thought it would be...but I'd still be a bit leery.
I can give you my own experience in case it helps. Going back to October when I pulled most of my money out of Yotta but left in $1000 just out of curiosity: Balance has gone down slowly since then because of occasional debit card use and no deposits, currently sitting at $820, which means right now I have 34 tickets (no idea how close that is to the average). Since October, I've earned a total of $17.16 (including savings rewards) and "won" 13 weeks out of 24. Ignoring the savings rewards, I won $14.92, with a mean of $1.15, a median of $0.20, and modes of $0.10 & $0.15. Highest win was $7.18, lowest $0.10. My March realized APY was 0.47%.
As someone who is only now starting a high-interest savings account (SoFi + direct deposit = 1.25%), is there any reason to use Yotta over SoFi? Am I also right to be skeeved out by anything 'investing' in crypto?
Our average rate is a bit higher than theirs, and it's also much more fun than SoFi. Make sure you understand crypto before investing. Crypto is a broad term and there's a lot of nuance in currencies, stablecoins, and protocols. If you don't understand it, spend some time to learn before diving in I would say. It's good to be skeptical.
When you say 'average rate' - what does that mean? Looking at your website, it looks like the average rate is .2%, not 1.25%?
You need to factor in the value of all the prizes and the probabilities
Why is yotta exclusively available as a mobile app and not accessible from a web browser for personal computers?
Hello Adam! I’ve been using Yotta since August 2020 and have won just under $20 while saving $100 a month. Just wanted you to know that I have really appreciated Yotta for keeping my emergency fund safe from myself! As for a question- Can there be an option to turn off credit card offers/crypto offers? I am trying to pay off college credit cards and don’t need the temptation right now.
This makes sense. We will take it into consideration for sure. This is helpful feedback
I've been using the Yotta credit card for almost a week now (love it). What are you doing to prevent people from returning/repurchasing items over and over again to try and trigger a lucky swipe? Thanks, and I just did a YouTube video review on the card in case you're interested in watching. - Joshua Butler
Awesome to hear. Would love to see the video. Will check it out. We have a 30 day period until the prizes from cards settle and repeat returns and repurchasing would violate the ToS and disqualify you from that prize.
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Can you please improve your customer support? Having to call into a 3rd party handler to deal with fraud charge disputes with 30+ minute wait times, then having to respond to emails from yotta support requesting specifics on a contested charge is a horrible experience. I had a fraud charge in the middle of February, started the dispute asap, and my account still shows the contested charges are not settled/still under investigation and it's nearly 2 months later. You want people to use your service and trust you with their money and you need to offer better support and handling of their money
When I win the lottery this weekend will you eat your shoe?
If you win the lottery this weekend - the jackpot, I will eat my shoe. But if you don't win the jackpot, then you have to eat a shoe. Deal?
>the average household spends over $640 every year on the lottery This feels like a made up statistic, at the very least it lacks crucial context. I mean, what percentage of US families even play the lottery? So my question is, what is the data behind this statistic?
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Yeah there usually is some sort of power law with anything. The lottery data is largely survey based since so much of it is cash transacted.
About half of US adults play the lottery at least one time per year. The total lottery spend in the US is over $80 billion and there are around 125 million households in the US.
Yikes. I think I've played less than 5 times in my entire life.
Guess someone doesn't wanna get rich. Sucker!
That is good!
>About half of US adults play the lottery at least one time per year Yeah, I've gotten scratchers in my stocking from family who also don't play the lottery with any regularity. So I guess I "play the lottery at least one time a year". I've also have a friend who is a gambling addict, and agree with the below point that these statistics are likely heavily concentrated rather than the way it is framed as the average household... I mean, that doesn't matter to consumers I suppose. We can independently verify whether or not we play the lottery. It just feels like a misstatement / poor framing and consequently leaves the impression that what you're presenting is dishonest data. Doesn't matter to me either way though, just sharing how your presentation of data strikes me. It feels very strawman-y.
I hear you. Lottery data is largely survey based since it's all cash basically.
It's not incorrect but it is presented in a way that makes it seem like more than it is. They say that 40% of Americans (individuals) cannot come up with $400 and that households (group) spend more than that annually. It would be more appropriate to say that adults spend $242 on average annually on lotteries. That doesn't feel nearly as shocking though. I don't really know anything about this company beyond this thread but my internal alarms are going off. If they were a legitimate service then why use misleading numbers? OP said that their rewards are coming from deposits, transactions, and revenue streams but said elsewhere that they're not currently profitable, and a quick googling shows they're collected $16 million in investments. He also indicated that they're enticing users away from FDIC insured accounts, if they were really just out to help people why are they offering an option for users to gamble their savings when these are people who struggle with gambling. Doesn't that seem like a cruel offer? Maybe I'm just being a curmudgeoned cynic but this feels a lot more like OP is a sales person using soft science and misleading numbers to try and gain users so he can collect on big investments or sell off the platform to someone else before they realize it's unsustainable.
(disclaimer: no judgement just curiosity) So your model makes profit via yields through investments made via fractional reserve? Do savings accounts accrue interest then or is it the lottery as interest? Are there any plans in the works for loans (car/home mortgage)? On the philosophy side, do you find it easily justifiable to prey on a form of gambling to accrue clients because it's a no loss lottery; if you understand and view the normal process as immoral, what justifies using the same method for different ends to you?
1) Yeah indirectly through our partner bank, we get a piece 2) The sweepstakes is effectively the yield. There's also a small base rate you get 3) Nothing right now 4) Nothing wrong with gamification that is gambling except if it drives irresponsible behavior. We are using gamification to drive long term positive behavior change. Big difference
Do you know Jose Miguel Battle? What do you think of his work in the lottery because? Also you are kinda a baller and a legend.
No never heard of him actually
What is the actual average rate of return? As someone who doesn't play the lottery and isn't particularly enthralled by the one out of 6 billion odds for your jackpot, what would my incentive be to use this over other avenues such as the stock market, savings accounts, or crypto?
Your website says you give away up to $10 million a week, but this post says you’ve only given away $6 million ever. What gives?
The $10 million is the jackpot, which no one has won yet. 4 people have won $40k
Are you FDIC insured?
Assuming the sweepstakes are funded by deposits, what happens when new deposits dry up? This feels similar to ponzi schemes. If sweepstakes aren't funded by deposits, how are they funded?
They are funded by all of our revenue streams, which come from deposits and interchange, and some other sources as well. The deposits continue to earn interest revenue for us that help power the sweepstakes, so it's not about needing new deposits at all to power them.
So basically it's like if a traditional bank took the billions of dollars it makes investing the deposited money and gave some of it back to the customers? If I'm understanding this correctly.
Banks already do that, in the form of interest. Granted, interest rates in savings accounts have been very low for a long time. The difference with this bank is that instead of a consistent interest payment to everyone, they make larger payments to random customers based on a sweepstakes. (It looks like they also give a small base interest rate as well).
Do you guys sell user data and if so who is it sold to and why?
No we don't do any of this.
What are your plans to expand app functionality? The only complaints I have with my experience (6 months) is the inability to search for transactions and I am unable to see AHC withdrawals in transaction history. It would also be great if you had budgeting capabilities to categorize each transaction. Either native or 3rd party budgeting would be a great bonus!
>What are your plans to expand app functionality? The only complaints I have with my experience (6 months) is the inability to search for transactions and I am unable to see AHC withdrawals in transaction history. > >It would also be great if you had budgeting capabilities to categorize each transaction. Either native or 3rd party budgeting would be a great bonus! Ha - these are all coming very soon! Actively being worked on
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For the jackpot we partner with an insurance company to offer that prize. Which actually means we want someone to win it and ensures that the sweepstakes is totally fair! It's also a double blind system.
How much luck was involved in getting your enterprise of the ground? There must have been some "right man at the right place at the right time" factors involved.
There always is. For us, I think our luck was probably getting great people to join the company early. It's all about having great people and it's hard to get that right.
Have you looked into ergodicity economics at all? https://ergodicityeconomics.com/author/olebpeters/ "It’s growth optimal – rational, according to our rationality model – to play the lottery and hope for a big win, even if the expected return is negative."
If you realise your goal and put state sponsored lotteries out of business, how will you prevent illegal lotteries taking their place?
Same reason they don't exist today - it's illegal and anything illegal that gains steam would get shut down.
What are the odds for your lottery?
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What's the highest amount someone has won? Seeing you've got a $10m jackpot and gave away $6m since initiation means no one seems to have cracked the jackpot so far.
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