The "No-Lose" Lottery

World Books in New York's Penn Station sells more than $8 million in tickets a year. All it takes is a dollar, a dream, and a willingness to overlook the terrible odds.

For this week’s Freakonomics Radio segment on Marketplace, I sent host Kai Ryssdal two envelopes. The first one contained an object that Americans spent over $58 billion on last year: a lottery ticket.

We know Americans like to play the lottery, even though it’s not a very good investment. The odds of winning aren’t great, and the per cent of payment returned to players is way below any casino. But who’s counting? After all, it’s only a couple bucks.

Marketplace Segment

The “No-Lose” Lottery

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However, our country’s poor savings rate tells us that perhaps somebody should be counting. In this segment, you’ll hear from a group of people who have come up with a way to take America’s love for lottery and match it to a financial product that just might jack up America’s savings rate. Only one problem: more often than not, it’s illegal.

Listen here to find out what the “no-lose” lottery is all about, whether Kai Ryssdal is a big winner, and what the heck is in Envelope No. 2.


What are web sites of banks that offer this lottery program?

Guido Stein

I would also like to know where one can invest in this lottery?

Guido Stein

I found this link to the save to win program and thought other might be intereseted:


Here is the official Save to Win program website:



Simple Living News Update

[...] The No Lose Lottery “…We know Americans like to play the lottery, even though it's not a very good investment. The odds of winning aren't great, and the per cent of payment returned to players is way below any casino. But who's counting? After all, it's only a couple bucks. [...]

Table Talk Friday 11.19.10 | The Raconteur’s Table | Half Board with Lunch

[...] while I was walking today, I was listening to Freakonomics Radio Podcast. In today's podcast the first thing asked [...]

Brian Lockwood

I recently went through my Mothers old papers and found 2 premium bonds that my Grandmother bought for me on my birthday and my first birthday.
That was in 1957 and 58. I updated the National Savings database last month.
They haven't won in all that time. I am not cashing them in though.


I love listening to 27 minute commercials for banks. So,... people put money in the bank and every so often a person get a big sum of money. The banks say "we can help the economy by giving out loans now that we have these new customers". What they don't say is how much money they keep and give out as bonuses. The banking system has little credibility with the public right now. And,... this just seem like an other trick to get people to give them money and get nothing in return. Lovely.


Well aren't you just the pessimist. You are definitely neglecting the fact that, although it may benefit banks, it also encourages people to save, and it also allows some savers to win prizes. Seems like a win, win, win situation despite being "good for the big bad bank."


Not sure you understood the point of the podcast Jordan. What does a lottery have to do with the bonuses?
Is it a bigger problem they hand out these bonuses (like they always have) or that people waste their money when they could be saving it?


Also, I wasn't aware that people EVER put their money into banks expecting something in return, outside of interest. This is just an incentive to do so in the first place. It's a great idea in my opinion.

Robert Hastings Jr

What are the legal rules for this program? to prevent fraud or banks to use this to loot depositer's account interest. Some States have ballot Amendments and Initives (laws)elected(enacted)by the public. What laws can the People enact to get PLS in these Ststes.


I'm participating in this Save to Win, but not for the pay out. It would be cool to win, but the bank lets you put the money in the CD $25 at a time. I could never get my emergency savings up when I had to wait until I had a large amount of cash (for me) to put it in a CD. In a regular savings account, it gets spent. Now I can make regular small deposits into a CD. I love it. I already have $2,000 in the last year and a half. That and it isn't a bank, it's a credit union and that makes a difference to me at least.


Here's one way to get the state on board w/ allowing the banks to have PLS accounts: have the state charter the lotteries to run their own PLS versions of lottery games.

As it is now, almost any investor group w/ enough capital can apply for a bank charter. Why should the various state lotteries be considered any different? Florida lottery can open up their own bank. The OCC/ or the FDIC can regulate them just as they do the rest of the state and federal chartered banks. It may cannabalize the scratch-off and powerball revenues, but in the end won't the rising tide of savings raise all ships?

On the other hand, allowing banks to do this may be the answer to raising capital requirements to the levels required by Basel III. Why not give it a shot? Sounds feasable.

The simple fact is, unbanked an underbanked are a large part of the problem w/ respect to personal finance in our modern banking system. Let's introduce these populations to modern savings and banking in a way that they can understand and toward which they are receptive.



I think this idea is great. I would love to have this Prized Linked Savings account in my state. It seems as if it could help our country save more as well. An incentive to save sounds great. However, I still find a flaw in the idea that I think we should definitely keep in mind. The majority of the people, according to Freakonomics, that buy lottery tickets are those that can't afford them in the first place. They put a couple bucks into the lottery hoping to strike it rich. The key point is the price of lottery tickets. They are cheap. It is easier to fork out a couple bucks every pay check than, as Karren stated (the person above participating in the Save To Win program), a minimum deposit of $25. Furthermore, I do not believe that very many people would keep a savings account, or even a CD, with a meager 25 bucks. or 1 or 200 bucks for that matter. The idea is great, however, I do not think this idea will greatly effect or influence America's desire to save money. Especially since the majority of money saving Americans already have savings account they do this with. This will only make banking more "fun" for those that are already bank savvy.


You Seriously Can’t Lose |

[...] Think about it – you seriously can’t lose. If you put $10 into a PLS, you will still have that money tomorrow, and yet you will also have the chance to win a big cash prize. Whether you’re low income, high income, bankable, unbankable, risk averse or Evel Knievel, this is a great deal! Of course, the officials of state-controlled lotteries don’t like this idea very much, and the concept unfortunately is falling into the I-can’t-believe-how-something-so-smart-and-intuitive-could-be-shot-down-by-politics category? (the Freakonomics guys nailed it with this piece). [...]

Food For Thought « Transforming Long-Term Care

[...] The No Lose Lottery episode prompted me to encourage our HR team to see if there was something we could apply to instigate more savings among our employees.? Of course we have a 401k like everyone but is there another, cutting-edge option patterned after lottery principles that would be more effective? [...]


Does anyone know the name of the south african rap song in this podcast?

Ravi D V R

This is amazing,simple and genius.

Now let's move on to solving drugs and prostitution too.