Lotteries you can’t lose, lotteries for picking up litter and lotteries for driving safely. We walk you through some of the world’s strangest lotteries.
We’re all familiar with the idea of a lottery. For less than the price of a coffee, you get the hope of winning a life-changing Jackpot. But have you heard about the US Conscription lottery that randomly selected who went to war or the Taiwanese Receipt lottery trying to improve its tax take? There’s even a new breed of lotteries trying to form habit loops to nudge beneficial behaviours and lotteries using crypto to rework 19th savings schemes. Welcome to the world’s strangest lotteries.
The US Draft Lottery – The draw you didn’t want to win
There can’t be many decisions as monumental as choosing to go to war for your country, but what happens when more soldiers are needed to fight than volunteer?
This was the scenario in 1917 following the US declaration of war against Germany. For many in rural America and especially in the Southern States, the events in Europe seemed distant and irrelevant to their lives, so volunteers alone couldn’t satisfy the number of soldiers required.
Given the draft for the Civil War could be dodged by sending a replacement or buying exemption, a fairer system was devised – a draft lottery.
On May 18, 1917, the Selective Service Act was signed into law, drafting men aged between 18 and 30 years old. This created a pool of 24 million who were then entered into a draft lottery which enlisted 10%, with around half of the 2.4 million rejected on health grounds.
The Selective Service System was used again in World War II and by President Lyndon B Johnson when he decided that the US needed to increase its commitment to troops in the Vietnam War.
The Vietnam Draft Lottery system was introduced to randomly conscript eligible men born between January 1, 1944, to December 31, 1950. In contrast to the significance of the outcome, the process of drawing conscripts was surprisingly mundane, involving plastic tubes and a shoe box.
Each day of the year, from 1-366, was written on paper, placed within a tube, mixed in the shoe box, and then transferred to a glass jar from which they were drawn.
The first number out was 258, corresponding to September 14th; if that was your birthday, your number was literally up.
The Malt Lottery: A 17th-century beer-powered bet
Modern lotteries are great at selling dreams but, in reality, are just efficient machines for delivering indirect tax to authorities. But this wasn’t always the case. The earliest lottery trialled in England in 1697, known as the Malt Lottery, ended in shambles.
William III was desperate to raise funds for yet another war with France, but tax revenue was shrinking because the nation’s money was being debased.
Coin clipping was driving good money from circulation, counterfeiting was rife, and there was a constant flow of the remaining silver to Europe, where it could be exchanged for gold at a better rate than the value face of the coins in England.
In these dire circumstances, the government were happy to consider any novel ideas, the most outlandish of which was the Malt Lottery.
The Malt Lottery owes its name to the source of prize funds which came from the duties charged on beer. Despite the name, the Malt Lottery was more complex than selling tickets for the chance to win a Jackpot.
The Malt Lottery started in April 1697; part raffle, part bond and part money substitute, with tickets acceptable as legal tender.
However, that confusing trio of applications and ticket price of £10 (a huge sum at the time) led to an underwhelming response; just 1,763 tickets were sold out of 140,000.
Such was the government’s desperation that the remaining 138,237 tickets were considered as good as money, with some sailors and marines unfortunate to receive them as their salary.
Much of that failure could be put down to the disaster of the first lottery incarnation called the ‘Million Adventure’, trialled in 1694, which offered a 20-1 shot at a prize ranging from ten to 1,000 pounds plus a guaranteed interest for 16 years.
Despite its compelling name, it was more farce than an adventure. With the Mint unable to meet the promised returns, the Million Adventure almost collapsed, leaving the population sceptical of the whole idea of lotteries.
The Malt Lottery was also hampered by fears of fake tickets, with the most famous counterfeiter, William Chaloner, quickly eyeing an opportunity to make a killing.
These attempts at financial alchemy are the precursors to Prize Linked Savings and the crypto equivalent – No Loss Lotteries.
No loss lotteries – Crypto alchemy or a new spin on a familiar format?
No-loss lotteries are crypto-powered prize draws where the cost of your entry is returned. PoolTogether is one example, relying on DEFI – decentralised finance – a growing ecosystem of yield-generating digital applications powered by blockchains like Ethereum that function outside traditional banking.
There are no sign-up forms, credit-scoring or KYC. You click a button to connect your crypto wallet with a Smart Contract – like a banking robot – and digitally sign an agreement defined in code.
In the case of PoolTogether, the Smart Contract takes deposits from players in USDC (a synthetic version of the US dollar known as a Stablecoin) and invests them in DEFI services like Compound, which automatically pays interest on funds held there. PoolTogether aggregates those yields from all player deposits (savings) into a prize pool.
Players earn ‘tickets’ to win that prize pool in proportion to the amount deposited, with their chances of winning based on the average deposited amount over the prize period.
Randomised prize draws take place weekly using a Verifiable Random Function (VRF), crypto’s attempt to create a provably fair digital equivalent of pulling a ball out of a machine.
DEFI protocols like Compound are “fully liquid“, meaning players can withdraw their full deposit anytime without requiring approval.
PoolTogether doesn’t even take a cut for facilitating the operation – unlike a state or private lottery. So there you have it, folks, a No Loss Lottery. A free shot at winning a prize with no downside. Well, not entirely; the devil, as ever, is in the detail.
Though it’s tempting to believe PoolTogether has discovered a crypto-powered form of financial alchemy offering generous returns with no risk, the truth is far more analogue.
PoolTogether is based on a concept called Prize Linked Savings, which dates back to the mid-19th century. The most notable version of PLS used today is the Premium Bonds, the UK’s biggest savings product, with 21 million people investing over £100bn.
The Litter Lotto – Bin it to win it
No matter how many signs tell us to bin our rubbish, a significant minority are unwilling to comply. So if the stick doesn’t work, maybe the carrot will.
What if picking up a piece of rubbish might win you a cash prize? It seems ludicrous, but that’s exactly what the UK’s Litter Lotto, launched in August 2021, is doing with over £300,000 in prizes awarded to date for responsible binning.
How the Litter Lotto works
The premise of a litter lottery is as simple as it sounds. To play, you download a mobile app, register your details and set off hunting for trash.
When you see a coke bottle, crisp packet, or one of the 4 trillion cigarette butts discarded a year littering the street, you need to pick it up and take a photo via the app as you place it in a bin, which records the date, the time and your location.
That action is treated as an entry into a £1,000 weekly lottery and makes you eligible for a £5 spot prize with larger monthly Jackpots of £25k offered on occasion.
To counter inevitable abuse, the Litter Lotto has specific guidelines on what constitutes litter and bulk collection, but the emphasis is on getting more people to pick up litter and creating a habit loop.
Given its unique appeal, the Litter Lotto has, according to its founder, attracted attention from the media and boasts tens of thousands of UK users, each binning three pieces of rubbish daily via the app.
But the Elephant in the room (or the wheelie bin) is how Litter Lotto funds the prizes given entry is fee where? The scheme isn’t funded by the government or charity but by sponsorship. Hearing that Mcdonald’s is Litter Lotto’s UK partner might cause a collective eye-rolling; after all, they are a massive net litter producer.
The Litter Lotto founder, David Landsberg, says that litter isn’t McDonald’s fault but has become their problem. He does, however, admit that some European partners choose to keep their participation secret, presumably because they want to tick an ESG box, reinforcing the suspicion of greenwashing.
The other concern is that, like the Speed Camera Lottery, a Litter Lotto doesn’t positively change behaviour around littering but rather creates an expectation that any public good should be financially incentivized.
If the Litter Lotto can use a financial incentive to nudge people to better habits around litter collection, that’s a good thing, but it is just suppressing the symptoms of the problem of why rubbish gets generated and discarded in the first place.
The Swedish Speed Camera Lottery
The idea that lotteries might be a useful tool for behavioural psychologists isn’t limited to cleaning up our streets. In Sweden, a lottery was used as an incentive to encourage drivers to keep to the speed limit.
The idea didn’t originate in Sweden but from the Fun Theory Award, a joint adventure between Volkswagen and DDB, a prominent advertising agency.
The Speed Camera Lottery, proposed by San Francisco’s Kevin Richardson, a games producer for NickelodeonKids, was the winner from 669 entries across 35 countries.
How did the Speed Lottery work?
The Speed Camera Lottery was tested in one busy street in Stockholm – known for bad driving behaviour – in October 2010, in collaboration with the NTF (the Swedish road transport authority). The Hastighets Lotteriet, as it was locally known, had a first prize of 10,000 SKR.
The campaign ran until June 2011 with identical trials in Helsingborg, Kalmar, Karlstad, Gävle and Umeå.
A key component of the Speed Camera Lottery was that the bar to entry was so low. You just needed to stick to the speed limit, and automatic numberplate recognition (ANPR) would automatically put your name into a draw to win the Jackpot. 61-year-old Bengt Holmström was the lucky winner of the Stockholm lottery.
Did the Swedish Speed Camera Lottery work?
The Swedish National Society for Road Safety claimed that a sample of 24,857 motorists reduced average speed by 22% (from 32 kmph to 25 kmph).
The campaign was also a success from a PR perspective, with the unique nature of the campaign generating worldwide news coverage,
How was the Swedish Speed Camera Lottery funded?
In Richardson’s original proposal, the prizes were funded by fining speeders. That win-win logic may have played a big part in impressing the judges, but crucially, in the live trial, the NTF decided to use funding from Volkswagen.
Why hasn’t the Swedish Speed Camera Lottery been replicated?
The Swedish Speed Camera Lottery was discontinued in June 2011 after the trials ended and remains the only example of using financial incentives to improve road behaviour. This is likely for a number of reasons.
Firstly, it exposes the reality that speeding fines aren’t really about deterrence but revenue generation. Local authorities can’t afford to give up that income, on top of which there is the initial set-up cost and maintenance.
There’s also the concern that the mechanism only produces good behaviour where the incentive applies; nothing stops drivers from putting their foot down elsewhere. The same logic discourages parents from using rewards to get good behaviour from their kids.
The counterargument is that this kind of behavioural nudge is intended to create habit loops, diminishing the importance of the reward, but either the evidence didn’t support that, or the idea just wasn’t politically palatable.
There is a stigma attached to using subtle means to nudge behaviour, even when it involves incentives. Despite positive results, the fact that Swedish Speed Camera Lottery remains an isolated experiment suggests that lotteries aren’t a magic bullet for incentivising positive behaviour around road use because the subject is more complex than simply getting people to slow down.
The Taiwanese Receipt Lottery
Government-run lotteries are a commonplace way of raising public funds, but since 1951 Taiwan has been using a receipt lottery to increase tax indirectly.
Every sales receipt in Taiwan includes a unique ID which is used as the basis of a random draw with a $350k Jackpot every two months. The idea behind the Receipt Lottery is to increase the number of businesses issuing receipts which should correlate to a greater overall tax return.
In its first year, the Taiwanese Receipt Lottery increased business tax returns by 75%, and it is still running 72 years later, but its impact has diminished as a society, and the value placed in time has changed.
As fun as it sounds, collecting and checking receipts is a chore, so much so that its most popular with children and pensioners, while many people donate receipts to charities, begging the question of why the government don’t just cut out the middleman and fill the role the charities provide.
The success of Taiwan’s Receipt Lottery has led to similar initiatives in China, the Czech Republic, Lithuania, Portugal, Romania, Poland and Slovakia – let’s face it, which isn’t struggling to increase their tax take.
Unfortunately, analogue receipts are becoming increasingly less commonplace, but given that NFTs are essentially a blockchain-based receipt, get ready for the NFT-based receipt lottery.
Health Lotteries – Can money make the medicine go down?
If asked about what’s important in life, health would likely appear at the top of most people’s lists, but actions speed louder than words. Western nations are seeing such an epidemic of lifestyle-related illnesses that lotteries are being used to incentivise good behaviour. Here are just a few examples from Philadelphia, a hotbed of groundbreaking experiments in behavioural psychology thanks to the University of Pennsylvania.
Philly Vax Sweepstakes
partner with the City of Philadelphia in 2021 to use lotteries to incentivise Covid vaccination with US$400,000 in cash prizes over a six-week period between 7 June and 19 July 2021.
The prizes were awarded for first-time vaccination in zip codes with low vaccination rates. A special booster feature gave three randomly selected Philadelphia zip codes a 50 to 100 times higher probability of winning prizes than others.
The study findings suggested that the impact of the lottery incentive was marginal, likely convincing those without strong feelings against vaccination. Success was also reliant on simply making people aware of the campaign, which is a separate set of challenges.
Overall, the findings suggest that when residents are given ~100× the chances of their neighbours in other zip codes to win up to US$50,000 for getting a vaccine (roughly 1 in 2,000 odds) and when this makes the front page of the local newspaper and is featured on the local nightly news, it may generate a very small boost in vaccinations.Nature.com
The Regret Lottery
Improving post-treatment aftercare was the focus of another health lottery, again trialled in Philadelphia. The aim of the Regret Lottery was to improve the rate at which patients weigh themselves and take medication, which is crucial in the recovery process.
Scales and special digital pill bottles would provide feedback data to indicate those following the directed aftercare who would be eligible for a lottery offering a 1 in 5 chance of winning $5 and a 1 in 100 chance of winning $50.
It was named the Regret Lottery because those participants who failed to follow guidance would be notified of what they could have won – regret is a powerful emotion.
The design of the campaign combined the use of intermittent rewards – to keep users engaged – which might average out to about $500 a year. The obvious question is, why not just give patients that money up front?
Like other lotteries designed to incentivise good behaviour, the Regret Lottery aims to create habit loops, so weighing yourself or taking medication becomes an ingrained behaviour.
The initial results of the Regret Lottery were encouraging, with 80% compliance. Given that health insurance companies are incentivised to minimise claims, the intention is to get them to fund this kind of lottery.
Weight loss lottery
In 2008 a trial aimed at encouraging weight loss of 1lb a week for 16 weeks within a group of fifty-seven people aged 30-70 with a BMI between 30-40 split the group into three. One cohort received no incentive, just a monthly weigh-in; one group was entered into a lottery, while the third group were a deposit contract that they could match.
The control group lost an average of 3.9 lbs, while those in the lottery shed 13.1 lbs, and the cohort who entered a deposit contract performed best, losing an average of 14 lbs.
Encouraging as these results sound, the difference in weight loss between the three groups seven months down the line wasn’t statistically significant, suggesting that incentives like lotteries weren’t game changers for encouraging weight loss.
These are just a small sample of the trials that have used lotteries to improve our health, including encouraging physical activity, keeping to treatments and completing surveys and assessments.
No Free Lunch
There is no such thing as a free lunch, but if you’re hungry to find out why, we’re here to help.
You can learn the meaning and origin of the no free lunch concept, as well as the broader philosophy behind the idea that nothing can ever be regarded as free.
We look at our relationship with money and truth, examining all of the supposed shortcuts, life hacks and get-rich-quick schemes.