Prize-Linked Savings

Definition

States that allow financial institutions to offer prize-linked savings programs, 2012.

Description

Prize-linked savings (PLS) programs give savings accountholders the opportunity to win prizes when they make deposits. In these programs, financial institutions offer consumers a savings product with a low minimum balance requirement; accountholders make monthly deposits, which qualify them for monthly and/or annual drawings. The possibility of a prize encourages greater savings. Unlike gambling, however, no one loses from participation in a PLS program. Prize-linked savings programs focus on the entertainment value and fun of winning prizes, but without risking any principle and with the knowledge that one is building an asset. Not everyone “wins” one of the prizes, but everyone comes out ahead with increased savings.

To enable PLS programs, states need to ensure that banking and gaming regulations do not prevent financial institutions from holding private lotteries. In some states, laws already allow savings promotions. States where PLS is not legal can enact legislation that exempts financial institutions from regulations.

For more information about prize-linked savings, visit D2D Fund's website and see their recent report Playing the Savings Game: A Prize-Linked Savings Report.

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Prize-Linked Savings

State	Legality of Prize-Linked Savings	Program Implementation
Alabama
Alaska	Existing laws may allow for prize-linked savings
Arizona	Existing laws may allow for prize-linked savings
Arkansas	1
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia	Existing laws may allow for prize-linked savings
Hawaii	2
Idaho
Illinois
Indiana
Iowa	1
Kansas
Kentucky
Louisiana
Maine	Yes (legislation passed in 2010)
Maryland	Yes (legislation passed in 2012)	Program in planning stages
Massachusetts
Michigan	Law already allows prize-linked savings	Program has been implemented
Minnesota
Mississippi	1
Missouri
Montana
Nebraska	Yes (legislation passed in 2011)	Program has been implemented
Nevada
New Hampshire
New Jersey
New Mexico	Existing laws may allow for prize-linked savings 1
New York	2
North Carolina	Yes (legislation passed in 2011)	Program has been implemented
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island	Yes (legislation passed in 2010)
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington	Yes (legislation passed in 2011)	Program in planning stages
West Virginia
Wisconsin
Wyoming

Source

“Legislative Success.” Allston, MA: D2D Fund, 2012. Data accessed in November 2012 at http://www.d2dfund.org/Legislative_Success. Data also provided through email correspondence with the D2D Fund in November 2012. CFED thanks Joanna Smith-Ramani for her assistance in developing and reviewing this data.