Return of the No Loss Lottery: legal framework in the USA

Introduction

The chilling effect of regulation and law.

In the USA banks and credit unions are heavily regulated, so any potential business needs to check with current government laws to insure one doesn't start a business which the government federal or state might shut down once they learned of it. As such research into it's legaity must be done.

Body

US Laws regarding Prize Linked Savings Accounts

Laws in the United States about special savings accounts called Prize Linked Savings Accounts (PLSAs) come from both the big government (federal) and each state's own government. Here's what that means:

Big Government Rules (Federal Law):

The American Savings Promotion Act of 2014: This was a very important law made by the big government. It made it okay for banks and credit unions that are insured by the government to have "savings promotion raffles."
What are "savings promotion raffles"? This is just a fancy way of saying PLSAs. It means you have a chance to win money prizes just by putting money into a savings account or a special savings program.
Okay to be like a Lottery: The big government law says these PLSAs are not the same as regular lotteries that banks and credit unions are usually not allowed to be part of. So, it made it legal for them to offer prizes with savings accounts.
Who Makes the Rules: The law also said that certain groups from the big government (like the people who watch over regular banks and credit unions) can make more rules to make sure these PLSAs are fair and that no one tries to cheat the system.

Each State's Rules (State Laws):

States Had to Say Yes Too: Even though the big government made it okay, each state still needed to make its own laws or say it was okay for banks and credit unions in their state to have PLSAs.
Different Rules in Different States: The rules for PLSAs can be different from one state to another. Some states have special laws that say:
- Who can offer PLSAs: Maybe only credit unions, or maybe both banks and credit unions.
- How to get a chance to win: You might need to put in a certain amount of money to get an entry to win prizes.
- How big the prizes can be: Some states might say there's a limit on how much money or what kind of things can be given as prizes.
- Telling people the rules: Banks and credit unions usually have to tell people clearly how the PLSA works, like how likely they are to win.
- Not illegal gambling: State laws often say that if PLSAs follow their rules, they are not the same as illegal gambling or lotteries.
How Many States: Right now, more than 30 states have made laws or said it's okay for PLSAs. But this number might change as more states think about it. Some states that have these rules include Michigan, Nebraska, North Carolina, Washington, California, Louisiana, Minnesota, and Wisconsin.
The "Save to Win" Idea: One good example is a program called "Save to Win." It started in Michigan and now lots of credit unions in different states use it. It usually gives out money prizes every month and every few months based on how much money people have saved.

Important Things to Know:

Not Like High-Interest Savings: PLSAs usually don't give you a lot of extra money (interest) like some other savings accounts. The main reason to have one is the chance to win prizes.
Helps People Save: The main goal of PLSAs is to get people, especially those who don't make a lot of money, to save more because it's a little more exciting with the chance to win.
Gets More People Involved in Banking: PLSAs might help people who don't usually save money to start saving and learn more about banks and credit unions.