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The Lottery Competition

Create social good by fostering changes to lotteries. Read Overview...
1,000,000
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$15
Overview

HOW TO WIN THE CHALLENGE

The winner of The Lottery Competition will be a team or individual who creates the most social good by fostering a change to the way lotteries operate.

The winner will be determined by a public vote on date TBA.

 

THE PRIMARY PROBLEM

Lotteries around the world have been relatively slow to make changes that would create more  positive effects for society.

There are two ways in which a lack of changes are preventing lotteries from having more positive effects on society:

  1. Lotteries have problems that adversely affect individuals and communities. These problems adversely affect countless people. Changes can be made to fix or minimize these problems and reduce negative effects caused by lotteries.
  2. Lotteries have problems that limit the amount of social good they create as fundraisers for good causes. These problems prevent lotteries from positively affecting countless people. changes can be made to fix or minimize these problems and increase positive effects created by lotteries.

Hundreds of millions of people play lotteries every year and an estimated 280 billion dollars were spent on lotteries tickets around the world in 2015 (1).

In the United States. people spend more money on lottery tickets annually than on sports tickets, books, video games, movie tickets and music- combined! (2)

Because lotteries operate on such a large scale, the effects caused by problems within lotteries are amplified and changes have the potential to create immense positive impacts for our society.

 

(1) https://www.world-lotteries.org/images/publications/compendia/wla-compendium-2016-rev1.pdf

(2) http://money.cnn.com/2015/02/11/news/companies/lottery-spending/


 

HOW THE LOTTERY COMPETITION ACCELERATES CHANGES IN LOTTERIES TO FOSTER LONG-TERM SOCIAL GOOD

This competition aims to provide a breakthrough for the primary problem and catalyze socially beneficial changes in the following ways:

a) Spreading awareness of how large of an effect lotteries have in our society.

Collecting and sharing relevant information in one location to show all of the effects of lotteries (both negative and positive) as objectively and thoroughly as possible. This information includes (but is not limited to) financial estimates, articles, news programs, documentaries and editorials about lotteries.

Inviting individuals from anywhere in the world (regardless of their prior experience with lotteries) to take part in sharing information about lotteries and their social effects.

b) Encouraging public, proactive discussions to decide how we, as a society, want to handle our lotteries going forward in the 21st century and providing a common ground where people can work together to discuss potential ways to improve lotteries.

Creating discussion forums and sharing ideas about potential changes (and the social good that may be created by changes) to serve as inspiration for problem solvers to think of ways to create social good.

Inviting individuals from anywhere in the world (regardless of their prior experience with lotteries) to share ideas and opinions aimed at creating social good.


c) Empowering individuals from all over the world to help make changes in lotteries to create social good. In addition to sharing ideas and information about lotteries, everybody can play a part in creating social good by participating in the public vote, contributing to the crowdfunding campaign, and/or spreading awareness/excitement about improving lotteries to create social good with their communities and social networks.

d) Generating public attention, interest and excitement about finding solutions to create social good by holding the competition and crowdfunding campaign in an all-inclusive, public manner.

f) Crowdfunding a prize to provide monetary and personal incentives for problem solvers to focus time and effort on actually implementing changes to foster social good.

Building emotional support and enthusiasm for competitors by holding the crowdfunding campaign and competition in a public manner.

Because an unlimited amount of problem solvers are allowed to enter the competition, all types of innovations can be tested and experimented in order to find the most socially beneficial solutions.

g) Spurring innovations from a variety of angles by encouraging solutions from all different types of problem solvers and methods. 

NOTE: Although only one team will win The Lottery Competition, the competition aims to catalyze long-term and resounding positive social effects all around the world. It does so in these ways:

Rewarding and publicly celebrating the team operating the winning lottery to bring attention to successful implementations of changes that foster positive social effects.The successful implementation of effective solutions can set an example for other lotteries around the world to learn from in the future

Potentially inspiring pro-active and constructive approaches to other issues, unrelated to lotteries.

 

THE PROBLEMS THAT COULD BE FIXED OR MINIMIZED BY MAKING CHANGES

There are at least four specific problems that could be fixed or minimized by making changes in lotteries. These problems are (in no particular order):

  1. Lotteries do not always conduct their public communications and structure their playing environments in the ways that foster the most positive social effects. There are three ways in which this problem manifests:

a) Lotteries do not always act responsibly as operators of public gambling games.

Lotteries inherently involve public gambling, which comes with the risk that some participants may play when it is not in their best interests (such as when they have small discretionary incomes or when a gambling addiction occurs). This kind of gambling behavior can cause harm to themselves and their community.

This means that lottery operators have an important duty to operate as responsibly as possible in order to limit the risks to participants and society as a whole.

However, in some cases, lotteries have been criticized for encouraging unhealthy gambling behaviors (see examples TLC.org/criticisms of lotteries). It is also possible that some decisions that lottery operators frequently make, such as focusing their advertising on big prizes and maintaining relatively impersonal playing environments, may increase these kinds of gambling risks. As long as lotteries operate public gambling games, there may always be some level of unavoidable risk that creates negative effects, but the amount of risk can vary greatly depending on the ways that lotteries communicate with the public and how they structure their playing environment.
 

b) Lotteries may frequently miss an opportunity to use their unique role in our society to bring people together in a spirit of contributing to social good. Lotteries raise an enormous amount of funding for good causes, but this isn’t always apparent because of the way that lotteries design their communications and environments (and the social good that lotteries do create is often overshadowed by criticisms of problems within lotteries). Lotteries are fundamentally similar to charity raffles, but charity raffles are often highly regarded for bringing people together to raise money for good causes and for promoting positive social values. Lotteries rarely seem to have this kind of effect today, but there are indications that they could if the right changes are made.


c) Lotteries have a large influence on our culture because they receive so much attention in our society, but this influence isn’t always as positive as it could be. In addition to directly affecting participants, lotteries may indirectly influence our society in wide ranging ways (and affect how people think about issues other than lotteries). For example, people who are dissatisfied with problems in lotteries may be more likely to be dissatisfied with the ways that societies or governments operate in general. This cultural influence (and whether it's positive or negative) may vary depending on the ways that lotteries communicate with the public, structure their playing environment, and on how lotteries handle the next three problems described.
 

2.    Lotteries do not always operate transparently, which makes lotteries more vulnerable to corruption. In 2015, for example, over 2.7 billion dollars from the Chinese state lottery were determined to be misappropriated by officials (more examples can be found on TLC.org/criticisms/corruption).  Every dollar that is lost to corruption is a dollar that is not going to good causes.

Additionally, when people don’t know exactly where their money goes, people lose trust in lotteries and are less likely to feel good about contributing to good causes.

3.    Lotteries often have high operating costs, which can decrease the amount of money that they can use to fund good causes. Each lottery is different, but it is common for lotteries to spend approximately 5% ($14B per year globally) of their total revenue on operating expenses (3).

These expenses often include (but are not limited to): paying retailer commissions, printing tickets, shipping tickets to retailers, purchasing and maintaining ticket machines, advertising, employee salaries, and administration expenses. (4) Because lotteries do not always quickly adopt innovations, it is possible that some of these expenses could be reduced or avoided by implementing new technologies or business practices.

In order to understand how large of an effect that reducing operating expenses may have, it’s important to emphasize the enormous size of lotteries. Approximately 280 billion dollars are spent globally per year on lottery tickets, which means that the annual operating expenses (when estimated at 5% of revenue as the global average) of lotteries is around 14 billion dollars per year. For some perspective, consider that that the United Nations has estimated that it would take 30 billion dollars per year to end world hunger (5).

Because so much money is spent on lotteries around the world, even small reductions in operating costs could potentially provide billions of dollars more to good causes.

4.    Lotteries don’t always direct their funding to the causes/organizations that would provide the most benefit for society. Additionally, lotteries do not always direct their funding toward causes that participants think are the most meaningful (or important) to contribute to. Each lottery operates differently, but it is common for lotteries to dedicate 27% of their total revenue to good causes. This amounts to approximately $76 billion per year combined in all lotteries) to fund good causes (6). (see www.thelotterycompetition.org for a breakdown of how this estimate was made).

Each lottery also allocates their funding in different ways, but it is common for funds to be directed towards public education, investments in infrastructure, and other public projects. The allocation is usually decided by the lottery operators.

The funds that lotteries provide to these causes certainly have and continue to benefit society, but it is possible that the ways that lotteries are allocating funds are not:


a) providing the highest leverage returns on creating social good (or in other words, they may not be creating the most social benefit per dollar funded).

Other organizations that must decide how to allocate large amounts of funds (such as financial firms or philanthropic foundations that apply principles of ‘effective altruism’) have learned that there are often large differences in the amount of returns generated from different allocations.

Considering the immense amount of funds that lotteries raise for good causes (approximately $76 billion per year), even small differences in how much social benefit different causes create could result in a large difference in how much total social good the funds create.

b) providing funding for what participants and society (as a whole) value the most.

People have a wide range of preferences when deciding which causes and organizations to contribute to. It is possible that allocating funding differently could affect participants’ intentions and attitudes, while also altering how societies view lotteries.

Considering the immense amount of people who participate in lotteries, it is possible that aligning funds with participant and societal values could have a large effect in creating social good.

(3) http://www.nytimes.com/2008/06/04/news/04iht-04food.13446176.html

(4) http://fivethirtyeight.com/datalab/what-percentage-of-state-lottery-money-goes-to-the-state/

(5) http://www.nytimes.com/2008/06/04/news/04iht-04food.13446176.html

(6) https://www.world-lotteries.org/images/publications/compendia/wla-compendium-2016-rev1.pdf

 

HOW CHANGES CAN BE MADE TO LOTTERIES TO CREATE SOCIAL GOOD

There are many ways that lotteries may be changed to create social good.

The following describes multiple ways that social good may be created (and includes ideas about potential changes that may be implemented). It is formatted according to the four specific problems identified earlier:

Please note: All of the ideas described below are only intended to serve as inspiration for ideas about potential changes that problem solvers may implement. It is possible that some of the ideas described below would not be good solutions and it is also possible that problem solvers may find solutions that are entirely different from what is described here.

1. Conduct public communications and structure playing environment in ways that foster the most positive social effects. There are three ways that this may manifest to create social good:

A) Adhere to a policy of operating as responsibly as possible to minimize the risks and negative effects associated with gambling. This could create social good by reducing negative effects on both individuals and communities.

B) Use lotteries’ unique role in society to foster a collective spirit of contributing to good causes and promoting positive values. This could create social good by increasing positive effects on both individuals and communities.

C) These changes (as well as changes to the other three specific problems described) may also create social good by positively affecting lotteries’ influence on our culture.

Potential changes that could foster these positive effects include:

 

  • Conduct public communications in a way which promotes positive values and discourages unhealthy behavior.
  • Focus advertising and games more on social betterment and less on big prizes.
  • Encourage safe and responsibly playing behavior. These messages are most effective when they are highly visible, memorable, and repeated.
  • Increase public awareness of the risks of gambling.
  • Establish and frequently refer to protocols and/or checklists to ensure communications are conducted in the most responsible ways.
  • Establish a trusted board, independent organization, or online system driven by volunteer crowd collaboration (perhaps like wikipedia) to review lottery communications.
  • Study fundraisers and charitable organizations to understand and implement elements which contribute to socially beneficial communications.
  • Design and maintain a playing environment that promotes positive values and discourages unhealthy behavior.
  • Mediate the sale of tickets in environments which have been designed to integrate social norms and codes of conduct which encourage safe playing behavior and promote positive values.
  • Structure live, in-person environments and events that encourage safe playing behavior and promote positive values. For example, events held to celebrate funding raised for good causes.  (examples on TLC.org dutch UK) 
  • Design and integrate social media experiences to create social environments where people come together to encourage safe playing behavior and foster positive values.
  • Study charity raffles to understand and implement elements which contribute to positive playing environments.

Potential changes that could reduce unhealthy gambling behaviors include:

  • Make gambling services and programs designed to help people with gambling problems easily accessible to all participants. Examples of services that might be helpful include hotlines, interactive experiences on the internet, local support groups, and rehabilitation clinics.
  • Lotteries (or socially driven volunteers) could conduct research and/or experiments to find the most effective solutions to limit negative effects caused by gambling.
  • Operate as (the legal equivalent of) a non-profit organization. This may reduce any profit incentive which might entice lottery operators to make decisions that conflict with public good.

    Please note:  No matter what what changes are made to lotteries, it is possible that there still may be gambling risks and negative effects caused by lotteries. For this reason, there has been some debate that the most socially beneficial solution could be to prohibit lotteries from offering public gambling games. The Lottery Competition encourages this kind of discussion and any other discussions aimed at creating social good.  The Lottery Competition is agnostic towards whatever changes are made so long as they are made for the benefit of society.

2.  Implement a policy of complete transparency, which could create social good by:

A) Reducing money that is lost to corruption and using that money to direct more funds towards good causes.

B) Increasing trust with participants and making people feel better about contributions to good causes.
 

Potential changes that could be made to make a lottery completely transparent include:

  • Regularly posting all financial and operational information online (For examples of how other charitable organizations have shared their information publically, please see TLC.org in fundraising).
  • Regularly conduct internal audits and undergo external audits to make sure the information released is fully accurate and representative of all of lottery operations. This might be handled by a trusted board, independent organization , or volunteer online crowd collaboration driven by by social purpose (like wikipedia). (Examples at TLC.org)
  • Use a technology such as blockchain for transactions, which would create a (theoretically unhackable) public record of all transactions.
  • Operate as (the legal equivalent of) a non-profit organization. This may reduce any profit incentive which might entice lottery operators to make decisions that conflict with public good.

3. Minimize operating costs and use the savings to increase funds provided to good causes.

This could create social good by providing more funds to good causes and organizations, which would use the added funds to benefit society.

As described earlier, it is important to emphasize the enormous size of lotteries to understand how much social good might be created. Approximately 280 billion dollars are spent globally per year on lottery tickets, which means that the annual operating expenses (when estimated at 5-10% of revenue as the global average) of lotteries are around 14-28 billion dollars per year (source). For some perspective, consider that that the United Nations has estimated that it would take $30B per year to end world hunger (source). Because so much money is spent on lotteries around the world, even small reductions in operating costs could potentially provide billions of dollars more to good causes.

Potential changes that could be made to reduce operating costs include:

  • Regularly conduct internal audits and undergo external audits to ensure funds are not being wasted.  This might be handled by a trusted board, independent organization , or volunteer online crowd collaboration motivated by social purpose (like the crowd collaboration which develops wikipedia) . (Examples at TLC.org)
  • Reduce advertising expenses, which may be achieved by:
    a) Advertising less
    b) Advertising in less expensive locations and mediums. For example, a lottery could advertise less on TV and focus more efforts on building social media presence.
    c) Promoting the social benefit created by raised funds, which may increase free ‘word of mouth’ marketing from people motivated by social purpose.
     
  • Refine distribution and/or sales methods
    a) Negotiating contracts with retailers to lower commissions. Retailer commissions may also be lowered by working with organizations that have aligned interests in creating social good.
     
  • Implement new distribution and/or sales methods
    a) Conducting ticket sales online could drastically reduce expenses such as retailer fees, shipping tickets, maintaining ticket machines, and printing tickets.
    b) Implementing a technology like blockchain could potentially reduce even more expenses.


Please note: Selling tickets online, however, may increase risks of unhealthy gambling behavior because it could make it easier for participants to play when it is not in their best interest. Legal restrictions also might make online sales particularly difficult to implement. For both of these reasons, potential changes like these should not be made unless these reasons are carefully considered and handled responsibly.

  • Base operation out of a country/jurisdiction where there are less fees and/or restrictions.
  • Communicate with local authorities to find ways to lower fees and/or other expenses that result from regulations.
  • Outsource tasks that can be done by volunteers who are motivated by doing social good.
  • Explore tools and technologies that may help foster innovations to reduce expenses. Examples of these could include software and websites like Slack, Evernote, Kickstarter, HeroX, or Github.
  • Explore tools and practices that have been effectively implemented in private companies to foster more creativity and productivity from employees. Examples include workspace design, providing space for exercise and play, providing space for meditation, standing desks, and productivity systems like GTD.

4.  Direct funding to the causes or organizations that would create the most positive effects for society.

There are at least two ways this can be approached to create social good:

A) Implement a systematic process to direct funding to the causes/organizations that would provide the most benefit for society. This could create social good by enabling the most socially beneficial organizations to maximize their positive impacts.

Considering the immense amount of funds that lotteries raise for good causes (approximately $80 billion per year (source), even small differences in how much social benefit different causes create could result in a big difference in how much total social good the funds create.

Potential changes that could be made to systematically direct funding to the most socially beneficial causes/organizations include: 

  • Considering quantifiable metrics when deciding how to allocate funds. For example, lotteries could use the same metrics that people use when applying principles of ‘effective altruism’ to determine the most socially beneficial allocations of funding. These metrics include overhead ratios (amount of money the organization/causes spend compared to the amount of money spent on contributing to social good), DALY’s (Disability-Adjusted Life-Years) and QALY’s (quality-adjusted life-year).  


(sources or more info:
http://www.theatlantic.com/business/archive/2015/06/what-is-the-greatest-good/395768/
https://en.wikipedia.org/wiki/Disability-adjusted_life_year
https://en.wikipedia.org/wiki/Quality-adjusted_life_year
(metrics like these are also being developed-
https://opentheory.net/2015/06/effective-altruism-and-building-a-better-qaly/)

  • Considering published ratings and rankings of causes and organizations when deciding how to allocate funds. For example, organizations like GiveWell, the Open Philanthropy  Project, and Charity Navigator have systematically analyzed causes and charitable organizations to determine the most beneficial ways to direct funding.


http://www.givewell.org/charities/top-charities
http://www.openphilanthropy.org/research/cause-reports
http://www.charitynavigator.org/
 

  • Implement a technology like  blockchain, which could potentially use smart contracts to automate the allocation of funds according to algorithms aimed at creating most social good.
     


B) Implement a process that allows members of society or participants to participate in deciding how to direct funding to causes and/or organizations. This could create social good by aligning funding with the causes and organizations that people find most meaningful or important to contribute to.

Potential changes that could be made to align funding with the causes/organizations that people value most include:
 

  • Implement a process where individual participants can choose what organization/causes the fundraising portion of their ticket expense will be directed to. This process could be conducted at the point of purchase or in an online account.
  • Implement a system where members of society or participants can vote to decide where the funds will be directed. This may be conducted online, in paper, or using a technology like blockchain.
  • Focus the fundraising activities of a lottery on a specific, niche issue.  For example, a lottery could dedicate all funds raised to cancer research.    

Note: With either of these approaches, social good may also be created by allowing funds raised by lotteries to be used more flexibly. Lotteries often deal with cash, which means that the funds they raise have the ability to contribute to social good in a large variety of ways. Funds raised by lotteries potentially could be flexibly allocated to:

  • Causes and organizations on local community, national, or international scales
  • Immediate needs (such as relief programs for natural disasters) or long-term projects
  • Large organizations, small start-ups, or communal projects
  • Any type of cause or organization which could benefit from cash funding

Potential changes that could allow funds to be used more flexibly include:

  • Form partnerships with charitable organizations
  • Implement systems or procedures to allow more socially beneficial ventures to gain access to funds raised by lotteries. The UK’s Big Lottery, for example, has implemented this kind of system.


https://www.biglotteryfund.org.uk/funding/funding-guidance/applying-for-funding
https://www.biglotteryfund.org.uk/funding/funding-finde

 

Other ideas include:

Lottery operates as (the legal equivalent of) a non-profit organization.

Lottery operators earn a reasonable compensation and will not have any incentive for personal or monetary gain that could run in conflict with creating benefit for society as a whole.

Lottery operates with a primary purpose of creating social good, which serves as a guiding principle for all operating decisions.

Lottery distributes prize money over a greater number of smaller prizes.

Guidelines
Timeline
event
Aug. 2, 2019, midnight PDT
Won
event
Aug. 1, 2019, midnight PDT
Finalist Voting Ends
event
June 2, 2019, midnight PDT
Finalist Voting Begins
event
June 1, 2019, midnight PDT
Finalists Submission Deadline
event
Dec. 2, 2018, midnight PST
Finalists Announced and Prizes Awarded
event
Dec. 1, 2018, midnight PST
Voting Close
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Oct. 2, 2018, midnight PDT
Voting Open
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Oct. 1, 2018, midnight PDT
Submission Deadline
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Aug. 1, 2018, midnight PDT
Registration Closed
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Jan. 31, 2018, midnight PST
Crowdsale Ends
Nov. 20, 2017, 3:58 a.m. PST
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Nov. 1, 2017, midnight PDT
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Oct. 1, 2017, midnight PDT
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Oct. 7, 2016, midnight PDT
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Oct. 6, 2016, midnight PDT
Funding
April 11, 2015, 1:57 p.m. PDT
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