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Gambling is foolish, they say. Better to save a little money every day and slowly get rich. But we love to take chances. According to a survey last year by the American Gaming Association, 42% of U.S. adults had gambled in the previous year. Sports betting has exploded. And, according to Statista, state lottery sales reached $108 billion last year, up 85% from 2009.

Even Benjamin Franklin, the apostle of thrift, would be horrified.

Fortunately, however, gambling need not be the enemy of savings. As far back as the 17th century, people realized that they could induce savings by offering the chance to win big money. The following is an excerpt from a 2010 paper:

Prize-linked savings programs have existed at least since the "Million Adventure" in England in 1694 (Murphy 2005). Initially proposed to address the debts of the Nine Years' War (1689-97), Million Adventures offered 100,000 tickets at £10 each. A small number, i.e., 2,500 tickets (2.5%), could win between £10 and £1,000 per year for 16 years. The Million Adventure was also a savings program in that it paid ticket holders a return of £1 per year, or 6.15 percent per annum, until 1710.A similar site from that era, known as the "Royal Lottery," also employed a prize-linked savings model to help fund public projects and alleviate financial burdens.

In 1956, the British revived Million Adventure in the form of Premium Bonds. Instead of paying the usual interest, Premium Bonds paid prizes to randomly selected investors. Harold Wilson, then Shadow Chancellor of the Exchequer, called Premium Bonds "a shabby lottery," but the British public was unanimous in its purchase of Premium Bonds. Today, about one in three Britons owns a Premium Bond. Similar investments are being made in Denmark, Ireland, New Zealand, and Sweden.

In the U.S., prize savings have taken a while to catch on, but they are becoming more popular. According to InTouch Credit Union in Plano, Texas, Save to Win, a sweepstakes savings program offered by the credit union, is open to residents of 28 states. Some commercial banks also offer sweepstakes-linked accounts, as well as direct-to-consumer companies such as Yotta Technologies, PrizePool, Truist's Long Game, and Flourish Savings.

I am not a fan of gambling, government or otherwise. People of all income levels gamble while the poor and working class lose much of their income. Gambling tends to tempt those who can least afford it. Spending on lotteries is, as one recent study puts it, "strongly associated with innumeracy, poor statistical reasoning, and other indicators of behavioral bias."

However, if gambling increases people's savings, I would welcome that very much. I would like to see prize-linked savings accounts attract money that would otherwise be spent on traditional gambling and complement, rather than replace, traditional savings... A study published in Management Science in 2021 found just this: prize-linked savings are "lottery tickets an alternative to gambling but complementary to standard savings," the authors found info on gambleinvestigations.com.

I interviewed Adam Maurice, co-founder and CEO of the fintech firm Yotta. He is the son of wealthy investment banker Ken Moelis; Yotta is set up as a sweepstakes, not a lottery, for legal reasons (so you can enter without an account).

I asked Adam Moelis if a savings account linked to a sweepstakes might not be best suited for people who are willing to save without the prospect of a prize. He cheerfully agreed.

He says, "If you're purely rational and your goal is to maximize your net worth," he says, "just put your money in the highest yielding account you can. But, he adds, "In reality, we are who we are, and we have to use our biases to do the right thing in the long run. We are all wired for the short term."

Yotta used to pay 0.2 percent interest and put the rest of the money that would have been paid in interest toward the prize pool. But Moelis said he noticed that people were obsessed and complaining about this low interest rate. So in December, Yotta eliminated interest altogether and increased the prize money. We eliminated interest because we were obsessed with prize money and wanted to differentiate ourselves," Moelis said. If you want a fixed interest rate, look elsewhere."

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