In the recent medium post we pointed out that lottery fundamental concepts are subject to change in the face of blockchain technology. Not only would this result in better business, but mainly in a more trusting environment.
The digital age is entering second era in which machine learning and artificial intelligence is progressing more quickly than we can realize. The foundation technology for this second era is blockchain.
Henceforth, this technology has a huge potential to revolutionize this industry for players, operators as well as governments.
Let’s have look at what the main traits of state lotteries are and how the industry can evolve to step in the next digital age and overcome the old system.
THE ROLE OF GOVERMENTS — STUPIDITY TAX
The government is always the real winner when it comes to state lotteries, which is exactly why everyone should start to reconsider this “voluntary tax”.
Furthermore, nobody is aware how the lottery works behind the scene, hence, there is a very low trust and transparency involved.
The real purpose of the lottery is for states to generate more revenue. A 2017 CNN report showed that the government only paid out 63 percent of the money spent on the lottery in prizes per year. The rest, close to $34 billion, went to funding government-run education, social programs, and states’ general funds (as well as the cost of running the lottery, about $12 billion per year).
It’s almost certainly inefficient. Lottery operators spend a lot of money on marketing and administration of their lotteries in order to collect that money back in the lotteries and the governments like the whole circle, because it’s the only tax of the many taxes out there that they get people voluntarily pay. Folks on Wall Street call it the “stupidity tax”.
The result of this is that only a few happy ones win during a couple of years but the state is the winner every time, having its monopoly power.
UNCLEAR PRIZE DISTRIBUTION
It’s also becoming increasingly unclear how much lottery revenue is actually given back to the community. According to the ESPN, two-thirds of state lottery revenue goes into prizes, about 5% into administration, and the rest into state funding.
But there is no actual data to prove how much state funding comes about as a result of the lottery, in spite of many lottery commercials extolling the charitable worthiness. Nor is it made public whether the low-income households most likely to buy tickets are the people most likely to benefit from said state funding.
FREQUENT RULES CHANGES
There are many times when lottery changes in rules, which seem very promising in the beginning, turn out bad at the end when they only bring more funds for the government and less for people.
A recent Powerball rule change is the key factor in the increasingly high jackpots, bosses adding ten new balls into the final drawings. The addition of more balls means unimaginably tougher odds to beat, the recurrence of no winners, and an increase in small prizes being won. But don’t get too excited, that means payouts of four to seven dollars each.
Due to all these issues mentioned above, the probability of winnings is very low as you can see below and the government lotteries are definitely more the voluntary tax of all the desperate people.
STATE LOTTERY LAWS THREATEN ANONYMITY
While many people may have dreamed of winning the lottery and making the front page news, for most of them, widespread knowledge of their win would be a nightmare.
The winner of a $560 million Powerball lottery made headlines when she did the unthinkable: refused to collect her winnings until she could accept them anonymously.
The problem is the state lotto’s rules require public identification of winners. Though the state’s aim is to prevent fraud and also use the winnings for further marketing purposes, but there have been enough notable cases of theft, harassment, and even murder.
LET’S PLAY FOR FUN AND REWARDS AGAIN
Studies have proven that the lottery is often played for the wrong reasons. Not for fun, or the “it’s unlikely, but why not?” opportunism of winning, but played by the unemployed, the recently laid-off or those in desperate need of money.
We at LOTEO believe that the old state lottery models can be changed using blockchain technology with the following keypoints of the LOTEO platform:
· Overall transparency and trust of the prize distribution — 75 % for the players
· The lottery rules once set up using smart contracts difficult to change
· Audited Random Number Generator and Smart Contracts
· Much Higher winning prize probability — there is a winner in every draw
· Anonymity of the winner but with trackable blockchain
· Generous affiliate and space program
· All the profit shares are instantly redistributed to the LOTES holder after every draw — more read here
· Governance model for investors
· No hidden fees
Players have grown up aware of the adage “the house always wins” and have fair reason to avoid lotteries where the odds of winning haven’t been made clear.
The LOTEO project is making one small but extremely important step closer to bring back the power to people. Now it is your turn to be the government.
Do not forget to stay tuned for the next articles to be published since the launch is coming very soon!
We hope you are going to enjoy our lottery.
For more questions do not hesitate to contact us as mentioned below or read the official whitepaper.
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