AN ACT TO AMEND TITLES 5 AND 11 OF THE DELAWARE CODE RELATING TO PRIZE-LINKED SAVINGS PROGRAM.

This bill authorizes the use of “prize-linked” savings accounts in the State of Delaware. These accounts have been used in a number of countries and several U.S. states to promote savings, especially among persons with low-income and first-time savers. A deposit into the program makes the entrant eligible for a prize. The principal in the account remains untouched. The first large-scale program of this nature in the U.S. was launched in Michigan about 6 years ago, and the program has subsequently expanded to Nebraska, North Carolina and Washington. At the end of 2014, federal legislation was passed allowing federally charted banks and credit unions to offer this type of savings account in any state that does not prohibit it. This bill explicitly authorizes such programs in Delaware and clarifies that such programs do not constitute prohibited gambling or lottery practices.