Dream Home
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Social lotteries such as Omaze are examined: psychology, gambling addiction, DSM-5 criteria and why the proportion of donations is smaller than advertised.
Dream homes, gambling and gambling addiction: the psychology of social lotteries, using Omaze as an example
Social lotteries promise the best of both worlds: a real chance to win a dream home and, at the same time, the satisfaction of supporting charitable causes. Platforms such as Omaze and the Dream Home Giveaway have quickly become a multimillion-pound market, combining classic gambling psychology with emotional cause marketing. A closer look at cognitive biases, parasocial bonds and the commodity aesthetics of the digital age reveals the psychological underpinnings and explains why the model works so reliably.
Social lotteries: An overview of regulated gambling in Germany
Social lotteries such as Omaze or the Traumhausverlosung are regulated in Germany as a distinct form of gambling. The Joint Gambling Authority of the German States (GGL) issues the relevant licences and stipulates that at least 30 per cent of net proceeds must be used for charitable purposes. Traditional social lotteries – such as Aktion Mensch or the Deutsche Fernsehlotterie – are, by contrast, run by charitable foundations and registered associations (e.V.), thereby enabling significantly higher donation rates.
What makes the new property lotteries special is the combination of exceptionally high-value prizes and the moral bonus of charity. Anyone taking part in a dream home prize draw isn’t simply buying a ticket for a game of chance – they are presenting themselves as someone who does good. This self-centred aspect is crucial from a marketing perspective: it lowers the psychological barrier and significantly reduces the player’s perceived risk.
How does Omaze’s business model work in practice?
Omaze operates via a multi-tiered corporate structure: the American parent company works through a local holding company, a non-profit gGmbH (DoGood gGmbH), and a commercial operating company. A service fee is deducted before the distribution to the charitable component – this significantly reduces the basis for calculating the mandatory 30 per cent clause under the GGL.
A €25 package (50 tickets) is split into a €7.50 service fee and a €17.50 game contribution. 30 per cent of €17.50 amounts to €5.25 for charitable purposes – this corresponds to 21 per cent of the original ticket price. The company states that around 20 per cent goes to charity, which is consistent with this calculation. A direct donation to the same beneficiary – such as the German Animal Welfare Association (Deutscher Tierschutzbund e. V.) – would go 100 per cent to the cause, with no intermediary fees.
How much of the ticket price actually goes to charitable causes?
The difference between the communicated donation message and the amount actually distributed is psychologically significant. Anyone who reads that ‘20 per cent goes to charitable causes’ triggers a moral response: buying a ticket is mentally recorded as a donation with a chance of winning – not as gambling. The player feels virtuous, and this makes repeat purchases considerably easier.
Traditional social lotteries, which are run by non-profit associations (e.V.), structurally distribute higher proportions because there is no commercial operating company acting as an intermediary. The fact that the GGL’s 30 per cent rule is applied to a calculation basis reduced by service fees is legally permissible, but hardly comprehensible to consumers without knowledge of the corporate structure. In scientific terms, this is referred to as a systemic opacity gap: what is marketed as transparency is structurally difficult to verify.
What cognitive biases have studies investigated in players?
Gambling research, including at the Institute for Therapy Research (IFT) in Munich and at universities in Hamburg and Bremen, has described key cognitive mechanisms that are also at work in social gambling. The availability heuristic is the most powerful of these: frequently published winner videos – a couple receiving the keys to a million-euro villa in a notary’s office – drastically increase the subjectively perceived probability of winning. The actual odds for Omaze campaigns are around 1 in 220,000 for a €25 prize package; for the dream home prize draw, they are around 1 in 440,000. What is easily accessible to the brain is assessed as ‘likely’.
Added to this is the illusion of control: the subscription model, whereby new tickets arrive each month, creates the feeling that one is actively working towards one’s own luck. The gambler’s fallacy reinforces this effect – the belief that the chances of winning increase with every additional ticket, even though the statistical odds remain constant. Research into pathological gambling disorder shows that, when combined, these mechanisms intensify gambling behaviour and encourage susceptible players to engage in problematic gambling.
Why does marketing featuring celebrities and influencers work so reliably?
Omaze invests heavily in collaborations with celebrities and social media influencers. Psychologically, this activates parasocial relationships: anyone who regularly sees someone in videos subconsciously treats them as an acquaintance – the implicit recommendation has a similar effect to a personal recommendation from one’s immediate social circle. Studies on parasocial attachment, including research at the University of Hamburg, show that these effects significantly increase the willingness to buy and reduce risk awareness.
At the same time, in long promotional videos, the mandatory gambling warnings are reduced to a minimum and moved to the end. Research findings show that brief or delayed warnings are scarcely noticed if intense emotional arousal has occurred beforehand. Buying lottery tickets is thus framed as a contribution to a positive, communal narrative – not as gambling in the conventional sense.
Is the concept of ‘donating through play’ clinically and psychologically problematic?
Wolfgang Fritz Haug’s concept of commodity aesthetics explains why the model works so efficiently: the lottery ticket as a product is actually worthless. Still, it derives its exchange value from the promise of two overlapping fantasies – the life-changing win and the donor's moral identity. This dual-substitute satisfaction is highly effective from an advertising perspective. Still, it remains a substitute: with odds of 1 in 220,000, the jackpot is statistically unattainable, and the proportion of proceeds going to charity is only a fraction of what a direct donation would achieve.
The lack of transparency regarding winning chances is also psychologically significant. Social lotteries do not disclose the specific odds in advance because the total number of tickets is only determined at the end of the campaign. The German Centre for Addiction Issues (DHV) and international gambling experts are therefore calling for a legal obligation to publish specific winning odds for each campaign. Rational risk assessment is structurally impossible for the player as long as this information is missing.
What are the key criteria for gambling disorder according to the DSM-5?
The DSM-5 defines gambling disorder as clinically significant, dysfunctional gambling behaviour meeting at least four of nine criteria – including the development of tolerance, loss of control, withdrawal symptoms and continued gambling despite negative consequences. Most participants in social lotteries do not meet these criteria. Nevertheless, the Consumer Advice Centre warns that online gambling, due to its low barrier to entry and constant availability, harbours a structural potential for addiction that differs only gradually from other forms of gambling.
A small proportion of the population – estimated by the IFT and the 2023 Gambling Survey to be around 0.3 to 0.6 per cent of adults – develops problematic gambling behaviour. From this perspective, the subscription models of social lotteries must be viewed critically: they normalise regular payments, make cancellation an active step and utilise behavioural economic insights to retain players. These are classic risk factors for the development of a pathological gambling disorder.
What risk factors for gambling disorders has scientific research identified?
Research has identified several consistent risk factors for pathological gambling behaviour. Mental health conditions – particularly depression, anxiety disorders and ADHD – correlate with increased gambling participation and accelerated development of the disorder. Gambling can act as a dysfunctional coping mechanism in this context: the temporary activation of the reward system through the anticipation of a win replaces the processing of the underlying stress. This characteristic has also been documented in other forms of behavioural addiction.
Further empirically substantiated risk factors include early gambling experiences, financial instability, social isolation and – with particularly robust evidence – the speed of play and the availability of gambling options. Institutions such as the IFT Munich, the Institute for Gambling and Society at the University of Bochum and the University Medical Centre Hamburg-Eppendorf are systematically investigating these correlations. In particular, the shift of gambling to digital platforms is currently considered an underestimated risk factor that is still inadequately captured in traditional survey instruments.
What does the current state of gambling research in Germany reveal?
The 2023 Gambling Survey, conducted by ISD Hamburg on behalf of the Federal Centre for Health Education (BZgK) and the German Centre for Addiction Issues (DHZ), provides, for the first time, separate data on social lotteries. According to the survey, social lotteries are the only gambling segment played more frequently by women than by men – a finding linked to the specific marketing strategy of these games: cause-related marketing appeals to values that are statistically more strongly activated in groups socialised as female.
Research at German universities emphasises the need for differentiated prevention. Not all gambling carries the same level of risk, and not all participation is pathological. Social lotteries with low stakes and a slow pace of play are considered a low-risk form – this changes as soon as subscription structures, opaque cost models and a lack of transparency regarding odds are introduced. This is where the line between harmless gambling behaviour and clinically relevant risk lies.
What concrete steps can those affected by betting, lotteries and gambling addiction take?
Anyone who notices that gambling is taking up an increasing amount of emotional or financial space should not interpret this as a personal failure. Gambling disorders are clinically recognised disorders with a neurobiological basis – the gateway via seemingly harmless social lotteries is well-documented in counselling practice. Outpatient counselling centres run by Caritas, Diakonie and local addiction support services offer free, low-threshold initial consultations that do not require a psychiatric diagnosis.
For relatives: Problematic gambling behaviour is usually concealed by those affected for a long time. Debts, unexplained expenditure and social withdrawal are early warning signs that should be taken seriously. The Federal Centre for Health Education (BZgK) provides evidence-based self-assessment tests at www.check-dein-spiel.de. According to current research, cognitive behavioural therapy combined with motivational interviewing has proven effective in treating gambling disorders – regardless of whether betting, traditional lotteries or social lotteries were the primary form of gambling.
Key points at a glance
· Social lotteries are regulated games of chance with a charitable component – not fundraising campaigns with the chance to win.
· Due to service fee structures, the actual proportion of donations is often significantly lower than the advertised figure (21% instead of the perceived 30%).
· Availability bias, the illusion of control and parasocial bonds created by influencer marketing are the key psychological drivers.
· A lack of transparency regarding odds of winning and subscription models increases structural risk.
· For the majority of people, the occasional purchase of a lottery ticket does not constitute pathological gambling behaviour – but for those who are susceptible, it can be a gateway.
· Those wishing to make a charitable donation will achieve a significantly greater impact per euro spent by donating directly.
· If there are signs of problematic gambling behaviour, free counselling and psychotherapeutic treatment are available.
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