> A city boy, Kenny, moved to the country and bought a donkey from an old farmer for $100. The farmer agreed to deliver the donkey the next day.
> The next day the farmer drove up and said: “Sorry son, but I have some bad news. The donkey died.”
> Kenny replied, “Well then, just give me my money back.”
> The farmer said, “Can’t do that. I went and spent it already.”
> Kenny said, “OK, then just unload the donkey.”
> The farmer asked, “What ya gonna do with him?”
> Kenny: “I’m going to raffle him off.”
> Farmer: “You can’t raffle off a dead donkey!”
> Kenny: “Sure I can. Watch me. I just won’t tell anybody he is dead.”
> A month later the farmer met up with Kenny and asked, “What happened with that dead donkey?”
> Kenny: “I raffled him off. I sold 500 tickets at $2 a piece and made a profit of $998.00.”
> Farmer: “Didn’t anyone complain?”
> Kenny: “Just the guy who won. So I gave him his $2 back.”
> Kenny grew up and eventually became the chairman of [company you want to mock]
Typically a lottery runs in one of two ways: with pre-decided winning tickets, or a number that's drawn after the tickets are distributed to decide which ticket (if any) is the winner. In this way, the odds of winning are mostly independent of the number of tickets sold. The prize is usually money.
A raffle works by selling tickets, and then picking exactly one of those tickets to be the winner, making the odds directly dependent on the number of tickets sold. The prize is usually a physical object, and not money (though there are exceptions, e.g., a 50/50 raffle).
Often raffles are sold significantly below expected value. A popular raffle to support a charity is called a 50/50 raffle. This is where the winner of the raffle receives 50% of $YN, and the charity receives the other 50%. Buying a ticket isn't a good financial decision, but it's for a charity, and you can end up winning, so they are popular.
The technical difference, vs a lottery, is that a raffle always has exactly one winner, drawn from all of the entries. In most lotteries, it’s possible for no one to win or several people to share the prize.
Raffle also implies that the event is a smaller, one-off event, usually with non-cash prizes and often for charity. A church might have a raffle to raise money for a new roof, using prizes donated by the parishioners. This is in contrast to lotteries, which are usually run by the government, feature cash prizes, and occur on a fixed schedule.
It's not really about "disposing" the donkey it is about giving other people the chance to win the donkey...that is dead
You can say Robinhood. Their agreement says that they can't do anything to imply that it was incorrect, like threatening to sue people for talking about what got them sanctioned.
Payment for order flow is not only legal, but good for retail investors. It, and practices like it, are the only reason joe schmoes can go buy 2 shares of TSLA in their robinhood account (actual traders deal in round lots - 100 shares. Price levels featuring less than 100 shares aren't even protected price levels!).
There's also the technicality of the wholesalers technically providing a very small (<=1 cent) price improvement, but retail investors don't care about that.
I really object to the frankly callous and irresponsible bandying about of financial stuff like this. It damages trust in what is potentially one of the best-regulated and most efficient systems in the world.
I also want to note that, assuming you're referring to Citadel's 700k fine, 1) the SEC's description of what happened is too vague to really infer what's going on, 2) my guess based on their description is that they essentially had a bug that technically constituted trading ahead of a small, small % of client orders (though it does not seem like it was actually getting an advantage by doing so, since it was a bug) and 3) this is all corroborated by it being only a 700k USD fine, which is comically small for a fine from both the SEC and for a firm as large as Citadel. This was the lightest of slaps on the wrist from a regulator who will absolutely destroy firms with fines when they have hard evidence.
If anyone wants to look deeper into this, Matt Levine has written extensively at this point on the subject of the payment-for-order-flow boogieman.
If you have a 10% defect rate for unavoidable causes, that sucks. If you have a 10% defect rate because you chose to cut all corners and cheap out on every aspect of your manufacturing and testing, that sucks but it's legal. However, if you have a 5% defect rate and intentionally choose to mix in extra 5% of known defective units - that's fraud.
I hope you're not under the impression that this is another SV "innovation," because it's been a saying since at least the 1600's.
What we're seeing is a widespread use of "fractional fraud".
Transactions and business lines that are 1%-5% fraudulent are unlikely to be challenged, but have a huge effect on profitability.
The best example I've seen is Bunnie Huang's deep dive on counterfeit SD cards [1]. Margins on SD cards are like 1%, so blending in defective cards at a 1% rate can double your profit. Another example is retail trade payment for order flow. A major broker-dealer was just sanctioned for front-running its clients.
As long as your defect ("mistake") rate stays below your customer's response threshold, you can keep doing it. It is impossible to overstate how important social norms are for policing this kind of misconduct.
[1] https://nostarch.com/hardwarehackerpaperback