Chances may increase but they are still random. Despite your claims otherwise it is still a "lottery" because dumb luck is the only thing that determines if you get something good, junk, or nothing at all.
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Lots of loot systems exist. Destiny has an MMO model that is a bit more open. I think of it along the lines of a World of Warcraft type system. Trust me I have loads of Ideas for improvement but at its core they are very similar systems.