Get Rich Quick: The American Lottery

Summary

Throughline: Get Rich Quick: The American Lottery

Host: Rund Abdelfatah and Ramtin Arablouei
Producer: Ian Kass
Release Date: April 3, 2025

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Introduction: The Evolution of Gambling in America

In the episode titled "Get Rich Quick: The American Lottery," NPR's Throughline delves deep into the intricate history of gambling in the United States, tracing its transformation from illicit activities to a mainstream, state-run enterprise. Hosts Rund Abdelfatah and Ramtin Arablouei, with producer Ian Kass, explore how state lotteries became a cornerstone of American culture, shaping societal behaviors and economic practices.

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The Complicated History of Gambling in the U.S.

Timestamp: [01:03] Rund Abdelfatah:
"But gambling's got a complicated history in the US. We allow some forms of it, ban others. We allow it in some places, but not everywhere. It's like we can't seem to make up our minds."

The episode begins by highlighting the inconsistent legal status of gambling across different states and time periods. This inconsistency sets the stage for understanding how lotteries emerged as a significant legalized form of gambling amidst a backdrop of prohibition and organized crime.

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State Lotteries: From Shadows to Mainstream

Producer Ian Kass:
"Today, there are only five states in the US that don't have a state lottery. Everyone else is all in on it." [09:08]

Producer Ian Kass introduces the astonishing statistic that by the early 2020s, only five U.S. states lacked state lotteries. This rapid proliferation underscores the lottery's success in embedding itself into American life, surpassing traditional gambling forms like casinos and sports betting.

Kevin Weber:
"The world we live in now was made possible by state lotteries. It was the lotteries that did the slow cultural work of normalizing gambling decade by decade and destigmatizing it." [09:29]

Kevin Weber explains how state lotteries played a pivotal role in shifting public perception, turning gambling from a taboo into an accepted form of entertainment and revenue generation.

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The Birth of the Modern Lottery: New Hampshire's Experiment

Jonathan Cohen, Author of For a Dollar and a State Lotteries in Modern America:
"The New Hampshire lottery that started in 1964 was rooted in horse racing, but it was unrecognizable to a modern lottery game." [12:09]

The episode recounts the inception of the modern lottery in New Hampshire in 1964. Designed initially to circumvent strict gambling laws, this lottery was a convoluted hybrid involving horse racing, which ultimately failed to captivate the public.

Kevin Weber:
"The New Hampshire lottery was not a great success. So the next two lottery states, New York and New Jersey, started to innovate, bringing the game closer to something we would recognize with regular drawings and no horses involved." [13:33]

Following New Hampshire's lackluster results, other states like New York and New Jersey revamped the lottery, making it more appealing and straightforward for participants.

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John Koza and the Innovation of Scratch Tickets

John Koza, Computer Scientist and Lottery Innovator:
"Nobody had seen a ticket like this before in a State Lottery." [42:17]

John Koza emerges as a central figure in revolutionizing state lotteries. After collaborating with a game company and facing bankruptcy, Koza co-founds Scientific Games and pioneers the concept of the scratch ticket—an instant lottery game that offers immediate gratification compared to traditional weekly drawings.

Kevin Weber:
"The genius of an instant ticket was that it offered something no illegal operation could. And it did that by playing to the state's advantage. Technology." [35:23]

Koza's innovation addressed inherent flaws in previous lottery systems by introducing secure, tamper-proof tickets that significantly reduced the potential for fraud, thereby enhancing public trust.

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The Launch and Impact of Scratch Tickets

Geraldine Stewart, Early Scratch Ticket Winner:
"I was lucky." [42:37]

The first scratch ticket was introduced in Massachusetts on May 29, 1974. Early adopters quickly experienced the thrill of instant wins, exemplified by stories like Geraldine Stewart's $1,000 prize. The immediate success of scratch tickets led to widespread adoption, with states nationwide following suit.

Kevin Weber:
"By 1974, people walked into convenience stores and gas stations around the state and saw that ticket. It had to work, or there would never have been an instant lottery in any state for decades." [42:52]

The immediate popularity of scratch tickets transformed them into a staple in retail environments, driving substantial revenue for state lotteries.

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Societal and Economic Ramifications

John Koza:
"We knew we hit the world by the tail." [46:33]

The introduction of scratch tickets not only changed the landscape of gambling but also had profound economic implications. Americans began spending billions annually on lottery tickets, with scratch tickets alone accounting for a significant portion. This shift had ripple effects on consumer behavior, retail strategies, and state economies reliant on lottery revenue.

Kevin Weber:
"Today, Americans spend over $100 billion a year on lottery tickets. Almost two thirds of that total is spent just on scratch tickets." [47:11]

The episode highlights how scratch tickets became the "bread and butter" of state lotteries, outpacing other lottery forms like Powerball in terms of daily sales and widespread participation.

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Personal Stories and Cultural Integration

Geraldine Stewart:
"My son never bought a scratch ticket in his life. And he's 50, and he decided a day ago he had some extra money, so he bought a ticket. He won $500 on that one ticket, his first scratch ticket, and he won $500." [46:35]

Through personal anecdotes, the episode illustrates the deep cultural integration of scratch tickets into everyday life, from family traditions to spontaneous individual participation.

Alan Raymond:
"People want scratch tickets. Absolutely. You want to win on the spot." [48:39]

Scratch tickets cater to the human desire for immediate rewards, a psychological aspect that significantly contributes to their enduring popularity.

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Conclusion: The Lasting Legacy of the Lottery

Throughline's episode "Get Rich Quick: The American Lottery" provides a comprehensive examination of how state lotteries, particularly through the innovation of scratch tickets, have become a pervasive and influential part of American society. By blending historical analysis with personal stories and expert insights, the episode underscores the complex interplay between gambling, technology, and cultural acceptance that has shaped modern lotteries.

John Koza:
"Absolutely." [45:41]

Kevin Weber:
"We knew we hit the world by the tail." [46:33]

The episode concludes by affirming the profound and lasting impact of scratch tickets, cementing their place in the American zeitgeist as a ubiquitous and beloved form of entertainment.

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Notable Quotes:

• John Koza [36:37]:
  "We got to talking and it turned out that they were trying to produce a kind of game where every ticket could be a winner."

• Kevin Weber [31:11]:
  "It shaped everybody's conception of organized crime."

• Geraldine Stewart [42:37]:
  "I was lucky."

---

This detailed exploration not only charts the historical trajectory of American lotteries but also captures the societal nuances and personal experiences that have propelled lotteries to their current status as a staple of American life.

Transcript

[Audrey Evans]

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[Ian Kass]

Today. There are numerous ways to gamble.

[Rund Abdelfatah]

And if cards aren't your thing, there's slots or roulette for you.

[Ian Kass]

Or if you're hours away from a casino, no problem, you can just hop.

[Kevin Weber]

On your phone, tap into BETMGM Casino, and you're entering a huge library full of exclusive games.

[Rund Abdelfatah]

But maybe you're not really into gambling games. Well, then you have sports betting.

[Ian Kass]

New customers bet $5 to get 150 in bonus bets if you win. FanDuel, America's number one sports sport. Whether you're at a poker table or at home watching a basketball game. Legal gambling has never been easier.

[Rund Abdelfatah]

But gambling's got a complicated history in.

[Ian Kass]

The US we allow some forms of it, ban others. We allow it in some places, but not everywhere. It's like we can't seem to make up our minds.

[Rund Abdelfatah]

So how did gambling go from an illicit vice to a ubiquitous industry? What set that in motion? Meet Ian Kass, a producer from GBH in Boston, a guy who recently got obsessed with one of the biggest forms of legalized gambling, state lotteries.

[Kevin Weber]

I think they help explain so much about the world we live in now. Like, if you went to sleep in 1960 and you woke up today, like, your mind would be blown.

[Ian Kass]

Mind blown. Sign us up. I think the central argument you're making here is that lotteries were a mechanism through which gambling came out of the shadows and into the mainstream. And I've always wondered since I was a kid, like, isn't it just legal gambling? Because, you know, I see, I saw people, adults all getting their little, like, scratch and win. And I never understood that, but it seems like you're getting at the core of that in the series.

[Kevin Weber]

Yeah, I mean, in the 1970s, you used to have mafia run lottery games, and they were very similar. You know, they had, you'd pick your numbers, you'd pay your 25 cents or your dollar, and the state truly just moved in and replicated the games that the Mafia was operating right down to the odds, the number of digits, the payout rate, everything about it, it was just a carbon copy and it was no secret. So basically, the legal gambling regime that we have that grew out of the state lotteries is just a total ripoff of the mafia around gambling. And then of course, it starts to innovate and Experiment on top of that.

[Rund Abdelfatah]

How did you first encounter the story? What was the thing that got you hooked on it?

[Kevin Weber]

So the beginning of this story for me was I was producing another series that we did at GBH called the Big Dig that was all about infrastructure. And so I was interviewing a lot of state officials and one of the questions I will sometimes ask people is like, hey, any other interesting stories that I should be interested in? So I was interviewing this guy and he was like, well, if you want a good state politics story, you, you should look at gambling. And when he said that, I think, and maybe this is somewhat naive, but there was, even though I grew up with the lottery and everything, I don't think I'd really thought of gambling as a political story or as like a government story. It hadn't really clicked in an adult mind conscious way that the lottery is an official agency of state government whose official task it is to sell gambling products to the public. And so that was the starting point for me. At that point I just did some very cursory research of like, oh, which states have lotteries and how much money do they actually make? And I very quickly encountered this statistic that if you kind of stack up all the lottery states, there is one clear outlier way out ahead of the pack where people spend way more money on lottery tickets than any other state. And it is the state where I live. And I never knew that.

[Ian Kass]

Today, obviously, sports gambling is everywhere. It's to the point where it's, it's unavoidable. I'm watching a game with my 9 year old son and every commercial, at least every break has at least one DraftKings and you have the most famous people in the world, trusted voices selling you and your child gambling. Why do you think lotteries were a turning point? What was it about lotteries in the history of gambling that kind of got us from people running numbers illegally to, you know, sports gambling between there and there? Why was the lottery such a turning point in that history?

[Kevin Weber]

So I, I interviewed a longtime Massachusetts congressman named Barney Frank, who listeners may know is he's famous for a lot of things, financial reform, all kinds of stuff. Barney Frank has always been a big proponent of legal gambling. And the way he described it to me, the legacy of lotteries is that when the lottery started, there was so much cultural opposition to legal gambling. And there was these kind of like doomsday scenarios of if you make this legal, you're gonna see foreclosures, you're gonna see bankruptcy, you're gonna see broken homes like truly, society will come unra if people can freely bet their money anytime out in broad daylight, you'll have mafia gangsters infiltrating state government, taking over the games, rigging the drawings. That was the level of fear around the idea of state run gambling. And what Barney Frank told me is that the lotteries came out. And I don't want to say that there are no negative social effects or no costs to legalize gambling, but it wasn't the doomsday scenario. Like the sky didn't fall and also at the same time sort of whet the state's appetite. Maybe we could put a casino down by the waterfront or maybe we turn on the sports betting thing and we take a cut of that. So it sets all those other things in motion.

[Rund Abdelfatah]

It opens the can of worms for sure. Yeah. And we're living in that.

[Kevin Weber]

We're living in the can of worms.

[Rund Abdelfatah]

Yeah.

[Kevin Weber]

It's really, it's wild and it's totally inescapable at this point.

[Rund Abdelfatah]

I'm ramt, I'm rund and you're listening to Throughline from npr. What you're about to hear is an epic story that has it all. From Sputnik to mob members like Fat Vinny the stool pigeon to using medical equipment to expose the flaws in a lottery game, it's all tied up in this idea of getting rich quick.

[Ian Kass]

And the thing that connects, connects all those dots is something I've never really thought about, but sits behind almost every convenience store counter today.

[Rund Abdelfatah]

Coming up, the scratch ticket.

[Kevin Weber]

Hi, my name is Kevin Weber from Kansas City, Kansas, and you are listening to Throughline by npr. As I put stripes down after paving the road here on Ridgeview and 119th in Olathe. Good job, pays well, but man vehicle infrastructure. Enjoy.

[Nicole]

This message comes from Schwab at Schwab. How you invest is your choice, not theirs. That's why when it comes to managing your wealth, Schwab gives you more choices. You can invest and trade on your own. Plus get advice and more comprehensive wealth solutions to help meet your unique needs. With award winning service, low costs and transparent advice, you can manage your wealth your way at Schwab. Visit schwab.com to learn more.

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This message comes from Progressive Insurance. Progressive makes it easy to see if you could save when you bundle your home and auto policies. Try [e-mail] Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states. This message comes from BetterHelp therapy can be expensive, but at Betterhelp they believe therapy should feel accessible, not like a luxury, which is why they offer quality care at a price that makes sense and can help you with anything from anxiety to everyday stress. Your mental health is worth it, and now it's within reach. Visit betterhelp.com NPR to get 10% off your first month. That's betterhelp.com NPR Part 1America's Favorite Pastime.

[Ian Kass]

Today, there are only five states in the US that don't have a state lottery. Everyone else is all in on it. But before state lotteries became the big behemoth that they are today, there was one little game that started it all.

[Rund Abdelfatah]

Here's producer Ian Koss with the story.

[Kevin Weber]

So the U.S. census Bureau collects lottery sales figures for every state. And the key number to look at, really the metric of any lottery's success is sales per capita, usually per adult. When I first came across these figures, I could see right away that there's a spread. You know, there are some stragglers on the low end, like Wyoming, North Dakota, where the average adult only spends around $50 a year on the lottery. Then there are a lot of states in the middle, California, Texas, Illinois, all in about the $300 range, which feels like about what I would have guessed if you asked me to. But when you get to the top of the list, things get weird. New York, Michigan, Georgia, they're all respectable at around five or six hundred dollars per adult. And then there is the loan outlier, way off the charts at $1,037. That's $1,037 of lottery tickets per adult sold every year in the state of Massachusetts. When I first saw that number, I had a hard time believing it. I had to check it in a few different places, make sure I was understanding what exactly was being measured. It just seemed high and also unexpected. The world we live in now was made possible by state lotteries. It was the lotteries that did the slow cultural work of normalizing gambling decade by decade and destigmatizing it. To some extent, they made all this possible. But obviously that cultural work remains somehow incomplete. We can't fully accept what we so clearly want, and no gambling enterprise captures that strange tension quite like the one that brings in $1,037 every year for every adult in the state of Massachusetts.

[Ian Kass]

Today, you can pretty much buy a lottery ticket anywhere. Gas station, liquor stores, supermarket. There's even whole vending machines dedicated to it. But not that long ago, legally paying a few bucks for the possibility of winning hundreds or thousands in return was a foreign idea.

[Kevin Weber]

The first modern lottery in America started in New Hampshire in 1964.

[Jonathan Cohen]

Do you want me to go back into like, New Hampshire and how preposterous the game was or.

[Kevin Weber]

Sure. Jonathan Cohen is the author of For a Dollar and a State Lotteries in Modern America.

[Jonathan Cohen]

Yeah, I mean, so the New Hampshire lottery that started in 1964 was rooted in horse racing, but it was unrecognizable to a modern lottery game.

[Kevin Weber]

At that time, really, the only place outside of Vegas that you could legally gamble was at the racetrack. And there were all kinds of laws limiting or prohibiting other kinds of gambling. So to get around that, New Hampshire, being the first out of the gate, attempted to create a lottery based on horse racing. The result was a strange hybrid, multi step game.

[Jonathan Cohen]

And you had to put your name in a little slot and then you pull a lever down on a box and it cuts your ticket in half. And then they draw a ticket, but the ticket isn't actually who wins the lottery. It's like to associate a ticket with a horse and then you have like a separate drawing for what horse race we're going to do. And then it's like, oh, Ian Coss, like, you have horse number seven and number seven won that race. So now, like, you win the lottery. Congratulations.

[Kevin Weber]

Tickets went on sale in March. The drawing to select the final contestants and their horses was in July, and the horse race itself was in September. So six months from purchase to payoff.

[Jonathan Cohen]

All this to say the games were slow, they were expensive, the prizes were small, and they were hard to understand.

[Kevin Weber]

The New Hampshire lottery was not a great success. So the next two lottery states, New York and New Jersey, started to innovate, bringing the game closer to something we would recognize with regular drawings and no horses involved.

[Jonathan Cohen]

Which sort of starts this trend of just like, more faster with bigger prizes.

[Kevin Weber]

But still, a weekly drawing is not the same thing as instant gratification. And it would take a few more years to get there. It's hard for me to imagine a world without scratch tickets. Americans spend more on scratch tickets than we do on pizza, more than we do on all Coca Cola products. Yet the scratch ticket as a consumer item has only existed for 50 years. Not so long ago, the very idea of an instant lottery was odd. Scary even. We're talking about huge sums of money at stake, all bound up in flimsy pieces of paper sitting on the shelf of a convenience store. What if the tickets could be copied? What if. Or rigged? What if they could be hacked? The Leap to instant was perilous and almost didn't happen at all. In fact, the creation of the first scratch off lottery ticket unfolds something like a Rube Goldberg machine. A long chain of events, each of which had to happen just so.

[Alan Raymond]

Today, a new moon is in the sky. A 23 inch metal sphere placed in orbit by a Russian rocket.

[Kevin Weber]

We'll begin that chain in October of 1957 with a 10th grade student in a suburb of Detroit named John Koza. Do you remember when Sputnik launched? Like, did you hear it on the news?

[John Koza]

Oh, absolutely. Everybody was listening to it.

[Alan Raymond]

You are hearing the actual signals transmitted by the Earth circling satellite. One of the great scientific feats of the age.

[Kevin Weber]

You could hear those little beep, beep.

[John Koza]

Beep, beep, beep, beep, the beeps, yeah.

[Kevin Weber]

And so was that part of the inspiration for you? Was it almost like a patriotic duty to study science and computers and be at the frontier of knowledge?

[John Koza]

Well, this was in the middle of the Cold War and everybody from the government to universities to business got interested in promoting science.

[Kevin Weber]

Coase's high school started bringing in guests to lecture on different technical fields. And one of those lectures was about the very young field of computer science. Now, in 1957, a cutting edge computer weighed upwards of 750 pounds. It was not something you would have at home, but Koza was interested, so he decided to build his own using.

[John Koza]

Surplus parts from jukeboxes and pinball machines.

[Kevin Weber]

It was a very simple computer that did a single task.

[John Koza]

It was a computer that calculated the day of the week for the date, which of course is a fairly simple calculation. But at the time, this was all wired up with relays and rotary switches and so forth.

[Kevin Weber]

Zeke, you know, July 4, 1776. What's the day of the week?

[John Koza]

Well, I don't know, but you could answer that question.

[Kevin Weber]

Ten years later, John Koza was, according to him, one of the first people in the world to hold an undergraduate degree in computer science, and also one of the first to pursue a PhD in the subject.

[John Koza]

I think I might have been the 12th or 13th in the country.

[Kevin Weber]

And at this point, a second and largely unrelated interest begins to alter his course in life politics.

[John Koza]

When I was a graduate student at University of Michigan in the 60s, I had published a board game involving the Electoral College.

[Kevin Weber]

Kozo was deeply fascinated by how we select our president, and at the time, a lot of other people were too. His board game about the Electoral College hit the shelves just before the 1968 election, which, remember, was a truly Chaotic election cycle. Lyndon Johnson dropped out. Bobby Kennedy was assassinated. George Wallace was running as a serious third party candidate.

[John Koza]

So it was quite an unusual election. Yeah, and there was a lot of attention on the Electoral College, on the.

[Alan Raymond]

All important Electoral College board and those all important electoral votes that gives.

[Kevin Weber]

With all that news coverage, Koza thought that a game about the arcane functioning of US elections might just break through. It was a flop in any case.

[John Koza]

An executive of this game company in Chicago, this was a company that made supermarket and gas station giveaway games, read an article about this game that I had produced and he thought it might be relevant to his company's business.

[Kevin Weber]

The executive invited Koza to Chicago to meet and Cosa agreed.

[John Koza]

They were looking for somebody who knew something about probability and combinatorics and finite mathematics, which, as it happened, was something I was very much involved in as a student. Now, mind you, that had nothing to do with the game involving the Electoral College, but was just a fortuitous case. They reached out and they found exactly the right person.

[Kevin Weber]

You can think of John Koza as a serial problem solver. In fact, the first line of his Wikipedia page is not even about scratch tickets. It's about the use of genetic programming for the optimization of complex problems, whatever that is. There's also a paragraph in there about how he has spent decades, decades, leading a campaign to ditch the Electoral College and instead elect presidents by popular vote. He's still working on that problem. But the point is, when COSA sees something that's not working smoothly, he gets in there, whatever the problem is. That's a powerful kind of mind. And this game company had a problem for Cosa. Supermarket games were popular in the 1960s. Stores would give them out for free as a little treat for customers. And the prizes were fairly small, sometimes less than one penny. But these games did already use a kind of rub off film. They were, in effect, proto scratch tickets.

[John Koza]

And we got to talking and it turned out that they were trying to produce a kind of game where every ticket could be a winner.

[Kevin Weber]

The way this particular game worked is there were 10 scratch off spots on the ticket, each of which revealed a playing card. Ace, king, queen, jack. Players were allowed to scratch off only three spots, and if they got a three of a kind, then they won a small prize. The game company already had the basic technology for printing these tickets. Where they needed help was figuring out what to print on them. So while still chipping away at his PhD, Kozo worked with this game company to develop a system for generating and printing up to 500,000 different ticket combinations, each of which had the potential to win, had a three of a kind. In the 1960s. That took some doing, but with the stakes fairly low, the security around these games was also fairly low.

[John Koza]

Probably in about half the games we ran, there would be a sort of a little run of tickets in a little town, and you'd realize that somebody in that town figured out some weakness in the game that we had missed.

[Kevin Weber]

For example, a player might figure out a way to actually see what was printed underneath that scratch off film and know where the matching playing cards were.

[John Koza]

And of course we would fix it for the next game. So we never had a big problem, but it was a knife edge process.

[Kevin Weber]

I don't know if you were thinking about this at the time, but it was giving you a chance to like beta test and experiment with this idea of scratch off tickets. And you sort of like worked out all the right.

[John Koza]

So the biggest single game we ran was the one for Shell Oil in the United States with 150 million tickets. And we had no problems at all with that game. We had perfected a system that could produce a very, very secure ticket, unpredictable.

[Kevin Weber]

And unhackable, a perfect game of chance. And just when it seemed like they had it all figured out, this game company he was working for, J and H, went bankrupt in December of 1972.

[John Koza]

COZA was cut loose, which coincidentally was exactly the month when I graduated, got my PhD.

[Kevin Weber]

So now you're a newly minted PhD, unemployed, with years of experience in the nascent instant ticket business. What do you do with all that?

[John Koza]

Well, again, a lucky coincidence, in the last year of J&H's existence, we actually made some sales calls on state lotteries, trying to see if they would like to run a game like this.

[Kevin Weber]

The idea was to take this ticket design that COSA had perfected in the form of a fun promotional gimmick and bring it into the big leagues of actual gambling. Instead of fractions of pennies, the ticket would offer up thousands of dollars. That is, if they could find a state willing to try it. In 1972, there were just seven states operating lotteries. And it turns out none of them were interested in a scratch ticket. It's hard to imagine passing on that pitch now, but you have to understand that these early lotteries were fragile and extremely conservative agencies. Gambling at the time was largely associated with the underworld, the mob.

[Alan Raymond]

Mike, you don't come to Las Vegas and talk to a man like Mo Green like that.

[Kevin Weber]

In 1972, just as Koza was first pitching his idea for a scratch ticket. The Godfather was the number one movie in America. It showed the extortion and murder lurking beneath the glitz of Vegas, the almost magnetic attraction between gambling and crime.

[Alan Raymond]

Don't ever take sides with anyone against the family again.

[Kevin Weber]

This was a shadowy business the state was wading into, and any whiff of irregularity, a fixed drawing, a forged ticket, would shatter the public's trust again. Jonathan Cohen they were so concerned about.

[Jonathan Cohen]

Organized crime and this imprimatur of legitimacy that they didn't get like people who designed games for a living to run the lotteries. They got like FBI agents.

[Kevin Weber]

In fact, the directors of the first three state lotteries were all former FBI.

[Jonathan Cohen]

Men to assure the public that the games were fair even if they were designed poorly.

[Kevin Weber]

That was the focus. Security, integrity, not innovation, and certainly not combinatorial mathematics. But in the 1970s, the focus would start to change because just as the specter of organized crime forced those early lotteries to be cautious, it soon would force them to be aggressive and competitive. One state in particular would lead that charge, and John Koza, unemployed and looking for an opening, would join them.

[Rund Abdelfatah]

Coming up, how a small, super liberal, college filled and once puritanical state somehow created the gold standard of American lotteries.

[Kevin Weber]

Hi, this is Nicole calling from Boston, Mass.

[Geraldine Stewart]

You're listening to Throughline.

[Kevin Weber]

I love listening to this show.

[Geraldine Stewart]

There's always something that I learn, even.

[Kevin Weber]

On topics that I think I already.

[Rund Abdelfatah]

Know a lot about.

[Audrey Evans]

This message comes from Progressive Insurance. Do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy to see if you could save when you bundle your home and auto policies. Try [e-mail], progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states. This message comes from Warby Parker. What makes a great pair of glasses at Warby Parker? It's all the invisible extras without the extra cost, like free adjustments for life. Find your [e-mail] or visit one of their hundreds of stores around the country. This message comes from Warby Parker. If you wear glasses, you know how hard it is to find the perfect pair. But step into a Warby Parker store and you'll see it doesn't have to be. Find a Warby Parker store near [e-mail].

[Ian Kass]

Retail Part 2 the World's First Scratch Ticket After New Hampshire became the first state to start selling lottery tickets, other states, like Massachusetts, slowly started to follow. But these early Versions of the lottery didn't really have the same thrill as today's lotteries. Here's Ian Cass with more.

[Kevin Weber]

The Massachusetts lottery, launched in 1972, offering only a single product, a weekly drawing so generic it was called simply the game. By 1973, excitement around the game had already worn off. Sales were in decline. But it's not because there weren't people who wanted to gamble. That same year, 1973, WGBH ran an hour long special on the issue of gambling.

[Alan Raymond]

Good evening, I'm Alan Raymond, and this is Stateline. Tonight we'll be discussing proposals to legalize gambling in Massachusetts.

[Kevin Weber]

The host interviewed a whole range of experts and public officials with a whole range of opinions. But they could all agree on one thing.

[Alan Raymond]

Illegal gambling is a way of life. In Boston and across the Commonwealth, illegal.

[Kevin Weber]

Gambling run by organized crime was everywhere.

[Alan Raymond]

$2 billion a year is being gambled illegally. We've averaged about 500 arrests a year.

[Kevin Weber]

It was a big problem.

[John Koza]

Illegal gambling is wrong.

[Kevin Weber]

Illegal gamblers have ways of making people pay, and no amount of law enforcement could solve it.

[Alan Raymond]

Perhaps the most you can hope to do with such a public desire to indulge is to try to keep it at some kind of tolerable level.

[Kevin Weber]

Levels. The discussion of gambling policy in the 70s really reminds me of the discussion around drug policy in more recent years. We were losing the war on gambling just like we lost the war on drugs. The demand was just too strong. And this looming presence of illegal gambling exerted two opposing forces on the state lotteries. I've mentioned how it required caution to avoid any appearance of corruption. FBI agents as lottery directors. But on the other hand, it required urgency action because one of the reasons to have a state lottery in the first place was to put those illegal operations out of business. And in 1973, the state's brand new lottery, with its single weekly drawing, wasn't going to cut it.

[Alan Raymond]

If legalization is to have any effect on organized crime, better services have to be provided by the legal operation.

[Kevin Weber]

That last voice in the radio special was Ted Harrington, who served for several years as the head of the region's organized crime strike force.

[John Koza]

Most people like to gamble, and yet it was declared illegal.

[Kevin Weber]

That's Harrington speaking today.

[John Koza]

As Al Capone said, I'm performing a public service. I'm giving the public what they want. And at the initiation of the lottery.

[Kevin Weber]

The underworld was still providing better services. In the early 70s, Harrington had helped to develop a key Mafia informant named Vincent Teresa, known to his critics as Fat Vinnie the Stool Pigeon. The two would meet in guarded motel rooms around the state to discuss new intelligence or prepare for testimony. Testimony that would influence the national conversation around organized crime.

[Audrey Evans]

Vincent Charles Teresa has 28 years experience.

[Kevin Weber]

In the criminal world. Teresa made national news in 1971 when he testified before a Senate committee. And the coverage focused on his main message.

[Alan Raymond]

Yeah, I'm talking about a definite syndicate operation that strictly starts with gambling. It all starts with gambling. All starts with gambling. Without gambling, they got nothing.

[Kevin Weber]

Did his testimony inform your thinking? Well, of course.

[John Koza]

It shaped everybody's conception of organized crime.

[Kevin Weber]

Teresa once described gambling as a chain link fence that stretches to every place in the world. The standby and the foundation. From it comes the corrupt politician and policeman. The bribes and payoffs and sometimes murder. If you could crush gambling, you would put the mob out of business.

[Alan Raymond]

They must have daily action legal betting on all forms of gambling.

[Kevin Weber]

This is why Harrington and others were pressuring the state to be much more aggressive and in the legal gambling services they offered.

[Alan Raymond]

We're proposing to compete with them in an area which we feel we can compete with them.

[Kevin Weber]

At that time, numbers, rackets and sports bookies could offer their customers daily action tax free winnings, better odds, better payouts, anonymity and the ability to bet on.

[Alan Raymond]

Credit simply wouldn't be as effective as theirs, I suppose.

[Kevin Weber]

So why on earth would you play the boring state lottery?

[Alan Raymond]

I'm sorry, we have run out of time. I'd like to thank you all for being being here tonight.

[Kevin Weber]

And thanks to all of you who called.

[Alan Raymond]

This is the Eastern Public radio network.

[Kevin Weber]

In 1973, it was time for the lottery to up its game. To provide what Al Capone would call a public service, but wrapped up in a new and legal packaging. And John Koza, the unemployed computer scientist, had the perfect idea for them. The instant ticket to cosa. The potential of this game design seemed obvious. You could print millions of lottery tickets, ship them to every corner of the state and packaged within each one would be suspense, entertainment and the promise of instant riches. So after he was laid off, he and another jobless colleague, Dan Bauer, decided to start their own company, Scientific Games. It was just the two of them, operated out of an apartment in Ann Arbor, Michigan and a kitchen table in Chicago. They started going back to those same lotteries they had pitched before. But this time there was one that was ready to hear them out. Massachusetts. Even better. The director of the Massachusetts lottery was no FBI agent.

[John Koza]

The director there was a PhD in mathematics. So he happened to really understand the scientific basis for what we were doing.

[Kevin Weber]

Everyone called the lottery director, Dr. Dr. Perrault. And in addition to being a mathematician, Dr. Peralt also happened to be an expert bridge player who once took his eight children on a family vacation to Las Vegas, in part to study the wheels and cards as illustrations of statistics. So when John Koza, Ph.D. in computer science, arrived in Massachusetts, things seemed promising. The man in charge spoke his language, combinatorics and all, and the people around him were eager to try something new.

[John Koza]

The Massachusetts Lottery was very innovative. That is, they were prepared to try an instant game.

[Kevin Weber]

There was just one problem.

[John Koza]

They had already given a contract for the instant game to another company.

[Kevin Weber]

Another company had beaten them to the same idea. It was not a scratch ticket exactly that this other company was offering. It was much more low tech, like an advent calendar with little paper flaps. But still, it claimed to offer the same basic novelty of an instant reveal. The brand new tickets, it turned out, were already on their way. And Coza could see immediately that those tickets were deeply flawed.

[John Koza]

And had they run it, it would have been a disaster, and there would never have been an instant lottery in any state for decades. It would have been a totally discredited idea. At that point.

[Kevin Weber]

The genius of an instant ticket was that it offered something no illegal operation could. And it did that by playing to the state's advantage. Technology. The only way a ticket like this could work was if it was so sophisticated, no one could copy it, no one could alter it, and no one could hack it. The Massachusetts Lottery had already rejected nearly 20 prototypes by the time they settled on a final design, the one with the paper flaps, only to have John Koza, this recently graduated whiz kid with a dimpled chin and a comb over, show up and tell them it was flawed. So on the spot, they made a deal. Koza could take home 50 tickets and do his best to prove they could be hacked.

[John Koza]

They gave us the tickets. I went back to Ann Arbor, Dan went back to Chicago, and they gave us a week or so.

[Kevin Weber]

Armed with his obsessive personality, plus years of experience playing cat and mouse with would be scam artists on his supermarket games, Koza got to work. The competitor's ticket was made of pretty thin paper with flap doors over the hidden numbers held down by glue, Koza's goal was to reveal those numbers without visibly altering the ticket. And within 24 hours, he had done it, not just once, not twice, but three separate ways.

[John Koza]

As I said, they were extremely flimsy tickets.

[Kevin Weber]

So the two salesmen got back on a plane and flew back To Boston. This time, Dr. Peralt was waiting on the Runway to greet them and carry their bags. Everyone reconvened at lottery headquarters. Probably half a dozen men in dark suits gathered around a conference table eagerly awaiting the presentation.

[John Koza]

Remember, they had not only given a contract to this company to print the tickets, Tickets were already printed and in the warehouse ready to be issued, and there were 25 million of them.

[Kevin Weber]

Patiently, Koza walked the lottery staff through each potential vulnerability.

[John Koza]

One of them involved a cystoscope, which is a medical device.

[Kevin Weber]

A cystoscope has a tiny lens on the end of a thin, flexible tube. A doctor might use it to examine the inside of a patient's bladder. Cosa used it to peer underneath the ticket's flap doors.

[John Koza]

That was one way in. And these tickets were printed on just really ordinary paper with line printers. Line printers, like a typewriter. It would make a physical bang impression and indent the paper.

[Kevin Weber]

So method number two was that if you ran the tickets through a photocopier, that raised impression was just prominent enough that the hidden numbers would come out in the copy. The danger in all this is that any convenience store clerk with a stack of tickets would be able to figure out which ones are the winners and decide who gets them again. Lotteries were terrified of losing credibility, and this would have done just that. Now, the average convenience store clerk might struggle with the first two methods Koza demonstrated, especially the cystoscope. And so to drive the point home, he had a final foolproof technique. In a dramatic demonstration, Coza opened a bottle of Fresca, something you could certainly find in the average convenience store. He poured the Fresca on the ticket, and the glue, which was supposed to be the ticket's sacred seal, simply let go. You could peel the whole thing apart, read the numbers, and glue it back together again. The lottery staff were horrified.

[John Koza]

It was compelling, let's put it that way. When the demonstration was over, there was no doubt.

[Kevin Weber]

The lottery canceled their existing contract and put out a new bid. John Coase's company, Scientific Games, won the contract. Their product, which used heavy paper, an indentation free printer, and of course, that famous shiny metallic film, became the world's first scratch ticket.

[Rund Abdelfatah]

Coming up, how the scratch ticket changed gambling forever.

[Kevin Weber]

Hello, this is Karen Fraser from Tampa.

[Alan Raymond]

Florida, and you're listening to Throughline from npr.

[Kevin Weber]

I love the we the People series. Thank you for putting it together.

[Nicole]

This Message comes from NPR. Sponsor 1Password. Secure access to your online world, from emails to banking, so you can protect what matters most with 1Password for a free 2 week trial. Go to 1Password.com NPR this message comes from Bombas.

[Audrey Evans]

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[Ian Kass]

Part 3 Instant Insanity. John Koza got his big break. The Massachusetts lottery chose his company's game to be sold statewide, the scratch ticket.

[John Koza]

Now, mind you, this was the very first ticket. As you can see, it was not very artistic.

[Kevin Weber]

Koza kept one of those original tickets preserved like a rare plant specimen in a block of solid resin. Yeah, I mean, the first ticket looks more like a receipt or something. It's not a receipt. Yeah, that's not very glamorous looking at all.

[John Koza]

It's not glamorous at all. Very boxy and wordy. It says one in five tickets wins. And then it says, using edge of coin, rub square spot at right and a number appears. So we had to tell people that. So rub the spot, then rub the four round spots. And if four matches, you win $10,000. And with three, you win 1,002, you win $10 and one match, you got two free tickets.

[Kevin Weber]

Wow. I love that. You have to explain on there that you have to use a coin and voila, a number will appear. The fact that you have to explain that is hilarious.

[John Koza]

Absolutely. Nobody had seen a ticket like this before in a State Lottery.

[Kevin Weber]

On May 29, 1974, just over 50 years ago, people walked into convenience stores and gas stations around the state and saw that ticket. Could you just introduce yourself?

[Geraldine Stewart]

Hi, my name is Geraldine Stewart. I live in Springfield, Massachusetts.

[Kevin Weber]

And can you take me back to 1974 and how you first heard about this thing called an instant ticket?

[Geraldine Stewart]

I don't remember exactly how I heard about it. I'm sure it was on the news. So I thought I would go out and buy a ticket.

[Kevin Weber]

Do you remember the store you went to?

[Geraldine Stewart]

I believe it was the Pride Station in East Long Meadow. It's a gas station and they also sell lottery tickets there. So I thought, well, hey, I could use that, so I'll try it. And I was lucky.

[Kevin Weber]

Stewart won a thousand dollars on that first ticket. And she wasn't the only one playing.

[Alan Raymond]

These people were ready. They knew it was coming.

[Kevin Weber]

Like they were lined up in the morning when you opened.

[Alan Raymond]

Yeah. Yep, lined up.

[Kevin Weber]

In 1974, Glenn Mayette ran a country store in Hanover, Mass.

[Alan Raymond]

People would scratch them immediately on the counter. Some would take two steps away and scratch it on an ice cream chest. Some would feel like they had to go outside and sit in their car.

[Kevin Weber]

He remembers the very first customer of the day was a lottery regular. And she just kept coming back up for more tickets, then going back to scratch them in the freezer section.

[Alan Raymond]

It was just crazy. It's like I thought she was going to lose her mind.

[Kevin Weber]

The appeal of the instant game is the same appeal as the slot machine. There's no waiting. So if you don't win, you can always try again. And if you do win, well, now you've got more money to play with. It was self feeding in a way that no lottery had ever been before. One liquor store owner described the scene as instant insanity. A pharmacy set up a separate sales counter at the back of the store just for lottery tickets so non lottery customers wouldn't be disturbed by the unruly crowds. Within a day, stores across the state had run out of tickets and were waiting to be resupplied.

[Alan Raymond]

People just like it fast. They don't want to wait.

[Geraldine Stewart]

It's the drama in it.

[Alan Raymond]

It's like fast food. You go pull up at McDonald's. You don't even have to get out of your car. Give me this, that and the other thing. Fast and snappy sometimes.

[Geraldine Stewart]

Well, if I scratch the ticket, if I'm sitting in my car after I buy it, will it be a winner or will it be a winner when I scratch it when I'm home, you just think of all these crazy things that now hopefully you're a winner.

[Kevin Weber]

That first ticket also had a secondary game on it where you scratched a spot to reveal a single letter. If you then collected all the letters to spell the word Instant, you won $10,000. The catch, which was not well advertised, was that only one out of every half million tickets had the letter s. Sending players with all the other letters. On a frantic statewide search for stores that were rumored to have the mythical s. The State sold over 20 million tickets in two months. Did you realize that you had created something that would be huge?

[John Koza]

Absolutely.

[Kevin Weber]

That would spread.

[John Koza]

In fact, when I submitted the business plan to our local bank, I had predicted that we would sell $6 million in tickets the first year. And the vice president of the that I was working with at the time, he said, I can't submit this to the loan committee. They will just laugh at this. So we cut it back to a million. And the first year sales was $6 million.

[Kevin Weber]

Wow.

[John Koza]

And that was because the other lotteries in 75, I think there's five or six other state lotteries simultaneously started instant games.

[Kevin Weber]

The other states had waited for someone else to take the plunge, but once they saw what was happening in Massachusetts, they jumped right in.

[John Koza]

We knew we hit the world by the tail.

[Kevin Weber]

Do you still play scratch tickets?

[Geraldine Stewart]

Oh, sure. I haven't been as lucky, though.

[Kevin Weber]

Again, Geraldine Stewart, the thousand dollar winner. Here's the question, I guess. Do you think you've spent more than $1,000 on lottery tickets at this point?

[Geraldine Stewart]

Yes, absolutely. But I wanted to tell you that my son never bought a scratch ticket in his life. And he's 50, and he decided a day ago he had some extra money, so he bought a ticket. He won $500 on that one ticket, his first scratch ticket, and he won $500.

[Kevin Weber]

Did you tell your son that he should quit while he's ahead and keep the money from that first ticket and never buy another?

[Geraldine Stewart]

No. Now I know my son.

[Kevin Weber]

Today, Americans spend over $100 billion a year on lottery tickets. Almost two thirds of that total is spent just on scratch tickets. Yes, the Powerball jackpots are what you see in the window of the convenience store. They get more press and the keynote numbers are always flashing on the TV screen in the corner. But the scratch ticket is the bread and butter, day in, day out game that keeps the money flowing. We spend more on scratch tickets than we do on movie tickets, concert tickets and sports tickets combined. At 5, 20, maybe $50 a pop. That is a lot of scratch tickets. And do you come in here every day?

[Alan Raymond]

Of course I do.

[Kevin Weber]

I live right across the street. Joe's Market in Quincy is one of the busiest lottery retailers in Massachusetts. It has all your convenience store staples. But the area behind the counter is dominated by scratch tickets. At least 50 different clear plastic boxes, all numbered and all dangling, colorful tickets. For every hardcore player I meet, there are many, many casual players.

[Alan Raymond]

Usually cigarettes in the newspapers, the people.

[Kevin Weber]

Who stop by for cigarettes, or to get cash from the ATM for the car wash. And the tickets are right there. So why not try your luck? Do you play other lottery games or just scratch tickets? Just scratch tickets. I met a lot of those people. Why this ticket of all these, the options up there?

[Audrey Evans]

Because it caught my attention and I just decided to buy it. It was a whim. Yeah.

[Alan Raymond]

If I win, I share with you, right?

[Kevin Weber]

Yeah. If I lose, you share with me.

[Audrey Evans]

Oh, no.

[Kevin Weber]

And what are you. What are you playing today? $20 cash, Word.

[Audrey Evans]

And two $10 ones.

[Kevin Weber]

How do you pick? I mean, there's so many tickets up there. These games have changed since 19. In important ways, they are not the same boxy, wordy ticket with just four spots to scratch and a max prize of $10,000. But the basic appeal remains the same. It's just been a hit. Scratch tickets.

[Alan Raymond]

People want scratch tickets. Absolutely. You want to win on the spot.

[Kevin Weber]

Is that why you still play?

[Alan Raymond]

Yeah. Lack of br.

[Kevin Weber]

There is this innocuous quality to scratch tickets. They don't really feel like gambling at all. When I was a kid, my stepdad's family would throw a big Easter party. But the prize for the egg hunt was not candy or knickknacks. It was scratch tickets. Every kid ended the hunt with a lap full of scratch tickets. I've heard so many stories like this. The stocking stuffers, the work party gifts. These tickets have found their way into every corner of life. And of course, nowhere is that more true than the place where it all began. Sorry, could you tell me about this dream involving the number two? I just scratched a two and underneath it was four million.

[Audrey Evans]

But I mean, like I said, it's a dream, so.

[Kevin Weber]

But you put some weight in it come true. You know you want to believe that.

[Rund Abdelfatah]

That's it for this week's show. I'm Rund Abdelfatah.

[Ian Kass]

I'm Ramtin Arablouei and you've been listening to Throughline from npr.

[Rund Abdelfatah]

This episode was produced by me and.

[Ian Kass]

Me and Lawrence Wu, Julie Cain, Anya.

[Audrey Evans]

Steinberg, Casey Minor, Christina Kim, Devin Kadayama, Sarah Wyman, Irene Noguchi.

[Rund Abdelfatah]

Thanks to Ian Kass for bringing us this amazing story, but it doesn't end here. This is just the first episode of a longer series from GBH News called Scratch and Win, where Ian follows the rise of scratch tickets to the present day. You can listen to the other episodes wherever you listen to podcasts.

[Ian Kass]

Thanks also to Isabel Hibbard and Lacey Roberts, who produced and edited the story for Scratch and Win, and to editorial supervisor Jennifer McKim, with support from Ryan Alderman. Mae Ley is the project manager, and the executive producer is Devin Mavic Robbins.

[Rund Abdelfatah]

Thanks also to Johnnette Oakes Keantre, Starling, Johannes Durgi, Nadia Lancy, Edith Chapin and Colin Campbell. This episode was engineered by Ian Kass and Robert Rodriguez.

[Ian Kass]

And finally, if you have an idea or like something you heard on the show, write [e-mail] and if you don't already, please follow us on Apple, Spotify and the NPR app. That way you'll never miss an episode.

[Rund Abdelfatah]

Thanks for listening.

[Audrey Evans]

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