Get Rich Quick: The American Lottery

Want to get rich quick? You're not alone. Right now, Americans spend over $100 billion, yes billion, every year on lottery tickets. Today on the show, in collaboration with Scratch and Win https://www.wgbh.org/podcasts/scratch-win from WGBH, how the mafia, Sputnik, medical equipment, and the electoral college led to American's obsession with playing the numbers. See pcm.adswizz.com https://pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. NPR Privacy Policy https://www.npr.org/about-npr/179878450/privacy-policy

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  This message comes from Midi Health. Most women never get real answers about their hormonal health. Midi is changing that with virtual care covered by most major insurances. Understand your hormones. Visit joinmidi.com to book your first visit today.

• 0:20Speaker 01

  Today, there are numerous ways to gamble.

• 0:25Rund Abdelfatah?

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

• 0:31Speaker 01

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

• 0:36Speaker 03

  Tap into Bet MGM Casino and you're entering a huge library full of exclusive games.

• 0:42Rund Abdelfatah?

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

• 0:47Speaker 04

  New customers bet $5 and get 150 in bonus bets if you win. FanDuel, America's number one sportsbook.

• 0:52Speaker 01

  Whether you're at a poker table or at home watching a basketball game, legal gambling has never been easier.

• 1:04Rund Abdelfatah?

  But gambling's got a complicated history in the US.

• 1:08Speaker 01

  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.

• 1:17Rund Abdelfatah?

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

• 1:35Speaker 05

  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.

• 1:46Speaker 01

  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 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.

• 2:09Speaker 05

  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-run gambling. And then, of course, it starts to innovate and experiment on top of that.

• 2:51Rund Abdelfatah?

  She's like, how did you first encounter the story? What was the thing that got you hooked on it?

• 2:57Speaker 05

  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 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.

• 3:39Speaker 05

  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 the 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.

• 4:26Speaker 01

  Today, obviously, sports gambling is everywhere. It's to the point where it's unavoidable. I'm watching a game with my nine-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?

• 5:02Speaker 05

  So I interviewed a longtime Massachusetts congressman named Barney Frank, who listeners may know as, 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 going to see foreclosures, you're going to see bankruptcy, you're going to see broken homes, like truly, society will come unraveled if people can freely bet their money anytime

• 5:47Speaker 05

  out in broad daylight. You'll have mafia gangsters like infiltrating state government, taking over the games, rigging the drawings. Like, 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, you know, put a casino down by the waterfront. Or maybe we turn on the sports betting thing and we take a cut of that.

• 6:30Speaker 05

  And so it sets all those other things in motion.

• 6:33Rund Abdelfatah?

  Just opens the can of worms.

• 6:34Speaker 05

  For sure, yeah.

• 6:35Rund Abdelfatah?

  And we're, and we're living in that, like-

• 6:37Speaker 05

  We're living in the can of worms.

• 6:39Rund Abdelfatah?

  Yeah, yeah.

• 6:40Speaker 05

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

• 6:47Speaker 01

  I'm Ramtin.

• 6:48Rund Abdelfatah?

  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.

• 7:07Speaker 01

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

• 7:19Rund Abdelfatah?

  Coming up, the scratch ticket.

• 7:33Speaker 06

  Hi, my name's Kevin Weber from Kansas City, Kansas. And you're 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.

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• 8:15Speaker 05

  Hey, it's Lotte from Radiolab. Our goal with each episode is to make you think, how did I live this long and not know that? Radiolab, adventures on the edge of what we think we know. Listen wherever you get podcasts.

• 8:30Speaker 00

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• 8:46Speaker 05

  Part one, America's favorite pastime.

• 8:51Speaker 01

  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.

• 9:06Rund Abdelfatah?

  Here's producer Ian Coss with the story.

• 9:12Speaker 05

  So the US 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. There's 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.

• 9:55Speaker 05

  But when you get to the top of the list, things get weird. New York, Michigan, Georgia, they're all respectable at around $500 or $600 per adult. And then there is the lone 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.

• 10:35Speaker 05

  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 de-stigmatizing 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

• 11:19Speaker 05

  brings in $1,037 every year for every adult in the state of Massachusetts.

• 11:28Speaker 01

  Today, you can pretty much buy a lottery ticket anywhere. Gas station, liquor store, 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.

• 11:47Speaker 05

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

• 11:53Speaker 04

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

• 11:56Speaker 05

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

• 12:03Speaker 04

  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.

• 12:12Speaker 05

  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.

• 12:36Speaker 04

  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.

• 12:56Speaker 05

  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.

• 13:09Speaker 04

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

• 13:16Speaker 05

  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.

• 13:31Speaker 04

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

• 13:36Speaker 05

  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 or rigged?

• 14:21Speaker 05

  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. Today, a new moon is in the sky, a 23-inch metal sphere placed in orbit by a Russian rocket. We'll begin that chain in October of 1957, with a 10th-grade student in a suburb

• 15:06Speaker 05

  of Detroit named John Coza. Do you remember when Sputnik launched? Like, did you hear it on the news?

• 15:12Speaker 04

  Oh, absolutely. Everybody was listening to it.

• 15:16Speaker 05

  You are hearing the actual signals transmitted by the Earth-circling satellite, one of the great scientific feats of the age. You could hear those little beep-beep-beep-beep-beep?

• 15:25Speaker 04

  The beeps, yeah.

• 15:27Speaker 05

  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?

• 15:37Speaker 04

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

• 15:48Speaker 05

  Coza'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.

• 15:59Speaker 05

  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.

• 16:11Speaker 04

  Using surplus parts from jukeboxes and pinball machines.

• 16:17Speaker 05

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

• 16:20Speaker 04

  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.

• 16:35Speaker 05

  So, you go, you know, July 4th, 1776. What's the day of the week?

• 16:40Speaker 04

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

• 16:45Speaker 05

  10 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.

• 16:57Speaker 04

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

• 17:01Speaker 05

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

• 17:08Speaker 04

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

• 17:18Speaker 05

  Koza 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.

• 17:43Speaker 04

  So, it was quite an unusual election.

• 17:45Speaker 05

  Yeah.

• 17:46Speaker 04

  And there was a lot of attention on the Electoral College. On the all-important Electoral College board.

• 17:52Speaker 05

  And those all-important electoral votes, that gives a... With all that news coverage, Kozak thought that a game about the arcane functioning of US elections might just break through. It was a flop.

• 18:04Speaker 04

  In any case, 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.

• 18:22Speaker 05

  The executive invited Kozak to Chicago to meet, and Kozak agreed.

• 18:27Speaker 04

  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 it was just a fortuitous case. They reached out and they found exactly the right person.

• 18:54Speaker 05

  You can think of John Kozak 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 Kozak 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 Kozak.

• 19:41Speaker 05

  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.

• 19:59Speaker 04

  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.

• 20:08Speaker 05

  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.

• 20:19Speaker 05

  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, Koza 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.

• 21:02Speaker 04

  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.

• 21:14Speaker 05

  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.

• 21:23Speaker 04

  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.

• 21:31Speaker 05

  I don't know if you're 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 bugs.

• 21:43Speaker 04

  Right. 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.

• 21:59Speaker 05

  Unpredictable 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&H, went bankrupt. In December of 1972, Koza was cut loose.

• 22:17Speaker 04

  Which coincidentally was exactly the month when I graduated and got my PhD.

• 22:24Speaker 05

  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?

• 22:35Speaker 04

  Well, again, a lucky coincidence.

• 22:39Speaker 04

  In the last year of J and 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.

• 22:53Speaker 05

  The idea was to take this ticket design that Cozza 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.

• 23:16Speaker 05

  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. Mike, you don't come to Las Vegas and talk to a man like Mo Green like that. In 1972, just as Cozza was first pitching his idea for a scratch ticket, The Godfather was the number-one movie in America.

• 23:57Speaker 05

  It showed the extortion and murder lurking beneath the glitz of Vegas, the almost magnetic attraction between gambling and crime. Don't ever take sides with anyone against the family again.

• 24:14Speaker 05

  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 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. In fact, the directors of the first three state lotteries were all former FBI men. To assure the public that the games were fair, even if they were designed poorly. That was the focus: security, integrity, not innovation, and certainly not combinatorial mathematics.

• 24:58Speaker 05

  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 Coza, unemployed and looking for an opening, would join them.

• 25:26Rund Abdelfatah?

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

• 25:41Speaker 03

  Hi, this is Nicole calling from Boston, NOS. You're listening to Throughline. I love listening to the show. There's always something that I learn, even on topics that I think I already know a lot about.

• 25:53Speaker 00

  Stay tuned for the following announcements and messages from our sponsors. Support for NPR and the following message come from Bowlin Branch. Change your sleep with the softness of Bowlin Branch's 100% organic cotton sheets. Feel the difference with 15% off your first set of sheets at bowlinbranch.com with code NPR. Exclusions apply. See site for details.

• 26:16Speaker 03

  This week on Wait, Wait, Don't Tell Me, panelist Paula Poundstone shares a hot tip for saving money this Halloween.

• 26:22Speaker 00

  I used to have my kids go out early enough that I could take their candy and give it out.

• 26:29Speaker 03

  That's so smart.

• 26:30Speaker 00

  Yeah.

• 26:31Speaker 03

  Don't miss our full conversation and the rest of our games. Listen to the Wait, Wait, Don't Tell Me podcast in the NPR app or wherever you get your podcasts. Midlife brings a lot of changes. Your Turn with Alison Aubrey is a new podcast to help you navigate the twists and turns. From health and relationships to creativity and purpose, we can help steer your next chapter with Your Turn with Alison Aubrey. Find it on the NPR app or wherever you get your podcasts.

• 27:02Speaker 01

  Part Two, The World's First Scratch Ticket.

• 27:07Speaker 01

  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.

• 27:22Speaker 05

  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.

• 27:49Speaker 05

  That same year, 1973, WGBH ran an hour-long special on the issue of gambling. Good evening. I'm Alan Raymond, and this is Stateline. Tonight, we'll be discussing proposals to legalize gambling in Massachusetts, and our panel will be responding. 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. Illegal gambling is a way of life in Boston and across the Commonwealth. Illegal gambling, run by organized crime, was everywhere.

• 28:21Speaker 06

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

• 28:26Speaker 05

  It was a big problem. Illegal gambling is wrong. Illegal gamblers have ways of making people pay. And no amount of law enforcement could solve it. Perhaps the most you can hope for do with such a public desire to enjoy. is to try to keep it at some kind of tolerable 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.

• 29:02Speaker 05

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

• 29:46Speaker 05

  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.

• 29:55Speaker 04

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

• 30:01Speaker 05

  That's Harrington speaking today.

• 30:03Speaker 04

  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, the underworld was still providing better services.

• 30:21Speaker 05

  In the early 70s, Harrington had helped to develop a key mafia informant named Vincent Teresa, known to his critics as Fat Vinny 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.

• 30:44Speaker 00

  Vincent Charles Teresa has 28 years' experience in the criminal world.

• 30:48Speaker 05

  Teresa made national news in 1971, when he testified before a Senate committee, and the coverage focused on his main message.

• 30:58Speaker 06

  A definite syndicate operation that strictly starts with gambling. It all starts with gambling. All starts with gambling. Without gambling, they got nothing.

• 31:09Speaker 05

  Did his testimony inform your thinking?

• 31:12Speaker 04

  Well, of course, it shaped everybody's conception of organized crime.

• 31:19Speaker 05

  Theresa once described gambling as, quote, "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."

• 31:40Speaker 06

  They must have daily action, legal betting on all forms of gambling, namely--

• 31:46Speaker 05

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

• 31:54Speaker 06

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

• 31:58Speaker 05

  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 credit.

• 32:11Speaker 06

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

• 32:13Speaker 05

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

• 32:17Speaker 07

  I'm sorry, we have run out of time. I'd like to thank you all for being here tonight, and thanks to all of you who called. This is the Eastern Public Radio Network.

• 32:28Speaker 05

  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 Coza, the unemployed computer scientist, had the perfect idea for them: the instant ticket. To Coza, 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.

• 33:13Speaker 05

  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.

• 33:32Speaker 05

  Even better, the director of the Massachusetts Lottery was no FBI agent.

• 33:37Speaker 04

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

• 33:49Speaker 05

  Everyone called the lottery director Doctor, Dr. Peralta. And in addition to being a mathematician, Dr. Peralta 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 Coza, PhD 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.

• 34:25Speaker 04

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

• 34:31Speaker 05

  There was just one problem.

• 34:33Speaker 04

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

• 34:39Speaker 05

  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.

• 35:07Speaker 04

  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.

• 35:25Speaker 05

  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 Coza, 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. Coza could take home 50 tickets and do his

• 36:09Speaker 05

  best to prove they could be hacked.

• 36:14Speaker 04

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

• 36:21Speaker 05

  Armed with his obsessive personality, plus years of experience playing cat and mouse with would-be scam artists on his supermarket games, Coza got to work. The competitor's ticket was made of pretty thin paper with flap doors over the hidden numbers, held down by glue. Coza'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.

• 36:52Speaker 04

  As I said, they were extremely flimsy tickets.

• 36:55Speaker 05

  So the two salesmen got back on a plane and flew back to Boston. This time, Dr. Peralta was waiting on the runway to greet them and carry their bags.

• 37:08Speaker 05

  Everyone reconvened at lottery headquarters. Probably half a dozen men in dark suits gathered around a conference table, eagerly awaiting the presentation.

• 37:20Speaker 04

  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.

• 37:33Speaker 05

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

• 37:39Speaker 04

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

• 37:44Speaker 05

  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. Coza used it to peer underneath the tickets' flap doors.

• 37:57Speaker 04

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

• 38:13Speaker 05

  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.

• 38:26Speaker 05

  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 Coza 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,

• 39:11Speaker 05

  simply let go. You could peel the whole thing apart, read the numbers, and glue it back together again.

• 39:21Speaker 05

  The lottery staff were horrified.

• 39:24Speaker 04

  It was compelling, let's put it that way.

• 39:28Speaker 04

  When the demonstration was over, there was no doubt.

• 39:32Speaker 05

  The lottery canceled their existing contract and put out a new bid. John Coza'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.

• 39:58Speaker 00

  Coming up, how the scratch ticket changed gambling forever.

• 40:13Speaker 00

  Hello, this is Karen Fraser from Tampa, Florida. And you're listening to Throughline from NPR. I love the We the People series. Thank you for putting it together. Stay tuned for the following announcements and messages from our sponsors. Support for NPR and the following message come from Bowlin Branch. Change your sleep with the softness of Bowlin Branch's 100% organic cotton sheets. Feel the difference with 15% off your first set of sheets at bowlinbranch.com with code NPR. Exclusions apply. See site for details.

• 40:49Speaker 05

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• 41:29Speaker 01

  Part three, instant insanity. John Kozak got his big break. The Massachusetts Lottery chose his company's game to be sold statewide. The scratch ticket.

• 41:43Speaker 04

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

• 41:48Speaker 05

  Kozak 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.

• 41:59Speaker 04

  A receipt, yeah, that's right.

• 42:00Speaker 05

  It's not very glamorous looking at all.

• 42:02Speaker 04

  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.

• 42:20Speaker 05

  Yep.

• 42:20Speaker 04

  Then rub the four round spots. And if four matches, you win $10,000. And with three, you win $1,000. And two, you win $10. And one match, you got two free tickets.

• 42:32Speaker 05

  Wow. I love that you have to explain on there that you have to use a coin. And voila, a number will appear. I like the fact that you had to explain that is hilarious.

• 42:42Speaker 04

  Absolutely. Nobody had seen a ticket like this before in a state lottery.

• 42:48Speaker 05

  On May 29th, 1974, just over 50 years ago. People walked into convenience stores and gas stations around the state and saw that ticket.

• 43:00Speaker 05

  Could you just introduce yourself? Hi, my name is Geraldine Stewart. I live in Springfield, Massachusetts. And can you take me back to 1974? And how you first heard about this thing called an instant ticket? 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. Do you remember the store you went to? I believe it was the Pride Station in East Langmeadow. 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. Stewart won $1,000 on that first ticket. And she wasn't the only one playing.

• 43:41Speaker 01

  These people were ready. They knew it was coming.

• 43:44Speaker 05

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

• 43:46Speaker 01

  Yeah, yeah, lined up.

• 43:48Speaker 05

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

• 43:53Speaker 01

  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.

• 44:04Speaker 05

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

• 44:15Speaker 01

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

• 44:20Speaker 05

  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.

• 45:00Speaker 01

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

• 45:05Speaker 05

  It's the drama in it. 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, well, if I scratched a 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.

• 45:31Speaker 05

  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.

• 46:07Speaker 05

  Did you realize that you had created something that would be huge?

• 46:11Speaker 04

  Absolutely.

• 46:12Speaker 05

  That would spread.

• 46:13Speaker 04

  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.

• 46:24Speaker 04

  And the vice president of the bank 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's sales was $6 million.

• 46:38Speaker 05

  Wow.

• 46:39Speaker 04

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

• 46:50Speaker 05

  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.

• 46:58Speaker 04

  We knew we had the world by the tail.

• 47:04Speaker 05

  Do you still play scratch tickets? Oh, sure. I haven't been as lucky, though. Again, Geraldine Stewart, the $1,000 winner. Here's the question, I guess. Do you think you've spent more than $1,000 on lottery tickets at this point? 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. Yeah. He won $500 on that one ticket. Wow. His first scratch ticket, and he won $500. 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?

• 47:48Speaker 05

  No. No, I know my son. Today, Americans spend over $100 billion a year on lottery tickets. Almost 2/3 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.

• 48:31Speaker 05

  At $5, $20, maybe $50 a pop, that is a lot of scratch tickets. And do you come in here every day? Of course I do. 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. Tickets to lottery, though. Usually cigarettes in the newspapers.

• 49:12Speaker 05

  The people 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? Have you, do you play other lottery games, or just scratch tickets?

• 49:24Speaker 00

  Um, just scratch tickets.

• 49:25Speaker 05

  I met a lot of those people. Why this ticket of all the options up there?

• 49:30Speaker 00

  Because it caught my attention, and I just decided to buy it. It was a win, yeah.

• 49:35Speaker 05

  If I win, I share with you, right? If I lose, you share with me? No. And what are you, what are you playing today?

• 49:46Speaker 00

  Uh, $20 cash word and two $10 ones.

• 49:50Speaker 05

  How do you pick? I mean, there's so many tickets up there. These games have changed since 1974 in important ways. They're 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. People want scratch tickets. Absolutely. You want to win on the spot. Is that why you still play? Yeah. Lack of brains.

• 50:23Speaker 05

  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. Kesar, could you tell me about this dream involving the number two?

• 51:01Rund Abdelfatah?

  Just scratched a two and underneath it was 4 million. But, I mean, like I said, it's a dream.

• 51:06Speaker 05

  But you put some weight in it.

• 51:09Rund Abdelfatah?

  Come true, you know? You want to believe that.

• 51:29Rund Abdelfatah?

  That's it for this week's show. I'm Rundah Delfatah.

• 51:32Speaker 01

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

• 51:37Rund Abdelfatah?

  This episode was produced by me.

• 51:38Speaker 01

  And me, and.

• 51:40Speaker 03

  Lawrence Wu. Julie Kane.

• 51:42Speaker 00

  Anya Steinberg.

• 51:43Speaker 03

  Casey Minor. Christina Kim.

• 51:45Speaker 05

  Devin Kadyama. Sarah Wyman.

• 51:48Rund Abdelfatah?

  Irene Noguchi. Thanks to Ian Kaz 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.

• 52:08Speaker 01

  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. May Lei is the project manager, and the executive producer is Devin Maverick-Robins.

• 52:27Rund Abdelfatah?

  Thanks also to Jonath Oakes, Keandre Starling, Johannes Sturgie, Nadia Lancy, Edith Chapin, and Colin Campbell. This episode was engineered by Ian Kaz and Robert Rodriguez.

• 52:40Speaker 01

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

• 52:55Rund Abdelfatah?

  Thanks for listening.

• 53:01Speaker 01

  Stay tuned for the following announcements and messages from our sponsors.