John Koza interview

John Koza is the co-inventor of the lottery scratch card. Recently, Rob Alexander from interviewed him to find out more about his invention. Below is the transcript from that interview.

Rob: Can you tell us how the idea for scratchcards came about? Was it a scientific project or were you actually trying to create a product for the gambling market?

John Koza: Well, I had been involved with a company in the 1960’s that produced scratch off tickets for supermarkets and gas stations. This was a very popular form of promotion in the 60s and 70s. The company had produced some probability games at the time, which were games where every ticket could be a winner if the player rubbed the correct spots.

So the player would rub only some of the spots and if they got the right symbols on those spots they’d win a prize. In fact, we ran some of those games in the UK, Europe and the United States. So, these were an especially secure kind of commercial game. Commercial games had an average of about one or two cents in prizes per ticket, so they were secure in the sense that a relatively smaller average amount of money was available to win on each ticket.

While I was working for that company, we visited some of the state lotteries to see if they might be interested in getting that kind of instant win game, because at the time state lotteries were running raffle type games. For example they’d have a six-digit number and once a week they’d draw a number and if you had matched it you’d win a prize. They were not doing very well in terms of sales.

We said what the public would much prefer, we were sure, was the ability to win instantly. We weren’t proposing that lotteries run probability games, we were proposing games with pre-printed winning tickets inserted into the supply. So called controlled games (those were the two terms that were in use at the time). States weren’t going to consider a probability game; that would have been way too risky.

But, the high level of security of these probability games was of interest to the state lotteries because they were obviously offering a lot more in prizes. So, as it happened, the company I worked for went bankrupt in 1972. Then, my partner [Dan Bower] and I  went out and tried to continue to sell state lotteries this kind of ticket. About a year later, in 1974, we got a contract with Massachusetts to run a game and it was a huge success [it tripled their sales]. Then we went from state to state to sell this more successful type of game. All the state lotteries at the time eventually joined up and started running instant games.

R: Did the lotteries get in touch with you once they knew it was such a popular and successful format?

J: By the time we had sold it to Massachusetts we had visited all the state lotteries. There were only about seven or eight lotteries in existence in the United States at the time so everybody knew who we were. Everybody was watching the first game in Massachusetts to see if it would work.

R: So, you were pretty sure that your game would be popular?

J: Absolutely, because the existing state lottery games were very dull, sales were low and they were declining in most cases.

R: Do you consider the development and invention of scratchcards to be one of your greatest achievements, considering how much has been raised through their sale for charity and good causes all over the world?

J: Well, obviously it’s raised a huge amount of money for whatever the good causes are of the different lotteries all around the world. In fact, I think its more popular now than the online lotto games in the United States. In the 80s, for example, the lotto games became more popular than the instant games for roughly a ten year period. Instant games re-emerged as the most popular games in more recent years.

R: Are you surprised at all that they are still so popular so long after they joined the market? What do you feel the reasons are for their continued popularity?

J: Well, lotteries are always popular. So, the instant game, with its instant gratification is bound to be appealing. That’s undoubtedly why it re-emerged in the 1990s as a bigger revenue raiser than lotto, because the with the lotto games you have to wait a week to see if you’ve won. In a sense, lotto games are much like the games in the 1960s and early 70s before the instant game where the public had this delayed process of having to find out what the winning numbers were and see if they had won. When lotto games first came out and were offering multi-million dollar prizes, that were far bigger than the instant game, for a temporary time, they were in the lead. Obviously both games are popular now.

R: Are you aware of online scratchcards and do you think it’s a concept that could translate well to the electronic world?

J :I’m not aware of that, how do they work?

R: Well, you visit a site that offers online scratchcards, choose the game you want to play and then card is presented to you on your computer screen then you can drag your mouse over it in a scratching motion to reveal if you’ve won a prize or not. Much like on a traditional instant game.

J: Well, that’s clever. I’m aware of the concept, it was around even in the 80s when I was still CEO of Scientific Games. But, nobody had done it legally

R: Do you play instant games yourself?

J: I do occasionally. I’ve always been a lottery player, even before I got into the business of state lotteries. I certainly enjoy them and do buy them. Not as regularly as I used to, but I do.

R: Have you had any big wins at all?

J: I won $500 once in the Quebec Lottery.

R: Would you encourage people to play scratchcards nowadays?

J: Well, I think they’re fun, so people should play them if they feel the same way.

R: Have you and Daniel Bower worked on other projects together or was it just instant gaming you collaborated on?

J: He remained active in the lottery business – I think he’s now retired – until at least the 30th anniversary of the instant game in Massachusetts, which was in 2004. I haven’t had any particular business dealings with Dan. I see him every now and again when I get to Atlanta.

R: Well, thank you very much for your time; it was nice talking to you.

J: It was nice talking to you, thank you.

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