Scratch-off games hit big for Florida and other state lotteries

by | Dec 28, 2018

 

Online, mega-jackpot games like Powerball and Mega Millions may grab the headlines for their huge payouts, but it’s the instant, scratch-off tickets that are the bread and butter of the lottery industry. And 2018 was no different, producing another banner year in the U.S. for scratch-off lottery ticket sales.

Earlier this month the lottery industry reached a milestone, surpassing $50 billion in sales of instant scratch tickets for the first time.

In Florida, retail sales of instant tickets grew by 9.6 percent last year, double the industry average.

“At the end of the day, in Florida specifically, just a hair under 70 percent of all lottery sales in Florida are coming from the instant, scratch-off games,” said Sam Wakasugi, vice president of Strategic Business Management for the lottery firm called Scientific Games, a leader among private firms that specialize in the creation of scratch-off games.

“It’s phenomenal that this industry, as big as it is, and people still talk about Powerball and Mega Millions, but instant is the king in the lottery business,” said Wakasugi.

Instant ticket sales translated into more than $900 million of the Florida Lottery’s $1.7 billion in contributions to education last year. It was the Lottery’s seventh consecutive year of record-breaking profits for education.

But, while the instant scratch games continue to produce big numbers, they pose a challenge to firms such as Scientific Games, which has been associated with the Florida Lottery since its creation in 1988. How do you keep the scratch-off games fresh and exciting so that customers maintain an interest?

Scientific Games launched the world’s first secure instant game in 1974, and is the world’s largest provider and manager of instant scratch lottery games. It is currently producing 2,500 games in the U.S. Since its first scratch lottery game, the firm has produced in excess of 50,000 scratch-off ticket games.

The company has a proprietary database that allows it to track the  performance of each of those games. That let’s the firm know what works and what doesn’t in states like Florida.

“Constantly coming up with games that consumers are going to react positively to is a combination of art and science,” Wakasugi said. “Taking what we’ve learned since 1974 and putting all of the elements of a game that we know consumers respond to, that’s kind of the art behind this.”

In an effort to maintain interest in their instant games, Scientific Games announced earlier this month it has extended its contract with Hasbro through 2025 to continue using some of the game company’s popular games as a basis for scratch-off games.

“Since 1998, Scientific Games has worked collaboratively with Hasbro in using the MONOPOLY brand as a pillar for innovation, leveraging its popularity to become one of the industry’s top game brands,” said Scientific Games’ President and CEO, Barry Cottle. “This new agreement signifies the strength of a great collaboration and celebrates the global endearment of the MONOPOLY brand as a leading slot brand and the top selling licensed brand for lottery tickets.”

In addition to MONOPOLY, the extended agreement will allow the lottery game creator to use many of Hasbro’s other iconic games such as Game of Life, Battleship, and Scrabble, as the basis for its scratch-off games.

That combination of art and science utilized by the lottery firm has resulted in the growth of Florida Lottery scratch-off games from $533 million from it first year in 1988 to a $4.65 billion product line in annual sales.

That has allowed the Florida Lottery to contribute more nearly $33 billion to public education in Florida over the past 30 years, while allowing more than 800,000 Florida students to attend college on a Bright Futures Scholarship made possible by the Lottery’s returns. A big part of that money came from instant ticket sales

“Constantly striving looking for ways to give consumers what they want,” Wakasugi said. “Because in Florida, with 50 some games a year, it is a difficult job to keep consumers engaged every single day because they can be finicky and it’s like what’s the next best thing.”

To help keep consumers engaged, Scientific Games has a “dream team” whose job it is to come up with innovative games that appeal to the public. But it takes more than than the game itself to sell tickets. It also takes creative marketing. Wakasugi says expect to see a new look to the tickets themselves.

“Printing on holographic paper, putting holographic stamps on paper, using fluorescent inks on the paper, these are all things that attract attention,” Wakasugi said. “It’s really what consumers are looking for because if you walk into any store in Florida and see 50-plus games, or 30-plus games in dispensers in front of you, it’s the ones that stand out at first glance are the ones that people gravitate to.”

Wakasugi says it’s a “constant game” to come up with new games and ways to appeal to consumers. So far the Florida Lottery and Scientific Games appear to be winning that battle.

The Florida Lottery is a top ten lottery nationally, ranking sixth in the country based on weekly per capita spending. That’s behind Massachusetts, Georgia, South Carolina, Pennsylvania and New Jersey.

 

 

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