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limited by state law, not available in

0:50

all states. in

0:52

all states. Joe's Market in Quincy

0:55

is one of the busiest lottery

0:57

retailers in Massachusetts. It

0:59

has all your convenience store staples,

1:01

but the area behind the counter

1:03

is dominated by scratch tickets. At

1:06

least 50 different clear plastic boxes,

1:08

all-numbered, and all dangling colorful tickets.

1:10

Oh, here is another guy you

1:13

want to talk to? One over

1:15

here. Maybe five steps away from

1:17

the counter at the back of

1:20

the store is a little nook.

1:22

A TV, a folding table,

1:24

a waistbasket, and a swiveling

1:26

desk chair. I know it sounds like

1:28

I'm describing an office, but

1:31

it's more like a very modest

1:33

lounge for the regular lottery players.

1:35

Could I ask you a few

1:37

questions for the podcast? Sure. So

1:39

what are you playing right now?

1:41

I play $50 every day. Have

1:43

you won yet? So far, I'll

1:45

spend $300 on the bucket. There's

1:47

nothing. What this man is playing

1:49

is the state's brand new $50

1:51

scratch ticket. He points at the

1:53

serial number on the top right

1:55

corner to show he's keeping track.

1:57

This is ticket number seven for

1:59

today. The other six are in

2:01

the trash bucket already. Six, fifty

2:03

dollar tickets. Oh wow. Go on

2:05

until I'm broke. So why do

2:08

you keep playing? I'm dreaming to

2:10

get that big one. So I

2:12

can retire. I'm 75 years old.

2:14

I don't have a money in

2:16

retirement. Too late to start

2:19

now because I already spent so

2:21

much money. So maybe this one,

2:23

but end up getting broke and

2:25

broke. This man is happy to

2:28

talk money. A couple times he

2:30

opens up his wallet and shows

2:32

me exactly how much he has

2:34

left, how much he's spent. But

2:36

he doesn't want to say much

2:39

about himself, including his name. I

2:41

know that he lives nearby and

2:43

that he works as a mechanic,

2:45

which fits with the dark blue

2:47

work pants and black t-shirt. He

2:50

comes in here on his lunch

2:52

break, part of his daily routine.

2:54

Yes. Yesterday I had 1500. Count

2:56

that? Only about 900 left. 600

2:59

already out. If the wife find

3:01

out? He looks at me and

3:03

draws a hand across his

3:05

throat. You're dead? Done. There

3:07

is a kind of grim

3:09

humor at Joe's Market. Everyone

3:11

here knows the odds, knows the

3:14

payout rate, knows that they're

3:16

probably not getting their money

3:19

back. One man I met calls

3:21

it the Massachusetts State robbery.

3:23

Another calls it organized crime

3:26

with suits. That's what they

3:28

call them, organized crime. Everybody.

3:30

And yet everyone is still

3:33

here, laughing at the folly

3:35

of it all. And you

3:37

know what? I'm here too.

3:40

The well-meaning, presumably liberal journalists

3:42

who rarely gambles himself, gawking

3:45

at this man who casually

3:47

drops half a grand on

3:49

his lunch break. It's weird.

3:51

It's weird that we're all here

3:54

with this thing that we can't

3:56

turn away from. but can't fully

3:58

embrace either. The reason

4:01

I am here is a

4:03

number. A number that once

4:05

I saw, I could not

4:07

stop thinking about. So

4:09

the US Census Bureau

4:12

collects lottery sales figures

4:14

for every state. And

4:16

the key number to

4:19

look at, really the

4:21

metric of any lottery

4:23

success, is sales per

4:25

capita, usually per adult.

4:27

When I first came

4:29

across these figures, I could

4:31

see right away that there's a

4:34

spread. You know, there's some stragglers

4:36

on the low end, like Wyoming,

4:38

North Dakota, where the average adult

4:41

only spends around $50 a year on

4:43

the lottery. Then there are a

4:45

lot of states in the middle,

4:47

California, Texas, Illinois, all in about

4:49

the $300 range, which feels like

4:52

about what I would have guessed,

4:54

if you asked me to. But

4:56

when you get to the

4:58

top of the list, things

5:00

get weird. New York,

5:03

Michigan, Georgia, they're

5:05

all respectable at around

5:07

five or six hundred dollars

5:10

per adult. And then

5:12

there is the loan

5:14

outlier, way off the

5:16

charts, at $1,37. That's

5:18

$1,37 of lottery tickets,

5:20

per adult, sold every

5:22

year in the state

5:25

of Massachusetts. When I

5:27

first saw that number,

5:29

I had a hard

5:31

time believing it. I

5:33

had to check it

5:35

in a few different

5:37

places. Make sure

5:40

I was understanding

5:42

what exactly was

5:45

being measured. It

5:47

just seemed high.

5:49

And also unexpected.

5:51

Like, why us? Why

5:54

here? Number eight for

5:56

the day, the anonymous

5:58

mechanic finally catches is a

6:00

break. So what are you going

6:02

to do with that $100? I'm

6:04

going to buy number two. All

6:06

right. I'm going to buy number

6:09

21. You got 24? Give me

6:11

number 20. He quickly scratches that

6:13

next round of tickets. Then he

6:15

takes one last walk from the

6:17

folding table in the back up

6:19

to the counter. I'm going to

6:21

buy one more. I'll go back

6:23

to work. Then another last walk.

6:25

I'm going to buy another one.

6:27

See what happened. Last walk. No

6:30

wait. I'm going to buy one

6:32

more number 12. That's it.

6:34

This time it sticks. That's

6:36

it. I'm done. Back to work.

6:38

Could I try to ask his

6:40

name one more time as he

6:42

opens the door and he responds

6:45

Jack. Jack. Jack. Thank you Jack

6:47

for talking to me. Which I

6:49

know is not his name. It's

6:51

the name of the store clerk.

6:53

Everyone turns to look.

6:56

Everybody's Jack. Everybody's

6:58

jack, someone says. And

7:01

with that, the man

7:03

is gone. There's a

7:05

way in which gambling

7:07

is the perfect American

7:09

pastime. We love taking

7:12

risks, dreaming big, going

7:14

all in rags to riches.

7:16

There's a way in rags

7:18

to riches. There's a

7:21

magic in rags to

7:23

riches. There's a magic

7:25

in that. But then, why

7:27

all the gloom and shame, the false

7:29

names and hand-ranging,

7:31

why me, lingering in the

7:33

convenience store like an

7:36

ethnographer, observing some exotic

7:38

ritual? Maybe it's because

7:40

gambling is in a way

7:43

deeply un-American. It flies in

7:45

the face of our supposed

7:47

meritocracy, our self-reliance and work

7:50

ethic, our religious fervor. We

7:52

love it, and we hate it. Yet

7:54

over the last generation, the

7:56

place of gambling in our

7:58

society has changed radically. And I

8:00

mean radically. If we go

8:02

back to the time when my

8:05

parents were born, Las Vegas

8:07

had the only casinos

8:09

in America. And there were

8:11

no state lotteries at all,

8:13

let alone sports betting. It was

8:15

a different world. Today

8:17

I would argue that legal gambling

8:19

is more ubiquitous than at

8:21

any time in American history. I

8:24

mean this year's Super Bowl is

8:26

being played at the Caesar's Super

8:28

Dome in New Orleans. Caesar's, as

8:30

in the casino and sports betting

8:33

company, which will also take millions

8:35

of dollars in bets on that

8:37

game. It's already starting

8:39

to feel normal. But

8:41

a few years ago, that would not

8:43

be normal. The

8:49

world we live in

8:51

now was made possible

8:53

by state lotteries. It

8:55

was the lotteries that

8:57

did the slow cultural

8:59

work of normalizing gambling

9:01

decade by decade and

9:03

destigmatizing it to some

9:05

extent. They made all

9:07

this possible. But obviously

9:10

that cultural work remains

9:12

somehow incomplete. We can't

9:14

fully accept what we

9:16

so clearly want. And

9:18

no gambling enterprise captures that

9:20

strange tension, quite like

9:22

the one that brings in

9:24

$1 ,037 every year for

9:26

every adult in the

9:29

state of Massachusetts. From

9:37

GBH News, this is

9:39

Scratch and Win, the making

9:41

of America's most successful lottery.

9:44

I'm Ian Kos. If

9:48

you're sticking around from our last

9:50

series on the Big Dig, know

9:53

that this too will be a

9:55

story about the machinations of state

9:57

government. There will be wonky policy

9:59

and back deals, but mixed

10:01

in with a little

10:04

mystical numerology and organized

10:06

crime. We're going to

10:09

tell the story of

10:11

how this small, super

10:14

liberal, college-filled, and once

10:16

puritanical state somehow created

10:19

the gold standard of

10:21

American lotteries. That story

10:24

both begins and ends

10:26

with our lottery's signature

10:28

innovation. This is

10:33

part

10:36

one,

10:39

The

10:42

Instant Ticket. and ourselves.

10:45

Join me and listen

10:47

to Against the Rules

10:50

on America's number one

10:53

podcast network, I Heart,

10:55

open your free I

10:58

Heart app and search

11:01

against the rules. Listen

11:03

to Against the Rules

11:06

on the I Heart

11:08

Radio app, Apple Podcasts,

11:11

or wherever you listen to

11:13

podcasts. The first modern lottery in

11:15

America started in New Hampshire in

11:18

1964, and it was a world

11:20

away from the scene I observed

11:22

at Joe's Market. Do you want me

11:24

to go back into New Hampshire and

11:26

how preposterous the game was? Sure.

11:28

Jonathan Cohen is the author of

11:30

For a Dollar and a Dream,

11:32

state lotteries in modern America. Yeah,

11:34

I mean, so the New Hampshire

11:37

lottery that started in 1964 was

11:39

rooted in horse racing, but it

11:41

was unrecognizable to a modern lottery

11:43

game. At that time, really the only

11:45

place outside of Vegas that you could

11:47

legally gamble was at the racetrack. And

11:49

there were all kinds of laws limiting

11:52

or prohibiting other kinds of gambling. So

11:54

to get around that, New Hampshire, being

11:56

the first out of the gate, attempted

11:59

to create a based on horse racing. The

12:01

result was a strange hybrid multi-step game. And you

12:03

had to put your name in a little slot

12:05

and then you pull a lever down on a

12:07

box and it cuts your ticket in half and

12:09

then they draw a ticket but the ticket isn't

12:12

actually who wins the lottery. It's like to associate

12:14

a ticket with a horse and then you have

12:16

like a separate drawing for what horse race we're

12:18

going to do and then it's like oh Ian

12:20

Koss like you have horse number seven and number

12:23

seven won that race so now like you win

12:25

the lottery, you win the lottery. Tickets

12:27

went on sale in March. The

12:29

drawing to select the final contestants

12:31

and their horses was in July,

12:33

and the horse race itself was

12:35

in September. So six months from

12:38

purchase to pay off. All this

12:40

to say, the games were slow,

12:42

they were expensive, the prizes were

12:44

small, and they were hard to

12:46

understand. The New Hampshire Lottery was

12:48

not a great success. So the

12:51

next two lottery states, New York

12:53

and New Jersey, started to innovate.

12:55

bringing the game closer to

12:57

something we would recognize with regular

13:00

drawings and no horses involved. Which

13:02

sort of starts this trend of

13:04

just like more faster with bigger

13:06

prizes. But still, a weekly

13:09

drawing is not the same thing

13:11

as instant gratification. And it would take

13:13

a few more years to get there. It's

13:15

hard for me to imagine a

13:18

world without scratch tickets. Americans

13:20

spend more on scratch tickets than

13:22

we do on pizza. More than

13:24

we do on all Coca-Cola products.

13:26

Yet the scratch ticket, as a

13:28

consumer item, has only existed for

13:30

50 years. Not so long ago,

13:32

the very idea of an instant lottery

13:34

was odd, scary even. We're talking about

13:36

huge sums of money at stake, all

13:38

bound up in flimsy pieces of paper,

13:41

sitting on the shelf of a convenience

13:43

store. What if the tickets could be

13:45

copied or rigged? What if they could

13:47

be hacked? What if they could be

13:49

hacked? What if they could be hacked?

13:51

What if they could be hacked? The

13:55

leap to instant

13:57

was perilous.

14:00

and almost didn't

14:02

happen at all.

14:05

In fact, the

14:08

creation of the

14:10

first scratch-off lottery

14:13

ticket unfolds

14:16

something like a

14:18

Rube Goldberg

14:20

machine, a long

14:22

chain of events,

14:24

each of which had to

14:26

happen just so. We'll begin

14:28

that chain in October of

14:30

1957 with a 10th grade

14:32

student in a suburb of

14:35

Detroit named John Kosa. Do

14:37

you remember when Sputnik launched?

14:39

Like did you hear it

14:41

on the news? Oh, absolutely.

14:43

Everybody was listening to it.

14:45

You are hearing the actual

14:47

signals transmitted by the Earth-circling

14:49

satellite. One of the great

14:51

scientific feats of the age.

14:53

You could hear those little

14:55

beep-be-be-be-be-be-be-beeps,

14:57

yeah. And so

14:59

is that part of the inspiration

15:01

for you? Was it almost like

15:03

a patriotic duty to study science

15:05

and computers and be at the

15:07

frontier of knowledge? Well this is

15:09

in the middle of the

15:11

Cold War and everybody from

15:13

the government to universities to

15:15

business got interested in promoting

15:17

sciences. Kosa's high school started

15:19

bringing in guests to lecture

15:21

on different technical fields. And

15:23

one of those lectures was

15:26

about the very young field

15:28

of computer science. Now in 1957,

15:30

a cutting-edge computer weighed upwards

15:32

of 750 pounds. It was

15:34

not something you would have

15:36

at home. But Kosa was

15:38

interested, so he decided to

15:40

build his own. Using surplus

15:43

parts from jukeboxes and pinball

15:45

machines. It was a very

15:47

simple computer that did a

15:49

single task. It was a

15:51

computer that calculated the day

15:53

of the week for the

15:55

date, which of course is

15:57

a fairly simple calculation, but...

16:00

At the time, this was all

16:02

wired up with relays and rotary

16:04

switches and so forth. So you

16:06

go, you know, July 4th, 1776,

16:08

what's the day of the week?

16:10

Well, I don't know, but you

16:12

could answer that question. Ten

16:16

years later, John Kosa was,

16:18

according to him, one of

16:20

the first people in the

16:22

world to hold an undergraduate

16:24

degree in computer science, and

16:26

also one of the first

16:28

to pursue a PhD in

16:30

the subject. I think I

16:32

might have been the 12th

16:34

or 13th in the country.

16:36

And at this point, a

16:38

second and largely unrelated interest

16:40

begins to alter his course

16:42

in life. politics. When I

16:44

was a graduate student at

16:46

University of Michigan in the

16:48

60s, I had published a

16:50

board game involving the Electoral

16:52

College. Kosa was deeply fascinated

16:54

by how we select our

16:57

president, and at the time

16:59

a lot of other people

17:01

were too. His board game

17:03

about the electoral college hit

17:05

the shelves just before the

17:07

1968 election, which remember was

17:09

a truly chaotic election cycle.

17:11

Lyndon Johnson dropped out, Bobby

17:13

Kennedy was assassinated, George Wallace

17:15

was running as a serious

17:17

third-party candidate. So it was

17:19

quite an unusual election. Yeah.

17:21

was a lot of attention

17:23

on the electoral college. On

17:25

the all-important electoral college board,

17:27

and those all-important electoral votes,

17:29

that gives a... With all

17:31

that news coverage, Kosa thought

17:33

that a game about the

17:35

arcane functioning of US elections

17:37

might just break through. It

17:39

was a flop. In any

17:41

case, an executive of this

17:43

game company in Chicago, this

17:46

was a company that made

17:48

supermarket and gas station giveaway

17:50

games. read an article about

17:52

this game that I had

17:54

produced and he thought it

17:56

might be relevant to his

17:58

company's business. The executive invited

18:00

Kosa to Chicago to meet

18:02

and Kosa agreed. They were

18:04

looking for somebody who knew

18:06

something about probability and combinatorics

18:08

and finite mathematics, which as

18:10

it happened was something I

18:12

was very much involved in

18:14

as a student. Now mind

18:16

you that had nothing to

18:18

do with the game involving

18:20

the electoral college, but it

18:22

was just a fortuitous

18:24

case they reached out and they

18:27

found exactly the right person.

18:29

In fact, the first line

18:31

of his Wikipedia page is

18:33

not even about scratch tickets.

18:35

It's about the use of

18:37

genetic programming for the optimization

18:39

of complex problems, whatever that

18:42

is. There's also a paragraph in

18:44

there about how he has spent

18:46

decades, decades, leading a campaign to

18:48

ditch the electoral college and instead

18:51

elect president by popular vote. He's

18:53

still working on that problem. But

18:55

the point is... When Kosa sees

18:57

something that's not working smoothly or

18:59

not working as good as it

19:02

could be, he gets in there,

19:04

whatever the problem is, that's

19:06

a powerful kind of mind. And

19:08

this game company had a

19:11

problem for Kosa. Supermarket

19:13

games were popular in the

19:15

1960s. Stores would give them out

19:17

for free as a little treat

19:20

for customers, and the prizes were

19:22

fairly small, sometimes less than one

19:25

penny. But these games did already

19:27

use a kind of rub-off film.

19:29

They were, in effect, photo scratch

19:32

tickets. And we got to talking,

19:34

and it turned out that they

19:36

were trying to produce a kind

19:38

of game where every ticket could

19:40

be a winner. The way this

19:42

particular game worked is there were

19:44

10 scratch-off spots on the ticket,

19:46

each of which revealed a playing

19:48

card. Ace King Queen Jack. Players

19:50

were allowed to scratch off only

19:52

three spots, and if they got

19:54

a three of a kind, then

19:56

they won a small prize. The

19:58

game company are... had the basic

20:01

technology for printing these tickets

20:03

where they needed help was

20:06

figuring out what to print on

20:08

them. So while still chipping away

20:10

at his PhD, Kosa worked with

20:12

this game company to develop a

20:14

system for generating and printing up

20:17

to 500,000 different ticket combinations, each

20:19

of which had the potential to

20:21

win, had a three-of-a-kind. In the

20:24

1960s, that took some doing. But

20:26

with the stakes fairly low, the

20:28

security around these games was also

20:31

fairly low. Probably in about half

20:33

the games we ran, there would

20:35

be a sort of a little

20:38

run of tickets in a little

20:40

town, and you'd realize that somebody in

20:42

that town figured out some weakness in

20:44

the game that we had missed. For

20:47

example, a player might figure out

20:49

a way to actually see what was

20:51

printed underneath that scratch-off film and know

20:53

where the matching playing cards were. And

20:55

of course we would fix it. for

20:57

the next game. So we never had

21:00

a big problem, but it was a

21:02

knife edge process. I don't know if

21:04

you're thinking about this at the

21:06

time, but it was giving you

21:08

a chance to like beta test

21:10

and experiment with this idea of

21:12

scratch off tickets. And you sort

21:14

of like worked out all the

21:16

bugs. Right, so the biggest single

21:18

game we ran was the one

21:20

for Shell Oil in the United

21:22

States with 150 million tickets, and

21:24

we had no problems at all

21:26

with that game. We had perfected

21:28

a system that could produce a

21:30

very, very secure ticket. Unpredictable

21:32

and unhackable, a perfect

21:35

game of chance. And just

21:37

when it seemed like they had it

21:39

all figured out, this game company

21:41

he was working for, Jay

21:43

and H, went bankrupt. In

21:45

December of 1972, Kosa

21:48

was cut loose. Which

21:50

coincidentally was exactly the

21:52

month when I graduated and

21:54

got my PhD. So now

21:57

you're a newly minted

21:59

PhD. unemployed with years

22:01

of experience in the

22:04

nascent instant ticket

22:06

business. What do you do

22:08

with all that? Well

22:10

again a lucky coincidence

22:13

in the last year

22:15

of J&H's existence we

22:17

actually made some sales

22:19

calls on state lotteries

22:21

trying to see if they

22:23

would like to run a game like

22:25

this. The idea was to take

22:27

this ticket design that Kosa had

22:30

perfected in the form of a

22:32

fun promotional gimmick and

22:35

bring it into the big

22:37

leagues of actual gambling. Instead

22:39

of fractions of pennies, the

22:41

ticket would offer up thousands

22:44

of dollars. That is, if

22:46

they could find a state willing to

22:48

try it. In 1972, there were

22:50

just seven states operating lotteries,

22:52

and it turns out... None

22:54

of them were interested in

22:56

a scratch ticket. It's hard

22:58

to imagine passing on that

23:00

pitch now, but you have

23:02

to understand that these early

23:05

lotteries were fragile and extremely

23:07

conservative agencies. Gambling at the

23:09

time was largely associated with

23:11

the underworld, the mob. Mike,

23:13

you don't come to Las

23:15

Vegas and talk to a

23:17

man like Moe Green like

23:19

that! In 1972, just as

23:21

Kosa was first pitching his

23:23

idea for a scratch ticket,

23:26

the Godfather was the number

23:28

one movie in America. It

23:30

showed the extortion and murder

23:32

lurking beneath the glitz of

23:34

Vegas, the almost magnetic attraction

23:37

between gambling and crime. Don't

23:39

ever take sides with anyone

23:41

against the family again. This

23:47

was a shadowy business the

23:49

state was waiting into in

23:51

any whiff of irregularity a

23:54

fixed drawing a forged ticket

23:56

would shatter the public's trust

23:58

again Jonathan Cohen They were

24:00

so concerned about organized crime and

24:03

this imprimatura of legitimacy that they

24:05

didn't get like people who designed

24:07

games for a living to run

24:10

the lotteries, they got like FBI

24:12

agents. In fact, the directors of

24:14

the first three state lotteries were

24:17

all former FBI men. To assure

24:19

the public that the games were

24:21

fair, even if they were designed

24:24

poorly. That was the focus. Security,

24:26

integrity, not innovation, and certainly not

24:28

combinatorial mathematics. But in

24:30

the 1970s, the focus would

24:33

start to change, because just

24:35

as the specter of organized

24:37

crime forced those early lotteries

24:40

to be cautious, it soon

24:42

would force them to be

24:44

aggressive and competitive. One state

24:47

in particular would lead that

24:49

charge. And John Kosa, unemployed

24:52

and looking for an opening,

24:54

would join them. The

25:11

Massachusetts lottery launched

25:13

in 1972, offering only

25:16

a single product. A

25:18

weekly drawing, so generic,

25:21

it was called simply

25:23

the game. By 1973,

25:26

excitement around the game

25:28

had already worn off.

25:30

Sales were in decline.

25:32

But it's not because

25:35

there weren't people who

25:37

wanted to gamble. WGBH ran an

25:39

hour-long special on the issue of

25:42

gambling. Good evening, I'm Alan Raymond,

25:44

and this is State Line. Tonight

25:46

we'll be discussing proposals to legalize

25:49

gambling in Massachusetts. The host interviewed

25:51

a whole range of experts and

25:53

public officials with a whole range

25:56

of opinions, but they could all

25:58

agree on one thing. illegal gambling

26:00

is a way of life in

26:02

Boston and across the Commonwealth. Illegal

26:05

gambling run by organized crime

26:07

was everywhere. Two billion dollars

26:09

a year is being gambled illegally.

26:11

We've averaged about 500 arrests a

26:13

year. It was a big problem.

26:15

Illegal gambling is wrong. Illegal gamblers

26:18

have ways of making people pay.

26:20

And no amount of law enforcement

26:22

could solve it. Perhaps. The most

26:24

you can hope to do with

26:26

such a public desire to indulge

26:28

is to try to keep it

26:30

at some kind of tolerable

26:32

level. The discussion of gambling

26:35

policy in the 70s really

26:37

reminds me of the discussion

26:39

around drug policy in more recent

26:41

years. We were losing the war

26:43

on gambling, just like we lost

26:46

the war on drugs. The demand

26:48

was just too strong. And

26:50

this looming presence of illegal

26:52

gambling exerted two opposing forces

26:55

on the state lotteries. I've

26:57

mentioned how it required caution

27:00

to avoid any appearance of

27:02

corruption, FBI agents as lottery

27:04

directors. But on the other

27:06

hand, it required urgency, action.

27:08

Because one of the reasons to

27:11

have a state lottery in

27:13

the first place was to

27:15

put those illegal operations out

27:17

of business. And in 1973,

27:19

the state's brand-new lottery with

27:21

its single weekly drawing wasn't

27:23

going to cut it. If

27:25

legalization is to have any

27:27

effect on organized crime, better

27:29

services have to be provided by

27:32

the legal operation. That last

27:34

voice in the radio special

27:36

was Ted Harrington, who served

27:38

for several years as the

27:40

head of the region's organized

27:42

crime strike force. Most people

27:44

like to gamble, and yet...

27:47

It was declared illegal. That's

27:49

Harrington speaking today. As

27:52

Al Capone said, I'm performing

27:54

a public service. I'm

27:57

giving the public what they

27:59

want. And at the initiation

28:02

of the lottery, the underworld

28:04

was still providing better

28:06

services. In the early 70s,

28:08

Harrington had helped to develop

28:10

a key mafia informant named

28:13

Vincent Teresa, known to his

28:15

critics as Fat Vinny, the

28:17

stool pigeon. The two would

28:20

meet in guarded motel rooms

28:22

around the state to discuss

28:24

new intelligence or prepare for

28:27

testimony. Testimony that would influence

28:29

the national conversation around organized

28:31

crime. Vincent Charles Teresa has

28:33

28 years experience in the

28:36

criminal world. Teresa made national

28:38

news in 1971 when he

28:40

testified before a Senate committee

28:42

and the coverage focused on

28:44

his main message. I'm talking

28:46

about a definite syndicate operation

28:48

that strictly starts with gambling.

28:51

It all starts with gambling.

28:53

All starts with gambling. All

28:55

starts with gambling. Did his

28:57

testimony inform your thinking? Well,

28:59

of course, it shaped everybody's

29:02

conception of organized

29:04

crime. Teresa once described

29:07

gambling as, quote, a

29:09

chain-link fence that stretches to

29:11

every place in the world,

29:14

the standby and the foundation.

29:16

From it comes the corrupt

29:19

politician and policeman, the bribes

29:21

and payoffs, and sometimes murder.

29:23

If you could crush gambling,

29:26

you would put the mob out of business.

29:28

They must have daily action, legal

29:30

betting on all forms of gambling.

29:33

This is why Harrington and

29:35

others were pressuring the state

29:37

to be much more aggressive

29:39

in the legal gambling services

29:41

they offered. We're proposing to

29:43

compete with them in an

29:45

area which we feel we

29:47

can compete with them. At

29:49

that time, numbers rackets and

29:51

sports bookies could offer their

29:53

customers daily action. tax-free winnings,

29:55

better odds, better payouts, anonymity,

29:57

and the ability to bet

29:59

on credit. So why on earth

30:01

would you play the boring state

30:03

lottery? I'm sorry we have run

30:05

out of time. I'd like to

30:07

thank you all for being here

30:09

tonight and thanks to all of

30:11

you who called. This is the

30:13

Eastern Public Radio Network.

30:16

In 1973, it was time

30:18

for the lottery to up

30:20

its game, to provide what

30:22

Al Capone would call a

30:24

public service, but wrapped up

30:26

in a new and legal

30:29

packaging. John Kosa. The unemployed

30:31

computer scientist had the perfect

30:33

idea for them, the instant ticket.

30:35

Tukosa, the potential of this

30:37

game design seemed obvious. You

30:40

could print millions of lottery

30:42

tickets, ship them to every

30:44

corner of the state, and

30:46

package within each one would

30:48

be suspense, entertainment, and the

30:50

promise of instant riches. So after

30:52

he was laid off, he

30:54

and another jobless colleague, Dan

30:56

Bower, decided to start their

30:58

own company. Scientific Games. It

31:00

was just the two of

31:02

them, operated out of an

31:04

apartment in Ann Arbor, Michigan,

31:06

and a kitchen table in

31:09

Chicago. They started going back

31:11

to those same lotteries they

31:13

had pitched before, but this

31:15

time, there was one that

31:17

was ready to hear them

31:19

out. Massachusetts. Even better, the

31:21

director of the Massachusetts Lottery.

31:23

was no FBI agent. The

31:26

director there was a PhD

31:28

in mathematics, so he happened

31:31

to really understand the scientific

31:33

basis for what we were

31:35

doing. Everyone called the lottery

31:38

director doctor, Dr. Peralt, and

31:40

in addition to being a

31:42

mathematician, Dr. Peralt also happened

31:45

to be an expert bridge

31:47

player who once took his

31:50

eight children on a family

31:52

vacation to Las Vegas in part

31:54

to study the wheels and cards

31:56

as illustrations of statistics. So

31:59

when John Ko's PhD in computer

32:01

science arrived in Massachusetts, things

32:03

seemed promising. The man in

32:05

charge spoke his language, combinatorics

32:07

and all, and the people

32:09

around him were eager to

32:11

try something new. The Massachusetts

32:13

lottery was very innovative, that

32:15

is, they were prepared to

32:17

try an instant game. There

32:19

was just one problem. They

32:22

had already given a contract

32:24

for the instant game to another

32:26

company. Another company had beaten them

32:28

to the same idea. It was

32:31

not a scratch ticket exactly that

32:33

this other company was offering. It

32:36

was much more low-tech, like an

32:38

advent calendar with little paper flaps.

32:40

But still, it claimed to offer

32:43

the same basic novelty of an

32:45

instant reveal. The brand-new

32:47

tickets, it turned out, were already

32:50

on their way. And Kosa could

32:52

see immediately that those tickets were

32:54

deeply flawed. And had they run

32:56

it, it would have been a

32:59

disaster. And there would never

33:01

have been an instant lottery

33:03

in any state for decades.

33:05

It would have been a

33:08

totally discredited idea at that

33:10

point. The genius of an

33:12

instant ticket was that it

33:15

offered something no illegal operation

33:17

could. And it did that

33:19

by playing to the state's

33:22

advantage. Technology. The only

33:24

way a ticket like this could work

33:26

was if it was so sophisticated, no

33:28

one could copy it, no one could

33:30

alter it, and no one could hack

33:32

it. The Massachusetts Lottery had

33:35

already rejected nearly 20 prototypes by

33:37

the time they settled on a

33:39

final design, the one with the

33:41

paper flaps. Only to have John

33:43

Kosa, this recently graduated whiz kid

33:46

with a dimpled chin and a

33:48

comb over, show up and tell

33:50

them it was flawed. So on the

33:52

spot they made a deal. Kosa

33:54

could take home 50 tickets and

33:56

do his best to prove they

33:58

could be hacked. They

34:01

gave us the tickets. I went back

34:03

to Ann Arbor, then went back to

34:05

Chicago, and they gave us a

34:08

week or so. Armed with

34:10

his obsessive personality, plus years

34:12

of experience, playing cat and

34:14

mouse with would-be scam artists

34:16

on his supermarket games, Kosa

34:18

got to work. The competitor's

34:20

ticket was made of pretty

34:22

thin paper, with flap doors

34:24

over the hidden numbers, held

34:26

down by glue. Kosa's goal

34:28

was to reveal those numbers

34:31

without visibly altering the ticket.

34:33

And within 24 hours, he

34:35

had done it. Not just once,

34:37

not twice, but three separate ways.

34:39

As I said, they were extremely

34:42

flimsy tickets. So the two salesmen

34:44

got back on a plane and

34:46

flew back to Boston. This

34:48

time, Dr. Peralt was waiting

34:50

on the runway to greet them

34:53

and carry their bags. Everyone

34:57

reconvened at lottery headquarters. Probably

34:59

half a dozen men in

35:01

dark suits gathered around a

35:04

conference table, eagerly awaiting the

35:06

presentation. Remember, they had not

35:08

only given a contract to this

35:11

company to print the tickets, tickets

35:13

were already printed, and in the

35:15

warehouse, ready to be issued, and

35:18

there were 25 million of them.

35:21

Patiently, Coza walked the lottery

35:23

staff through each potential vulnerability.

35:25

One of them involved a

35:27

cystoscope, which is a medical

35:29

device. A cystoscope has a

35:32

tiny lens on the end

35:34

of a thin flexible tube.

35:36

A doctor might use it

35:38

to examine the inside of

35:40

a patient's bladder. Coza used

35:42

it to appear underneath the

35:44

ticket's flap doors. That was

35:46

one way in, and these

35:48

tickets were printed on just

35:50

really... Ordinary paper with line

35:53

printers, or line printers like

35:55

a typewriter, it would make

35:58

a physical bang impression. and

36:00

dent the paper. So method number

36:02

two was that if you ran

36:04

the tickets through a photocopier, that

36:07

raised impression was just prominent enough

36:09

that the hidden numbers would come

36:11

out in the copy. The danger

36:13

in all this is that any

36:15

convenience store clerk with a stack

36:18

of tickets would be able to

36:20

figure out which ones are the

36:22

winners and decide who gets them.

36:24

Again, lotteries were terrified of losing

36:27

credibility, and this would have done

36:29

just that. Now the average

36:31

convenience store clerk might struggle

36:33

with the first two methods

36:35

Kosa demonstrated, especially the cystoscope.

36:37

And so to drive the

36:39

point home, he had a

36:41

final foolproof technique. In a

36:43

dramatic demonstration, Kosa opened a

36:46

bottle of fresca, something you

36:48

could certainly find in the

36:50

average convenience store. He poured

36:52

the fresca on the ticket

36:54

and the glue, which was

36:56

supposed to be the ticket

36:58

sacred seal. Simply let go.

37:00

You could peel the whole thing

37:02

apart, read the numbers, and

37:04

glue it back together again.

37:07

The lottery staff were horrified.

37:09

It was compelling, let's put

37:12

it that way. When the

37:14

demonstration was over, there was

37:16

no doubt. The lottery canceled

37:18

their existing contract and put

37:21

out a new bid. John

37:23

Coz's company, Scientific

37:25

Games, won the contract.

37:27

Their product. which used heavy

37:30

paper, an indentation-free printer, and

37:32

of course, that famous shiny

37:34

metallic film, became the world's

37:37

first scratch ticket. Now, mind

37:39

you, this was the very first

37:41

ticket, as you can see, it

37:43

was not very artistic. Kosa kept

37:45

one of those original tickets, preserved

37:47

like a rare plant specimen in

37:49

a block of solid resin. Yeah,

37:51

I mean, the first ticket looks

37:53

more like... a receipt or something.

37:55

It's not a receipt. It's not

37:57

very glamorous looking at all. It's

37:59

not. glamorous at all. Very

38:01

boxy and wordy. It says one

38:03

in five tickets wins and

38:05

then it says using edge of

38:08

coin, rub square spot at

38:10

right and the number appears. So

38:12

we had to tell people that.

38:14

So rub the spot, then rub

38:16

the four round spots and if

38:18

four matches you win $10,000 and

38:20

with three you win a thousand

38:22

and two you win $10 dollars

38:24

and two you win $10 dollars

38:26

and one match you got two free

38:29

tickets. I love that you

38:31

have to explain on there, that

38:33

you have to use a coin,

38:35

and voila, a number will appear.

38:37

I like the fact that you

38:39

had to explain that is hilarious.

38:42

Absolutely. Nobody had seen a ticket

38:44

like this before in a state

38:46

lottery. On May 29th, 1974,

38:48

just over 50 years ago,

38:50

people walked into convenience stores

38:52

and gas stations around the

38:55

state and saw that ticket. Could

38:57

you just introduce yourself?

38:59

Hi, my name is Geraldine

39:01

Stewart. I live in Springfield,

39:03

Massachusetts. And can you take me

39:06

back to 1974 and how you

39:08

first heard about this thing called

39:10

an instant ticket? I don't remember

39:12

exactly how I heard about it. I'm sure

39:14

it was on the news. So I thought

39:16

I would go out and buy a ticket.

39:18

Do you remember the store you went to?

39:20

I believe it was the pride station

39:23

in East Long Meadow. It's a gas

39:25

station and they also sell a lot

39:27

of re tickets there. So I thought,

39:29

well, hey, I could use that, so

39:31

I'll try it. And I was lucky.

39:33

Stewart won $1,000 on that first ticket.

39:35

And she wasn't the only one playing.

39:38

These people were ready. They knew it

39:40

was coming. Like they were lined up

39:42

in the morning when you opened? Yep,

39:44

lined up. In 1974, Glenn Myet ran

39:47

a country store in Hanover Mass. People

39:49

would scratch him immediately on the count,

39:51

uh... Some would take two steps away

39:54

and scratch it on an ice cream

39:56

chest some would feel like they had

39:58

to go outside and sit in your

40:00

car. He remembers the very first customer

40:03

of the day was a lottery regular

40:05

and she just kept coming back up

40:07

for more tickets than going back to

40:09

scratch them in the freezer section. It

40:12

was just crazy. It's like I thought

40:14

she was going to lose her mind.

40:16

The appeal of the instant game is

40:18

the same appeal as the slot machine.

40:21

There's no waiting. So if you don't

40:23

win, you can always try again. And

40:25

if you do win, well, now you've

40:27

got more money to play with. It

40:30

was self-feeding in a way that

40:32

no lottery had ever been before.

40:34

One liquor store owner described the

40:37

scene as instant insanity. A pharmacy

40:39

set up a separate sales counter

40:41

at the back of the store

40:44

just for lottery tickets, so non-lottery

40:46

customers wouldn't be disturbed by the

40:48

unruly crowds. Within a day, stores

40:51

across the state had a run

40:53

out of tickets and were

40:55

waiting to be resupplied. Just

40:57

like it fast. They don't want

41:00

to wait. It's for drama in

41:02

it. It's like fast food. You

41:04

can pull up it in a

41:06

McDonald's, you don't even have to

41:08

get out of your car. Give

41:10

me this, that, and the

41:12

other thing. Fast and snappy.

41:15

Sometimes, well, if I scratch the

41:17

ticket, if I'm sitting in my car

41:19

after I buy it, will it be

41:21

a winner? Or will it be a

41:23

winner when I scratch it when I'm

41:25

home? That

41:27

first ticket also had a secondary

41:30

game on it where you scratched

41:32

a spot to reveal a single

41:34

letter. If you then collected all

41:37

the letters to spell the word

41:39

instant, you won $10,000. The catch,

41:41

which was not well advertised, was

41:43

that only one out of every

41:46

half million tickets had the letter

41:48

S. Sending players with all the

41:50

other letters on a frantic statewide

41:52

search for stores that were rumored

41:55

to have the mythical S. The

41:58

state sold over 20 million tickets

42:00

in two months. Did you realize

42:02

that you had created something that

42:04

would be huge? Absolutely. That would

42:07

spread? In fact when I submitted

42:09

the business plan to our local

42:11

bank I had predicted that we

42:13

would sell six million dollars in

42:15

tickets the first year and the

42:17

vice president of the bank that

42:20

I was working with at the

42:22

time he said I can't submit

42:24

this to the... loan committee, they

42:26

will just laugh at this. So

42:28

we cut it back to a

42:31

million and the first year sales

42:33

was six million dollars. Wow.

42:35

And that was because the other

42:37

lotteries in 75, I think

42:39

there's five or six other

42:41

state lotteries simultaneously started instant

42:43

games. The other states had

42:45

waited for someone else to

42:47

take the plunge, but once

42:49

they saw what was happening

42:51

in Massachusetts, they jumped right

42:53

in. We knew we had

42:55

the world by the tail. Do

42:58

you still play scratch tickets? Oh

43:00

sure. I haven't been as

43:02

lucky though. Again, Geraldine Stewart,

43:04

the thousand dollar winner.

43:07

Here's the question I guess.

43:09

Do you think you've spent

43:11

more than a thousand

43:13

dollars on lottery tickets

43:15

at this point? Yes, absolutely. But

43:17

I wanted to tell you

43:19

that my son never bought

43:21

a scratch ticket in his life

43:24

and he's 50. And he decided

43:26

a day ago, he had some

43:28

extra money. So he bought a ticket.

43:30

Yeah. He won $500 on that

43:32

one ticket. Wow. Did the first

43:34

scratch ticket and he won

43:36

$500? Did you tell your son

43:39

that he should quit while he's

43:41

ahead and keep the money from

43:43

that first ticket and never buy

43:45

another? No. Now

43:47

I know my son. Today

43:50

Americans spend over

43:52

$100 billion a year

43:54

on lottery tickets. Almost

43:57

two-thirds of that

43:59

total. spent just on scratch

44:01

tickets. Yes, the powerball jackpots are

44:03

what you see in the window

44:06

at the convenience store. They get

44:08

more press and the keynote numbers

44:10

are always flashing on the TV

44:13

screen in the corner. But the scratch

44:15

ticket is the bread and butter

44:17

day in day out game that

44:19

keeps the money flowing. We spend

44:21

more on scratch tickets than we

44:23

do on movie tickets, concert tickets

44:25

and sports tickets combined. At five,

44:27

twenty, maybe fifty dollars a pop,

44:29

that is a lot of scratch

44:31

tickets. And, um, do you come

44:34

in here every day? Of course

44:36

I do. I live right across

44:38

the street. At Joe's Market in

44:40

Quincy, for every hardcore player

44:42

I meet, like the man

44:44

who called himself Jack, there

44:46

are many, many casual players.

44:49

Usually cigarettes and the newspapers,

44:51

but... The people who stopped by

44:53

for cigarettes or to get cash

44:55

from the ATM for the car

44:57

wash. And the tickets are right

44:59

there. So why not try your

45:02

luck? Have you, do you play

45:04

other lottery games or

45:06

just scratch tickets? Just

45:08

scratch tickets. I'm not a

45:11

lot of those people. Why this

45:13

ticket of all the options up

45:15

there? Because it caught my

45:17

attention and I just decided

45:19

to buy it. It was a

45:21

whim. Yeah. And what are you,

45:23

what are you playing today? 20 dollar

45:26

cash word and two ten dollar

45:28

ones. How do you pick, I

45:30

mean there's so many tickets up

45:32

there. These games have changed since

45:34

1974 in important ways, which we'll

45:37

get to later in the series.

45:39

They're not the same boxy wordy

45:41

ticket with just four spots to

45:43

scratch and a max prize of

45:46

ten thousand dollars. But the basic

45:48

appeal remains the same. It's just

45:50

been a hit. scratch tickets.

45:52

People want scratch tickets. Absolutely,

45:54

you want to win on spot.

45:57

Is that why you still play? Yeah,

45:59

lack of brains. There is this

46:01

innocuous quality to scratch

46:03

tickets. They don't really

46:05

feel like gambling at all.

46:07

When I was a kid,

46:09

my stepdad's family would throw

46:12

a big Easter party, but

46:14

the prize for the egg

46:16

hunt was not candy or

46:18

knickknacks. It was scratch tickets.

46:20

Every kid ended the hunt

46:22

with a lap full of

46:24

scratch tickets. I've heard so

46:26

many stories like this. the

46:28

stocking stuffers, the work party

46:31

gifts. These tickets have found

46:33

their way into every corner

46:35

of life and of course nowhere

46:37

is that more true than the

46:39

place where it all began. Sorry

46:41

could you tell me about this

46:43

dream involving the number two? I

46:45

just scratched it too and underneath it

46:47

was four million but I mean like

46:50

I said it's a dream so... But you put

46:52

some weight in it. True you know. You want

46:54

to believe that. If

47:02

you've ever been to this

47:05

state, you know we just

47:07

love to celebrate our distinctions.

47:09

The first public school in

47:11

the country, the first public

47:13

park, the first newspaper, the

47:15

first college, the cradle of

47:18

liberty, the best educated state

47:20

in the nation. We even

47:22

had bumper stickers made after

47:24

the 1972 election when we

47:26

were the only state that

47:28

voted against Nixon. They said,

47:30

Don't blame me. I'm from

47:33

Massachusetts. And yet, for all that

47:35

chest thumping, no one here seems

47:37

to talk about the fact that

47:39

by pretty much every measure,

47:41

we have the most successful

47:43

and innovative lottery in the

47:46

nation. The gold standard. Why

47:48

isn't that on a bumper sticker?

47:50

Why isn't the invention of the

47:52

scratch ticket celebrated on the

47:54

wall of the airport terminal

47:56

alongside the telephone in the

47:59

game of... basketball. This

48:01

is a story we've been looking

48:03

away from for a long

48:05

time, and it doesn't end

48:08

with that first instant ticket.

48:10

It took the better part

48:12

of two decades for the

48:14

Massachusetts lottery to crawl its

48:16

way into that number one

48:19

spot, bringing in more dollars

48:21

per capita than any other state

48:23

by a lot. That is the story

48:25

we will tell over the

48:28

rest of the series. It's

48:30

a story of power, money,

48:33

politics, crime, and vaudeville. You

48:35

made me love you. I

48:38

didn't want to do it.

48:40

In episode two, we meet

48:42

the singing, dancing state treasurer

48:45

who got the lottery

48:47

started in the first

48:49

place. That episode's out

48:51

now, so why not

48:54

give it a chance? The

48:58

series is produced

49:00

by Isabelle Hibbert

49:03

and myself, Ian

49:05

Koss. It's edited

49:07

by Lacy Roberts.

49:10

The series is

49:12

produced by Isabelle

49:15

Hibbert and myself, Ian

49:17

Koss. It's edited by

49:19

Lacy Roberts. The editorial

49:22

supervisor is Jennifer McKim

49:24

with support from Ryan

49:26

Alderman. May Lay is

49:28

the project manager and

49:30

the executive producer is

49:32

Devin Mafric Robbins. Special

49:35

thanks to Jonathan Cohen for helping

49:37

me connect with John Koza and

49:39

just in general for sharing so

49:42

much material and insight from his

49:44

own research. Cohen's book for a

49:46

dollar and a dream is really

49:49

a fascinating and important work on

49:51

this topic. Thanks also to the

49:53

staff of Joe's Market in Quincy

49:56

and Mayette's country store in Hanover

49:58

for being so welcoming. You didn't

50:00

have to let me hang out

50:03

and talk to your customers.

50:05

It means a lot that

50:08

you did. The artwork is

50:10

by Bill Miller and Mamie

50:13

Howabawa. Our closing song is

50:15

You Made Me Love You, performed

50:17

by Massachusetts state

50:19

treasurer Bob Crane.

50:22

Scratch and win is

50:24

a production of gbH

50:26

news and distributed by

50:28

PRX.