Lottery Lowdown: Inside the scratch-off industry

An employee at Pollard Banknote Ltd. in Ypsilanti looks over some recently printed lottery tickets. (WWMT/Cody Combs)

“Every lottery has its own history and philosophy on what is going to best suite their players,” said Doug Pollard, the chief executive officer of Pollard Banknote Ltd.

Pollard’s company churns out 14 billion scratch-off tickets each year from its Ypsilanti factory.

“I think what most people don’t realize when they go into a convenience store is how much thought goes into these tickets,” Pollard said.

Make no mistake, the state of Michigan is a major customer of Pollard Banknote, but Pollard’s clients include statess across the U.S., along with countries all over the world, including Australia, Taiwan, Canada and France, to name a few.

Pollard said each state and country has different ways of setting odds, and in some countries it’s actually codified into law.

“The Swedish national lottery has a payout of 49 percent,” he said. “Their formulas and ratios aren’t very favorable to players,” he added.

As for Michigan, it’s important to note that the odds promoted by different scratch-off games are actually, in most cases, average overall odds – applying to all the tickets made, not just the tickets sold from specific rolls in specific stores. The odds also often factor in winning only to get your money back for the ticket purchased.

Many scratch-off buyers also are unaware that some of the prizes for the tickets might have been awarded long before customers buy the tickets. However, you can actually see which prizes remain for various scratch off games on the Michigan Lottery’s website.

According to Pollard, the winning tickets are randomized and fairness is the name of the game, but he respects the various superstitions some scratch-off buyers have.

“For some people part of that entertainment is the superstition process that goes with it,” he said. “If you want to indulge in that in various ways, there’s nothing wrong with that,” he added, referring to those who have “lucky stores” from which they buy tickets.

Pollard also said in his research, most scratch-off tickets are impulse purchases.

“You were somewhere where it was being sold and you saw it, and it caught your attention, and for the that moment you felt lucky,” he said.

Even in the world where internet lotteries are enjoying unprecedented success, the scratch-off business is incredibly strong.

Pollard said Michigan and other states are constantly looking for ways to appeal to a new generation of scratch-off players by using themes they might be familiar with, such as video games. In one instance, Frogger is being made into a scratch off.

“From a responsible gaming standpoint, we like it when a lot of people play a little,” Pollard said.

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