O'Brien also retooled the lottery's relationship with its other customer: retailers. Store owners hated scratch games. Yes, they'd earn a 5 percent commission for every ticket sold, but they had to pay for all those tickets upfront. By 1985, at O'Brien's direction, the state was giving the tickets to retailers and collecting only after the tickets had been sold.
"The response was instantaneous," he says. "We went from 2,600 retailers to 5,000 in one year."
Steve Saferin, left, and Jimmy O'Brien with some of the 17 billion scratch lottery tickets that Scientific Games prints each year for state governments.
(Erik S. Lesser For The Washington Post)
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That was it. Massachusetts has scratched like it had the hives ever since. In 1980, the year that O'Brien started, the cards brought in $54 million. By 1985, it was $158 million. Then it doubled again, and again, and again. In 1995, $1.6 billion in scratch cards were sold in the state. Nobody had seen anything like it. Across the nation, lottery officials watched the tallies and drooled. What is going on there? Reps were dispatched to find out.
"Massachusetts was the mecca," says Steve Casebeer, a marketer with the Kentucky lottery. "Everyone was there, asking, 'How can I take this back to my own state?' "
"It was like a wagon train," O'Brien remembers. "They all came. From England, from Spain, from France, from South America. I remember the state of Ohio. Those guys stayed for a couple weeks."
The year O'Brien retired, in 2001, the Massachusetts lottery sold $2.7 billion worth of tickets. Instead of doing $54 million in 12 months, the state was doing about $54 million every week.
"I've always said that he's one of the most valuable public servants that Massachusetts ever hired," says Fred Newton, a former product manager at the lottery, who worked with O'Brien.
That might understate it. The O'Brien approach has now been imitated all over the world and it's heaved fortunes into state and local coffers. Until he joined Scientific Games, O'Brien earned the less-than-tycoonish salary of a state employee, less than $100,000 a year. If you compare what he was paid in total with the billions he brought in, dollar for dollar, Jimmy O'Brien is one of the most valuable public servants in U.S. history.
Hooked on Scratching
There's a bodega in Manhattan's TriBeCa neighborhood called Good Luck Candy and Tobacco, where dozens of different scratch games cascade down from a shelf behind the candy counter. Good luck, it turns out, is rare here. All the players who trickle in one recent evening say they've hit a $40 winner, or better, but no one claims to be in the black.
Not Jesus Velasquez, a young guy with thick glasses who left with a card called "Word Game." "I'll buy $2 games now and then," he says. "I'm definitely down. But I've got a friend at work who spends a lot on these tickets. He's way down. And he can't stop."
Asking Jimmy O'Brien, or executives at Scientific Games, how they feel about problem scratchers is like asking a Ford Motor Co. executive how he feels about drunk drivers. Like a lot of products, this one is harmful when misused, they say. And they prefer to focus on the unimpeachable causes, such as education, that are funded by billions in scratch revenue.
Without question, scratch cards are insidiously good at delivering exactly the sort of thrills that keep gamblers, pathological or not, coming back for more. Losing tickets are all designed to produce what's known in the business as "heartstoppers," a moment when it seems as though you are on the verge of winning. It's an illusion, of course. If you scratch just enough to reveal the serial number on any card, you can hand it back to the retailer, who will scan it and tell you if you won.
The cards pay off frequently -- about one in four yields something -- and at random, which turns out to be a devastating combination, as the pioneering behavioral psychologist B.F. Skinner learned years ago. In experiments, Skinner taught rats to feed themselves by putting them in a box with a lever that, when pressed, dropped in food pellets. He discovered that if you rewarded the rats at random intervals and in varying quantities they would hop on that lever long after you shut off the flow of food.
"It was hard to get them to stop, actually," says Nancy Petry, a professor of psychiatry at the University of Connecticut and author of a book on pathological gambling. "Scratch cards are built on the exact same principles of behavior. Make the prizes frequent and unscheduled and vary the sizes, and people will keep gambling."
It's the formula honed by the makers of slot machines, the biggest profit center of nearly every casino. In a way, what O'Brien and the rest of the lottery business did was figure out a way to offer the thrills and perils of a one-armed bandit in a 7-Eleven. And like the slots, the fine-tuning on scratch tickets extends right down to the gaudy art on the front.
" 'Fat Cat' is one of our best sellers," says Dennis Miller, Scientific Games' director of marketing, pointing to a ticket that features a cartoon of an overweight feline. "You take a fat cat and put him in a tux, or give him a cowboy hat, people love it. We don't know why."
Scientific Games is, among other things, a lab where scratch marketing is constantly honed. It's a little bit art, a little bit science, and every state with a lottery is forever looking for new ways to separate players from their money. What's sold is hope, in the guise of an impulse buy.
The day that Steve Charles gave that tour of the plant at Scientific Games, the press was cranking out cards at a speed so fast you couldn't tell what was being printed. Until you got a look at those mammoth spools at the end of the line. The work in progress was tickets for the Illinois lottery, featuring a strikingly irreverent cartoon of Abraham Lincoln, grinning like a drunk. The game was called "Change Your Life."
