The history and future of scratch cards

Scratch cards (or scratch tickets as they’re called in the USA) offer the ultimate lucky break. We’ve all heard the stories about someone who wins one million pounds after picking up a card with loose change. With cards stocked in stores on the high street they seen by many as the reason for the spread and popularity of gambling over the last few decades.

  • Joan Ginther, a retired maths professor, bought four different scratchcards from the same store on different occasions and won over $20 million.
  • Early scratch cards used toxic material. These days, the scratch-off portion is made from a special non-harmful UV ink.
  • UK company Camelot sold the first augmented reality scratch cards in 2014. The Christmas themed cards gave smartphone players extra games to play.
  • Microgaming is currently working on releasing virtual reality scratch cards - the next technological leap for this game.

It used to be the poker pro working the Las Vegas tables like a cold blooded shark who picked up gambling's big prizes. Now it’s Carol from down the road buying a couple of scratch cards with her weekly shop, or even playing on her smartphone as she rides the bus to work, hitting a few random cards before her morning coffee.

The invention of scratching

But the true story of how scratch cards came to be so popular is a classic 21st-century tale of entrepreneurial spirit and the opportunity afforded by technology. Before Google and Facebook took over the internet and everyone’s lives in the process, the 1970s brought new opportunities to young men and women all over the world, and not all of them were in the form of music and soft drugs.

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The computer age was dawning and one young man saw a chance to change how people gamble: a low cost randomized game generated by computers, with instant payouts provided. Suddenly there was no more waiting around for the weekend to see if your lottery numbers were winners. This man was John Koza, and after his eureka moment he soon graduated with a degree in computer science, meeting marketing whizz-kid Daniel Bawer a year later. In 1974 the two men formed the Scientific Games Corporation and the pair would work together and ride the coming tech revolution, creating a multibillion-dollar industry.

Massachusetts takes the lead

Massachusetts was the first state to sell their cards, with Bawer’s marketing skills persuading them to incorporate the cards into their state lottery. It was a huge success. Average weekly income quickly doubled from $1 million in sales to over $2.7 million.

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Many other states soon followed suit, and within a couple of years scratch cards were being sold all over North America. However, in 1985 an inventor by the name of Cal Tigner revolutionized the business model and brought scratch cards to the high street.

The invention was simple, a clear plastic dispenser by the till, the type you see in every high street grocery store. Until that point, cards were stored away and had to be specially requested by the customer. The first dispenser was installed in the autumn of 1985, with the first significant order coming on Valentine's Day of 1986 with 1,000 units being sold.

By the turn of the century, 200,000 units were being sold each year by Tigner’s booming company. The Take-a-Ticket invention was what the industry needed to conquer the world, harnessing that impulsive desire we all share to see if ‘today’s my lucky day’, creating a market that now generates tens of billions in revenue each year.

The scratch card betting boom

It's difficult to underestimate how huge the scratch card phenomena has become. In the United Kingdom they arrived in a big way in 1995. Whilst Blur and Oasis were playing on every Sony Walkman, scratch card popularity hit a new high. The UK’s National Lottery launched a whole variety of scratch cards in stores nationwide, selling them alongside lottery tickets, which had only been running for under a year.

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By 2014 scratch cards were almost twice as popular as horse racing bets, dominating 20% of the market compared to just 12% for horse racing. The cards have been particularly popular with women. This has led to some remarkable statistics: just 1% of women choose to gamble on sporting events, while a massive 19% play scratch cards. This kind of boom has seen the major UK provider of scratch cards, Camelot, posting record profits with scratch card sales.

While the UK saw huge growth, the US was positively explosive. The UK now has one scratch card retail terminal for every 2,000 people, but the US has one terminal for every 1330 people – almost double. As with so many things in life, the United States of America knows how to take it that one step further: from Scranton to San Francisco, the US is scratch card country.

Scratch cards bring the big wins

This boom meant two things: lots of people got lucky and lots of people got rich. In some cases people even became millionaires by accident. A man from Massachusetts thanked his lucky stars after winning a one million dollar prize from a scratch card that he didn’t normally purchase.

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Richard Brown, 60, headed along to his local gas station like every other day, looking to buy a $5 Blue Ice 7s ticket. The store clerk mistakenly sold him a Sizzling Sevens game (also worth $5) and changed his life forever. Brown almost chose to replace the Sizzling Sevens game, but in a fateful moment decided to “roll with it”. It ended up being one of the best decisions he ever made because he scratched off a million dollar win moments later.

How the internet changed the game forever

Scratch cards were born in the first tech revolution, and in the early 21st century another tech revolution would completely change how people consumed scratch cards. Along came the age of the internet and every man, woman and child owning a smart phone. Scratch cards were never more than a couple of swipes away.

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Sure, buying a scratch card was never difficult, you only had to walk down to your local store and the process took all of ten minutes. Now ten minutes seems like an eternity when you can play a scratch card on your phone in ten seconds flat. With Steve jobs introducing the App Store in 2008, software developers -- modern day John Koza’s -- started developing apps and online gambling experiences that would put scratch cards in the hands of billions of individuals, and make winning millions of dollars quicker and easier than sending a text.

This too was driven by the fact that smartphones are the fastest selling gadget of all time. In 2010 60 million Americans had a smartphone. In 2016 that number had reached 207 million. That's a lot of potential scratch card players and a massive reason why scratch cards are being played more than ever.

Flash forward: The future of scratch cards

But what about the future? Here is where scratch card numbers could get really crazy.

Western Europe is set to gain 140 million new Internet users by 2020, while North America is looking at an additional 120 million. Sounds a lot? Nearly two billion will be added from Asia Pacific, and 750 million more from the Middle East and Africa. To those of you who don't enjoy math with real big numbers, that's well over three billion extra potential scratch card players in under four years time!

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The future doesn't just hold lots of new players, swiping away at their digital scratch cards in Outer Mongolia like they do in New York. The whole scratch card experience is being fundamentally rewritten.

Just like in 1974, it’s technology that is leading the change with a new gadget coming into people’s lives over the next three years; augmented reality.

Sounds complicated, but here’s what it'll mean for the guy picking up his weakly scratch card treat at the end of a tough week: he can now point his smartphone at the card and a fun game will pop up. Playing a World Cup themed card? Messi and Ronaldo will come strolling onto your mobile screen, offering a mini-game that could win you an extra $1,000.

Every few years John Koza’s scratch card invention gets more exciting and more accessible, bringing the most important thing into more and more peoples lives — a little fun and the chance for a big reward.

The only question remaining is the same as it ever was: do you feel lucky?

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