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Lottery Project via YouTube

A Revealing History of Lotto Scratch-Offs

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Lottery Project via YouTube

Two things happened to John Koza in December 1972 that would forever alter the course of state-sponsored gambling. First, Koza earned his Ph.D. in computer science from the University of Michigan, cutting him loose from academia. Second, the company he worked for part-time fired him, freeing up the rest of his schedule.

Koza had been an employee of J&H International, a firm specializing in promotional gaming cards that were popular with grocery stores and gas stations in the 1950s and 1960s. The free cards could be compared to supermarket ads in newspapers in a manner similar to the game Bingo: If a card matched the graphic symbols in print, the consumer could win food, money, or prizes.

Koza assisted J&H with odds calculation, making sure the games were fair and the winning cards evenly distributed. Some had a waxy coating that could be rubbed off to reveal prizes—“probability” games that required players to reveal only the winning symbols—and that intrigued him. State lottery drawings were beginning to spread throughout the country, and Koza believed that an “instant” scratch-off game with serious money offered would be preferred over having to wait for a weekly prize drawing.

Koza was confident that the idea would be a hit with lotto players. The trick would be in convincing lotto officials.

Koza was a computer scientist who could handle algorithms; he decided to partner with Dan Bower, a retail promoter and fellow J&H employee who could help sell the notion of instant-win tickets and acted as co-developer. By March 1973, the two were operating Scientific Games Corporation out of Atlanta, Georgia. They flew from state to state explaining their concept—at the time, roughly eight had lotteries—and tried to convince lotto commissions that the games would be secure.

Eventually, Koza and Bower found a guinea pig in Massachusetts. The head of the lotto commission, William Perrault, had graduated from the University of Michigan in 1949 and may have felt a kinship toward Koza. He agreed to give Scientific a shot, ordering 25 million cards for the state.

Koza and Bower put themselves to work in the nascent field of scratch-off lotto and immediately ran into trouble. Federal laws were in place prohibiting the transport of gaming cards across state lines, making their production in Georgia and shipment to Massachusetts a tangle of legal red tape; there were taxes levied on non-horse related gambling, which shouldn’t have applied to the cards but had to be explained to accountants; and there was the concern of counterfeiting, which necessitated a secret recipe for the silicone coating that can be rubbed off with a coin.

The tickets were called “The Instant Game,” with a top prize of $10,000. (Players could also win entry in three monthly $100,000 drawings.) When the scratch-off debuted in May 1974, players in Massachusetts had been buying roughly $1 million dollars’ worth of six-digit lotto drawing tickets every week. By the end of the first seven days of marketing instant-win cards, the state had sold $2.7 million dollars’ worth of them. Just as Koza had predicted, the immediacy of the result proved irresistible to lotto fans.

Scientific Games went on to provide scratch-off tickets for multiple states, growing their revenue from $1.1 million in 1974 to $15 million in 1976. In 1981, Bally Manufacturing bought out the company, leaving Koza a golden ticket of his own. By 1985, California had ordered a staggering 700 million scratch-offs, with Scientific earning two cents for every one they delivered.

J. Money via Flickr // CC BY 2.0

The instant-win, however, still had another growth opportunity. In 1985, a small business owner named Cal Tigner stopped off at a convenience store in Oregon and noticed the cashier kept the scratch-off tickets in the register drawer. Tigner bought some, but wondered how much better sales would be if the tickets were visible. That night, he made a cardboard display that sat on a retail counter and dispensed the cards. Graduating to clear plastic, his Take-a-Ticket revolutionized the lotto world, which currently collects more than $75 billion per year from instant win alone [PDF].

As for Koza: While he left Scientific Games in 1987 a wealthy man, he can still appreciate the entertainment value of his creation. In an interview with ScratchCards.org, he confessed to impulsively buying a scratch-off in Quebec. He won $500.

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Hey, Vern: It's the Ernest P. Worrell Story
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Mill Creek Entertainment

In her review of the 1991 children’s comedy Ernest Scared Stupid, The Washington Post film critic Rita Kempley described the titular character, the dim-witted but well-meaning Ernest P. Worrell, as “the global village idiot.” As portrayed by Kentucky native Jim Varney, Ernest was in the middle of a 10-film franchise that would see him mistakenly incarcerated (Ernest Goes to Jail), enlisting in the military (Ernest in the Army), substituting for an injured Santa (Ernest Saves Christmas), and returning to formal education in order to receive his high school diploma (Ernest Goes to School).

Unlike slapstick contemporaries Yahoo Serious and Pauly Shore, Varney took a far more unusual route to film stardom. With advertising executive John Cherry III, Varney originated the Ernest character in a series of regional television commercials. By one estimate, Ernest appeared in over 6000 spots, hawking everything from ice cream to used cars. They grew so popular that the pitchman had a 20,000-member fan club before his first movie, 1987’s Ernest Goes to Camp, was even released.

Varney and Ernest became synonymous, so much so that the actor would dread going on dates for fear Ernest fans would approach him; he sometimes wore disguises to discourage recognition. Though he could recite Shakespeare on a whim, Varney was rarely afforded the opportunity to expand his resume beyond the denim-jacketed character. It was for this reason that Varney, though grateful for Ernest’s popularity, would sometimes describe his notoriety as a “mixed blessing,” one that would come to a poignant end foreshadowed by one of his earliest commercials.

Born in Lexington, Kentucky in 1949, Varney spent his youth being reprimanded by teachers who thought his interest in theater shouldn’t replace attention paid to math or science. Varney disagreed, leaving high school just two weeks shy of graduation (he returned in the fall for his diploma) to head for New York with $65 in cash and a plan to perform.

The off-Broadway plays Varney appeared in were not lucrative, and he began to bounce back and forth between Kentucky and California, driving a truck when times were lean and appearing in TV shows like Petticoat Junction when his luck improved. During one of his sabbaticals from Hollywood, he met Cherry, who cast him as an aggressive military instructor named Sergeant Glory in an ad for a car dealer in Nashville, Tennessee.

In 1981, Varney was asked back to film a new spot for Cherry, this one for a dilapidated amusement park in Bowling Green, Kentucky, that Cherry considered so unimpressive he didn’t want to show it on camera. Instead, he created the character of Ernest P. Worrell, a fast-talking, often imbecilic local who is constantly harassing his neighbor Vern. (“Know what I mean, Vern?” became Ernest’s catchphrase.)

The spot was a hit, and soon Varney and Cherry were being asked to film spots for Purity Dairies, pizza parlors, convenience stores, and other local businesses. In the spots, Ernest would usually look into the camera—the audience shared Vern’s point of view—and endorse whatever business had enlisted his services, usually stopping only when Vern devised a way to get him out of sight.

Although the Purity commercials initially drew complaints—the wide-angle lens created a looming Ernest that scared some children—his fame grew, and Varney became a rarity in the ad business: a mascot without a permanent corporate home. He and Cherry would film up to 26 spots in a day, all targeted for a specific region of the country. In some areas, people would call television stations asking when the next Ernest spot was due to air. A Fairfax, Virginia Toyota dealership saw a 50 percent spike in sales after Varney began appearing in ads.

Logging thousands of spots in hundreds of markets, Varney once said that if they had all been national, he and Cherry would have been wealthy beyond belief. But local spots had local budgets, and the occasions where Ernest was recruited for a major campaign were sometimes prohibited by exclusivity contracts: He and Cherry had to turn down Chevrolet due to agreements with local, competing car dealers.

Still, Varney made enough to buy a 10-acre home in Kentucky, expressing satisfaction with the reception of the Ernest character and happily agreeing to a four-picture deal with Disney’s Touchstone Pictures for a series of Ernest features. Released on a near-constant basis between 1987 and 1998, the films were modest hits (Ernest Goes to Camp made $28 million) before Cherry—who directed several of them—and Varney decided to strike out on their own, settling into a direct-to-video distribution model.

“It's like Oz, and the Wizard ain't home," Varney told the Sun Sentinel in 1985, anticipating his desire for autonomy. “Hollywood is a place where everything begins but nothing originates. It's this big bunch of egos slamming into each other.”

Varney was sometimes reticent to admit he had ambitions beyond Ernest, believing his love of Shakespeare and desire to perform Hamlet would be perceived as the cliched story of a clown longing to be serious. He appeared in 1994’s The Beverly Hillbillies and as the voice of Slinky Dog in 1995’s Toy Story. But Ernest would continue to be his trademark.

The movies continued through 1998, at which point Varney noticed a nagging cough. It turned out to be lung cancer. As Ernest, Varney had filmed an anti-smoking public service announcement in the 1980s. In his private life, he was a chain smoker. He succumbed to cancer in 2000 at the age of 50, halting a series of planned Ernest projects that included Ernest Goes to Space and Ernest and the Voodoo Curse.

Varney may never have gotten an opportunity to perform in a wider variety of roles, but he did receive some acknowledgment for the one he had mastered. In 1989, Varney took home an Emmy for Outstanding Performer in a children’s series, a CBS Saturday morning show titled Hey, Vern: It’s Ernest!

“It’s a blessing and a curse,” he told the Orlando Sentinel in 1991, “because it's as hard to escape from it as it is to get into it.''

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The iMac Was Almost Called the MacMan
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After breaking out with its Macintosh line of personal computers in the 1980s, Apple was in a slump. Sales had flagged as Microsoft's Windows operating system made waves. In 1998, the company was set to unveil a product that it hoped would reinvigorate its brand.

And they almost blew it.

According to Ken Segall, the advertising genius behind their "Think Different" campaign, Apple founder Steve Jobs was expecting the iMac to reverse the company's ailing fortunes. Where older Macs had been boxy, beige, and bland, the iMac came in an assortment of colors and had a transparent chassis that showed off its circuitry. The problem, as Segall writes in his new book, Insanely Simple, was that Jobs didn't want to call it the iMac. He wanted to call it the MacMan.

"While that frightening name is banging around in your head, I'd like you to think for a moment about the art of product naming," Segall writes. "Because of all the things in this world that cry out for simplicity, product naming probably contains the most glaring examples of right and wrong. From some companies, you see names like 'iPhone.' From others you see names like ‘Casio G'zOne Commando' or the ‘Sony DVP SR200P/B' DVD player."

According to Segall, Jobs liked the fact that MacMan was slightly reminiscent of Sony's Walkman branding concept for its line of cassette players. (Later, Sony had a Discman, Pressman, and Talkman.) But Segall, who named products for a living, feared the name would take away from Apple's identity as being original. It was also gender-biased, and alienating an entire demographic of consumers was never a good thing.

Instead, Segall suggested "iMac," with the "i" for internet, because the unit was designed to connect easily to the web. Jobs "hated" the idea, along with other suggestions, even though Segall felt the iMac could provide a foundation to name other devices, just as Sony's Walkman had. Segall kept suggesting it, and Jobs eventually had it printed on a prototype model to see how it would look. After encouragement from his staff, he dropped MacMan. With this key contribution, Segall made sure no one would be lining up to buy a PhoneMan 10 years later. 

[h/t FastCoDesign]

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