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Vicky Nolan

Scratch and Win Hits the Internet

20 February 2001

It's not scratch and sniff, but soon scratch and win will be coming to the Internet.

That is the reality of a recent deal struck between Realtime Media and Scientific Games International that will create a marketing tool for state lotteries everywhere.

The two companies announced last week the formation of a strategic marketing alliance that would incorporate Realtime's patent pending Internet scratch-off games and systems. "This initiative has multiple benefits for today's lotteries," explained Jim Nulph, senior director of marketing for Scientific Games.

"It will enable lotteries to harness the power of the Internet by providing them with an important marketing tool to develop value-added promotional programs, such as second chance drawings," he continued. "In addition, the Internet-based second chance game will allow the lotteries to collect confidential e-mail addresses that, along with the user's opt-in permission, will allow the lotteries to interact with the user on a direct basis."

States that adopt this unique marketing tool will still be selling instant tickets through their various retail outlets, an important distinction that will keep lottery officials from worrying about selling tickets over the Internet across state borders. And since the sale takes place at a retail outlet, the holder's age and location have already been verified. The transaction is perfectly legal and takes place in a real world venue.

The purchaser gets more than a simple one-time scratch-and-win (or lose) ticket. After playing the instant ticket, the holder then has a second chance to win. Scratching the appropriate box reveals a nine-digit alphanumeric code, which the player enters onto the lottery website. (Players log onto the state lottery website, then are redirected to the Realtime website, where they are required to enter personal information, such as name and address. Most importantly, adds Eric Ruth, Realtime's vice president of sales for lottery and gaming, "we ask the opt-in question, 'Would you like more information.' This gives the details for the lottery to build a one-to-one marketing relationship."

Unlike competitor's second- and third-chance Internet lottery sweepstakes games, Realtime offers players another scratch-and-win game as the second-chance opportunity. According to Ruth, lotteries generate 40 to 50 percent of their income from scratch and win games. "Scratch and win games will outperform sweepstakes on a six to one average," he added.

While sweepstakes typically offer larger prizes, such as trips, expensive items or large sums of cash, Realtime's players are competing for smaller prizes, but with a greater chance to win. The odds usually run about four-to-one.

"Few people believe they'll win those huge prizes," Ruth said. "Giving such large and good odds results in making the game more attractive for players. Everybody knows the prize is small, but it's useable." Adding to the value of those prizes: Realtime is negotiating with a shopping portal backed by major brands that would extend their prize base, making it possible to offer prizes that a multi-state lottery promotion would be able to give away.

Although no state lottery has yet signed the dotted line, Ruth said that at least seven have made a verbal agreement to adopt the new marketing system. There could be a few others interested in Realtime's pitch. After all, Scientific Games already provides scratch off tickets for 30 of the 38 state lotteries in the United States.

Scratch and Win Hits the Internet is republished from
Vicky Nolan
Vicky Nolan