Rick Guskey believes in fate, so when he spied a winner cashing in a $30 scratch-off ticket on his mother's birthday, the 42-year-old Wal-Mart employee knew just what to do.
"That's a sign I'm supposed to buy one of those tickets," Guskey concluded.
So, on his way to work in Putnam the next morning, he stopped off and spent $90 on three of the big, colorful "Casino Cash" cards - the most expensive lottery tickets in the nation. To Guskey, who's been chasing his jackpot dreams every week for more than 20 years, forking over that kind of money on a hunch seemed a sound investment.
"I'm destined to win," said Guskey, who likes to daydream about accepting an oversized lottery check on television. "I'm going to keep plugging, because I'm going to hit that big one some day."
The $40 billion lottery industry, which includes a majority of state governments in the U.S., has the Rick Guskeys of the world firmly in its cross hairs.
Through exhaustive research and surveys, the lotteries know what their players earn, what TV shows they watch, what they read, how much education they have. They study the colors these people like, whether they are superstitious and if they believe in lucky numbers.
Facing competition from casinos and pressure to succeed like never before, state-sponsored lotteries have used this information to lure the most vulnerable - those with little education, the poor, the superstitious, the hard-core gamblers - with promises of long-shot riches. Their weapon of choice is the instant "scratch-off" ticket, the lottery's most addictive game format, which has exploded in popularity during the past decade and dominates lottery sales nationwide.
All of this is good news for the 38 states that depend on lottery revenues. But in the process, state government - which spends much of its effort building safe roads, educating children and fighting crime - has found itself in the unexpected position of encouraging more people to gamble more often, even if they don't have the money.
A Courant review of internal research documents and strategic plans obtained from many of the country's state lotteries shows that government is aggressively pushing gambling in new, more sophisticated ways.
Wisconsin is after those with lower education and income, "the paternalistic dreamers." Oregon has set its sights on hooking younger people on its games. Arizona is using "color psychology" to boost ticket sales to susceptible players. Michigan and Georgia just launched a game in which gamblers bet whatever loose change they can scrounge from their pockets.
Here in Connecticut, which runs one of the most successful lotteries in the world, the marketing mantra is "promote increased play frequency" for its high-priced lottery games, whose best customers are, according to its own research, the lower-income and least-educated residents.
The Courant's analysis shows that:
Marketing strategies are increasingly manipulative, masking the poor payout of lotteries while stressing the "fun" of gambling and the benefit to the state treasury.
Few government agencies gather as much information on their clients, such as their lifestyles, who plays and how often.
Sales of instant tickets nationwide have more than doubled over the last decade, but much of the growth is coming from a relatively small portion of the population.
In the face of growing competition from casinos and illegal Internet gambling, lotteries are aggressively seeking to transform the occasional players into habitual gamblers.
"States ought not to be in the business of lotteries," said Howard J. Shaffer, director of the division on addictions at Harvard Medical School and a leading researcher on gambling. "It's a conflict of interest. States are here to protect and serve.
"The lottery purveyors have a very interesting habit of trying to make people think there is a modicum of skill involved, as if you have some influence on the outcome," he said. "Those skills are simply marketing devices to get you to play more. Buying a ticket only slightly increases your chances of winning than not buying a ticket at all."
Cultivating Jackpot Dreams
At the Quik Pik on East Main Street in Meriden, where the "scratch club" meets mornings, a $4 latte would be laughed out the door. But most mornings this summer, there was a brisk business in $10, $20 and the never-before-seen-in-America $30 instant lottery tickets.
"It's relaxing, scratching them off," said Robert Anderson, a Meriden retiree who comes in for a few minutes of scraping a coin across a latex-covered ticket at least three times a week.
By 7:30 on a good morning, the floor by the coffee pot is littered with tiny shreds of rubbings from "Stud Poker," "Pinball Wizard" or one of the more than 30 games running simultaneously. It's not surprising for a customer to spend $100 or more on the festive scratch tickets, displayed in plexiglass cases.
"I scratch here and I scratch at home," said Richard Wood, self-described president of the Quik Pik scratch club. "We don't go nuts. We have our limits."
The lottery's strategy in Connecticut is simple - convince people to gamble more and spend increasing amounts, through higher-priced tickets and bigger, more frequent prizes. The average odds of winning at least something are about 1-in-4; for big prizes, 1-in-a-million.
As long as the new instant games keep coming, Quik Pik owner Sam Amin said customers will crowd his store.
"Nobody is putting a gun to their heads," he said.
Nobody has to, not with the lottery's marketing and advertising machines, and a state-government seal of approval.
In the 38 years since New Hampshire brought back the modern lottery with a quaint "sweepstakes" game in 1964, lotteries have mushroomed into a $40 billion business in 38 states driven largely by the wildly popular scratch-off instant tickets. As interest in old-fashioned weekly lotto jackpots has waned, states have adopted sophisticated marketing campaigns that, critics say, are designed to entrap the most vulnerable members of society.
Like the lucrative private-sector gambling industry whose tactics they have carefully copied, most state lotteries zealously guard their marketing strategies and research.
The Connecticut Lottery, a quasi-public agency that turns all of its profits over to the state treasury, spent months fighting a Courant request for its internal marketing and customer research files before being ordered to release them by the state Freedom of Information Commission. The Courant obtained similar information from about half of the other states with lotteries.
Taken together, the documents reveal a go-for-the-jugular attitude toward the public. And it is strikingly at odds with the lottery industry's carefully crafted image as a whimsical source of harmless fun and benefactor of education.
In Connecticut, the lottery's own detailed research into purchasing patterns reveals that players of instant games who gamble every day spend, on average, more than $4,300 a year just on scratch-off games. Among those with a high school education or less, spending rises to more than $4,650 annually on scratch tickets, according to lottery estimates prepared by an outside research firm.
In fact, in Connecticut and other states it's common knowledge among lottery officials that the best customers are those with less education and lower incomes. According to an analysis by Kopel Research Group Inc. for the Connecticut Lottery, "those with less education appear to be significantly more likely to have played the instant games, and to play them more frequently than those more educated."
"I won't dispute that," said James Vance, president and CEO of the Connecticut Lottery Corp. "In a free society, we certainly can't prohibit a group from buying tickets."
The Connecticut Lottery calls these people its "paternalistic players," and while they make up just 12 percent of the state's population, they make up 29 percent of all spending on lottery games. An internal lottery research document succinctly sums up why lottery officials love these people so much:
"Living with the motto that life should be enjoyed today as much as possible without worrying about the future, this group is fairly competitive in that they enjoy pitting themselves against the odds and the feeling that they have beaten the rest of the world. ... Most also believe in fate and as a result, often dream about what they would do and what it would be like if they won the lottery."
A Wisconsin lottery document is more specific: "They will likely respond to advertising that hints of freedom, and reminds them to play, so they don't miss their chance if their numbers come up."
Making More Gamblers
A few years ago, Montana lottery officials discovered they had a problem. Plenty of people were trying lottery games, but far fewer were regular customers - a situation very similar to Connecticut's. Just under 50 percent of the population was accounting for $9 out of every $10 spent on tickets.
So Montana did what more lotteries, including Connecticut, are doing: They commissioned a "segmentation study," including a detailed survey of consumer attitudes. The study divided the population into subgroups based on behavior and preferences. This ranged from its best players, the "enthusiastic individualists," to those it felt didn't play enough, the "indifferent bystanders" and the reluctant "concerned dabblers."
Westport marketing consultant Patricia Sabena said companies use segmentation studies and "psychographic" surveys of consumers to reveal subtle clues about their customers based on "deep-seated attitudes, feelings and motivations."
"You do it to shape the way your product looks, the way your product presents itself ... that would resonate with the people who are likely to be your target audience," Sabena said.
With lotteries, "you've got to get people to play," said J. Walker Smith, president of Yankelovitch Partners Inc., a marketing consulting firm with offices in Norwalk. "You have to understand in detail who they are and how much money they have to spend, where they live and where they spend it."
To do this, lotteries hire marketing research firms who conduct detailed interviews of hundreds of adults, as well as focus groups, to gather further information from consumers.
Armed with this detailed research, the goal in Montana became "reach the infrequent or lapsed `concerned dabbler' and the `indifferent bystanders.' These specific marketing segments need encouragement, which will be addressed with a segmented campaign over the full fiscal year and with frequent and positive messages."
For those who oppose the lottery, the strategy recommended that "a well thought out and positioned corporate image campaign has the potential of softening this segment's fervent opposition so that it does not become a vocal issue or an actionable stance."
In Louisiana, the challenge was boosting business from a group the lottery dubbed the "conflicted fun seekers." They make up just 8 percent of state residents - but account for nearly a quarter of lottery spending.
"This segment is characterized by a strong internal conflict. ... They support the lottery and the economic benefits it brings ... but they perceive other types of gaming as harmful," lottery documents state. Louisiana officials recommend exploiting the "risk taking" and "dreaming nature" of these people while promoting "the fun that the lottery provides its players and the benefits it provides to the state."
The Connecticut Lottery Corp., the ninth largest lottery in the world based on per capita total sales, conducts the same studies of its customers. Its "brand campaign" is crafted around the concept that the lottery is about "safe, fun entertainment" - not winning. And while Connecticut Lottery often states that its customer base is everyone over age 18, profits rely on a vastly smaller group of heavy players.
"Most of our audience has tried but has no regular purchasing pattern," the lottery states in its media plan. "Efforts need to be balanced for building loyalty among infrequent players and retaining players who are already loyal."
In Missouri, the goal is to "develop tactics to convert occasional users to the loyal player base" by enticing patrons to play more lottery games, more often. In Massachusetts - where per capita spending on instant lottery tickets was $434 in 2001 - a confidential lottery study noted in March that 11 percent of heavy instant game players were playing more often than six months ago.
Internal market-research documents make clear that lotteries, and the companies that work for them, are fully aware of the negative impact their products and marketing campaigns have on some segments of the population.
For instance, an unidentified New Hampshire lottery player participating in a focus group session couldn't have been more blunt, or revealing, about just how much the lottery in that state knows about the effect it has on some people.
"You can be just addicted to the lottery games," said the player. "I found myself going to bed about 10 o'clock one night ...[and] turning over 15 minutes later saying `oh my god I've got 15 minutes before my number gets played and I didn't play them today.' And [I] get out of bed and run to the corner store like it was nothing."
MDI Entertainment Inc., a Hartford-based company that develops and licenses instant games, proudly trumpets the way its products stimulate demand, posting some of its consumer research on its website. But the customer survey responses it collected on its Harley-Davidson motorcycle scratch-off card reveal a darker side to instant games.
"I spent so much money on these scratch tickets I could've put a down payment on [a Harley,]" one player confessed.
And another: "I enjoy the lotteries so much. Sometimes I spend my bill money."
Getting people to play more and to "create overall positive feelings about the lottery" remain top goals, according to the Connecticut Lottery's communications plan. Recent television and newspaper advertising emphasizes smiling people and all the money contributed to the state's general fund. The odds of actually winning the lottery are nowhere to be found.
According to lottery documents obtained by The Courant, "The message needs to remind people of the `cheap little thrills' they can experience from playing lottery games."
So far this year, the strategy seems to be working. Total sales were up 8 percent for the fiscal year that ended in June, delivering an all-time high of $271.5 million to the state treasury. State law requires that the lottery "provide continuing and increased revenue to the people of the state ... by being responsive to market forces and acting as a corporation engaged entrepreneurial pursuits."
Vance, the lottery president, said the corporation is just doing its job.
"We try to emphasize the fun and entertainment of playing the lottery," he said. "We do what we feel is appropriate to continue revenue streams to the state."
A Simple, Fun Experience
Daria Anderson has a simple plan: She wants to win, so she goes for the more expensive lottery games, which offer more prizes and long-shot chances of the big payday.
"In order to win big, you have to play big. I prefer the big denomination tickets," said Anderson, of Seymour. She plays a few times a week, and even won $3,000 earlier this year.
Still, Anderson concedes, "I'm not ahead."
"If I was a smarter person, I would not play. It's really a fool's game," Anderson said. "It provides an instant gratification. For that split second you are able to dream, within 20 seconds you know whether you dream has come true or not."
Players like Anderson have helped fuel an unprecedented boom in instant ticket games, which now account for about 60 percent of Connecticut's total lottery sales, up from about 23 percent 10 years ago. Last year, Connecticut ranked second in the world among instant lottery sales per capita, at more than $154 for each resident, second only to Massachusetts.
James Kennedy, vice president of North American sales and marketing for Scientific Games, which designs, produces and runs lottery games worldwide, said instant games "sell more than the record industry."
"The instant game is simple. It is self-reinforcing - you win cash now. It is not complex and it is almost stress reducing," said Kennedy, whose company commands two-thirds of the instant lottery business in the United States. "It is a simple, fun experience."
But as the emphasis on scratch tickets has grown, with higher priced tickets and more casino-themed games, some researchers are worried that problem gamblers are particularly susceptible. It is the lure of immediate gratification that is particularly ill-suited to problem gamblers, many of whom crave the quick payout that slot machines and instant lottery tickets offer, experts say.
"This is a highly discriminatory tax. It targets the most vulnerable populations in the country," said Henry Lesieur, director of the Rhode Island Gambling Treatment program and president of the Institute for Problem Gambling.
"If we had to invent a game that the mentally disabled would play, this would be it - the instant games," Lesieur said.
Danielle, a problem gambler, discovered instant tickets a few years ago and couldn't stop, ransacking her savings and ruining her marriage. She vividly remembers spending 10 hours in a gas station one day, compulsively scratching a coin across ticket after ticket.
"I just kept buying tickets," said Danielle, who is in treatment and declined to give her full name. "There was this one particular ticket I loved. It was called `Cashword.' I would go in and buy 10, 30 or 50 of them.
"Before you know it, I started taking money out of the checking account. After that, I just kept buying tickets."
Unlike casinos in Connecticut, the lottery's "convenience store gambling" is available nearly everywhere, at 2,800 locations statewide. Recommendations from the National Gambling Impact Study Commission in 1999 urged the scaling back of convenience store gambling and elimination of instant games "that are simulations of live card and other casino-type games."
In its report, the commission questioned "the contradictory role of state government as an active promoter of lotteries. ... The evolution of state lotteries is a classic case of public policy being made piecemeal and incrementally with little or no general overview."
Marvin Steinberg, executive director of the Connecticut Council on Problem Gambling, said his organization has seen a striking rise in callers to its telephone help line. Scratch-off tickets ranked behind only casino slot machines among problem areas for gamblers, according to the council's most recently available statistics.
"Because state government profits so much from the lottery, [the lottery] essentially has a free ride. All other gambling is somewhat limited," Steinberg said. "The lottery as a form of gambling is as dangerous as casino gambling. We ought to be talking about the appropriate number of sites of lottery sales."
Such arguments traditionally have not resonated among state officials with authority over the lottery. Susan Townsley, director of the state's Division of Special Revenue, which oversees the lottery, said her agency concentrates on security matters, like making sure nobody cheats - not philosophical debates about gambling.
"Experience has shown that the lottery is an excellent revenue producer for the state," Townsley said. "The most important thing is that it be regulated and the integrity be assured for the gaming public. We work in cooperation with the lottery."
Lotteries And Casinos
With its own surveys showing that two-thirds of residents are skeptical about how the lottery benefits the state, Connecticut now spends much of its advertising budget emphasizing how much money the games pump into the state treasury in Hartford.
The real threat to the lottery, however, lies down Route 2.
Over the past decade, the state lottery's share of the "gaming dollar" has steadily slipped as the Foxwoods and Mohegan Sun casinos in southeastern Connecticut have captured gamblers' attention. Lottery sales have grown only because the gambling pie is bigger: More people are gambling and spending more money doing it.
As the $13 billion Indian casino industry proliferates, lotteries across the country have become more aggressive, designing their instant or "scratch" games to mimic slot machines and table games, to convert the occasional into the habitual player.
This has increased pressure on lotteries to promote their instant games, pushing newer, more elaborate offerings. Connecticut, for example, introduces an average of two new instant games every two weeks. Some states run dozens of scratch games at a time. The Texas lottery has devised special games sold only at stores where heavy gamblers congregate.
Michigan officials recently found that 22 percent of their players were spending less on the lottery due to casino gambling. So it's not surprising that the Michigan lottery's "Ceasar's Palace" game - recently introduced in Connecticut - is particularly popular with its all-important "heavy" players.
"They perceive the colors as relating to wealth and casinos. Beyond the appearance of the name, participants also liked the name itself, due to the connection with Las Vegas," according to transcripts from a focus group study completed last December.
And in Oregon, the lottery's advertising strategy argues that casino themes are the way to attract more young people. Younger residents feel the lottery is "played by older people, their parents, the poor. ... Casinos are reported to have a more glitzy and exciting image compared to traditional lottery games."
Until recently, "there wasn't a lot of competition out there for the entertainment dollars. Now in Connecticut you have [Foxwoods Resort Casino and] Mohegan Sun," said Sharpe. "Lotteries simply have had to keep up with all the available forms of entertainment. They couldn't just sit back ... without going into more sophisticated methods of distribution and marketing and advertising."
The ever-expanding casinos in Connecticut are now capturing $9 out of $10 spent on gambling, according to Dennis Chapman, vice president of marketing for the lottery. To compete, the lottery is faced with the challenge of attracting some of those gamblers who like spending more money on Las Vegas-style gambling excitement.
Its own research shows that players want casino games. So, with an eye toward luring hard-core gamblers, the lottery earlier this year rolled out the newest weapon in its battle for the gaming dollar, one that combines casino themes with the time-tested appeal of a scratch-off ticket.
The "30th Birthday Casino Cash" ticket - whose release coincided with the Connecticut lottery's anniversary - is an oversized card, featuring eight different gambling games, including scratch-off simulations of blackjack, poker and slots.
Launched without fanfare in March, the game also featured 1-in-55 odds of winning your $30 back and a 1-in-a-million shot at $300,000.
Within weeks, instant sales exploded, fueled by the $30 ticket, which some customers were buying in $600 packets of 20 tickets.
"This is probably the biggest ticket that has ever been launched," said Phil Green of Creative Games International, which created the game with Connecticut lottery officials. "The higher-priced tickets are a natural thing to go to."
Before launching the ticket, the lottery corporation did "wide scale focus-group testing," said William Hennessey, former manager of instant games for the Connecticut Lottery.
"We knew that our $10 ticket was very well-received and we also did that with our $20 ticket," he said. "We knew the market was there."
It took only a few days for Rick Guskey, the Wal-Mart assistant manager in Putnam, to notice the new $30 tickets, shortly after they appeared in a convenience store.
Guskey's $90 investment that March morning paid off - this time. He won $3,000. Still, Guskey isn't satisfied. He's chasing that big payoff, and intends to keep buying tickets until the dream comes true.
"I always picture myself [winning] on TV," he said. "One day, I'm destined to hit the big jackpot, somewhere, somehow."
Tomorrow: Connecticut Lottery targets: inner-city neighborhoods, cornfield communities.