The 1st ever lotto add-on: Are You Insured?

"Are you in good hands?";"Nationwide is on your side"; "Did the little piggy cry wee-wee-wee all the way home?"; and other insurance slogans. Though for the purposes of this article, insurance is not a contract one signs entitling them to money if things go wrong with their car, provided they pay their premiums. Rather, it's what the Rhode Island Lottery called the first add-on to a lotto game in America; introduced in Februrary 1981 as a part of their 4/40 Jackpot game. 4/40 Jackpot was itself a pioneer of sorts, a true rarity at the time: a computerized jackpot game. As far as I know, New Jersey's Pick-6 Lotto was the only other game of that kind in 1981 (New York's Lotto, I believe, was only partially computerized at the time).

Anyway, back to this add-on: the "insurance" feature. You see, 4/40 Jackpot tickets were, like pretty much every lottery game back then, $1 apiece. There was a bit of a catch to this game, though; if you bought a one dollar 4/40 ticket and did not match all four numbers, you won nothing! Zilch! Notta! Goose Eggs! All of the prize money raised from a $1 ticket went to the jackpot, leaving nothing for smaller prizes like most games. Presumbably realizing a backlash against a game with so few prize winners, those in control added something called "insurance", an extra dollar bet one made to give them a shot at smaller prizes; and while it didn't insure a win as the name suggested, it still helped out your odds quite a bit. Quite simply, plunking down an extra dollar gave you chance to win two additional prizes: $300 for matching 3 out of 4; and a free ticket (with insurance) for matching two. So, to recap: $1 buys you a chance at the jackpot; but you need another dollar to qualify for the other two prizes. Quite frankly, this all sounds like a bait and switch. It's almost like a car dealer selling you a car, only to tell you you have to buy the engine and tires separately.

Players didn't mind though; the game was successful and like most successful lotto games, they started adding numbers to make it harder to win. 4/40 Jackpot became 4/47 Jackpot in August 1983; in doing so raising the 3 of 4 insurance prize to $447, and adding a feature that turns the jackpot into an annuity if the jackpot reached $200,000. That in turn was replaced by Lot-O-Bucks in 1985; a 5/40 which kept both the insurance and annuity rule. The latter rule was a big reason why Lot-O-Bucks frequently had jackpots around $1,000,000. As for the insurance feature, it was still required to win non-jackpot prizes: four numbers won $450, three won $20, two still won a free ticket with insurance.

Lot-O-Bucks would run unchanged for another decade; then in 1995 it was replaced with a 5/30 called Rhody Cash, and unlike the games that came before it, you didn't need an extra dollar to win smaller prizes. The era of "insurance" was over; an era that no other state experienced. It could be said though that "insurance" would pave the way for the add-ons like Power Play and Megaplier we see today. You don't have to buy those add-ons in order to win a smaller prize (like you once did in Rhode Island), but it does increase those smaller prizes. You could say that they're spiritual successors to "insurance", successors that don't quite make you feel like a sucker.

Bonus: here are some newspaper ads heralding the 4/40 and 4/47 games upon their release. Look how big a deal they make quick-picks and multi-draws. Retroriffic! Warning: Big Files!

A little appetizer...

I've got a blast from the past coming up in my next blog; but until then, here's a little treat. Back in 1992, WFLA-TV in Tampa (that's channel 8 to you and me) aired a magazine-style special; and one of the, uh, "articles" was about the Florida Lotto. More specifically, it was about the people who changed the numbers on the Lotto billboards advertising the jackpots. Funny thing is, while most states converted to digital billboards (Georgia, IIRC, was digital from day one); Florida hung on to their manual signs well in to the 2000s. The Florida Lottery sure was slow to change.

Be sure to jump to 37:44 for the Lotto story; and before I forget, thanks to TVsmurphman for posting this in the first place.

Note to Pennsylvania Lottery players: Don't panic!

You may have noticed that the Pennsylvania Lottery changed the names of some of their games. The Daily Number is now Pick 3, Big 4 is now Pick 4, and Quinto is now Pick 5. Why did they do this? I don't know; maybe they wanted to provide more clarity, but this is probably going to cause more confusion. 

In any event, you should know that absolutely nothing else has changed about the games in question other than the name. You play exactly the same way. Say that to yourself out loud: 

"You play exactly the same way". 

Remember that, because you will undoubtedly encounter someone in your local Wawa or Sheetz who is lying in the fetal position because the Daily Number supposedly went away. Just tell them that it's just called Pick 3 now, nothing else has changed, "you play exactly the same way". Help out your fellow man.

Pick-6 Lotto (NJ) finally gets an add-on.

For a while now, most NJ lottery games have offered an add-on feature; a chance to win more provided you pay an extra dollar. Pick 3, Pick 4, and the recently ruined Jersey Cash 5 all have Instant Match, while the two multi-state mega jackpot games have their respective multipliers. Now, New Jersey's original jackpot game, Pick-6 Lotto, has a multiplier too. It's very similar to the Xtra feature in Florida's Lotto; in fact, New Jersey's version is also called Xtra. Pay an extra dollar, and you can multiply non-jackpot prizes between 2 and 5 times; and also win $2 cash by matching 2 numbers (something you can't do in the $1 version of Pick-6, and you still can't do in Jersey Cash 5).

I'm not sure if I can recommend this, though. As of yet, there have been no indications about the odds of a particular multiplier coming up. Maybe once I see the drawing, I could find out. My guess is that there's an equal chance of any multiplier coming up, but there's no guarantee. Tennessee's ill-fated Lotto Plus had a multiplier heavily weighted towards the lowest factor, 2x. This created a situation where adding the extra dollar would actually raise the house edge, from 50% for the $1 base game, to about 58% (IIRC) once you added the Plus feature. Hopefully, New Jersey hasn't done this and has created an equitable multiplier scheme. Multipliers are good bets if they're done right.

Monopoly Millionaires' Club: What went wrong?

Happy New Year. Your 2014 had to have been better than the one MUSL had, which by all accounts completely whiffed on their Monopoly Millionaires' Club game. The lottery industry seemed down right stoked, the idea of mainstreaming the $5 price point to lotto games; this had only been tried once in South Carolina, with dismal results. However, players did not share in the enthusiasm. Sales were so bad that they pulled the plug after 10 drawings; they simply weren't selling enough tickets to pay for the promised prize amounts. There was a massive rolldown in Pennsylvania where, for example, a 2-number match paid out $97.50 and matching just the property won $135.50 (which I managed to do, yay me). I'm not sure how much of the jackpot Pennsylvania recieved, and in turn paid back to players, but no other states did the same thing. I'd be pretty angry if was a player in one of the other states.

Setting the high price aside, the game was pretty meh. The gimmick of the game was twofold; a chance to win one of several million dollar prizes when the jackpot was won, and a webcode to enter for a chance to appear on a game show. Other than that, it was just Powerball-type game: pick 5 from 52 and one of the 28 Monopoly properties. Except, you could only pick the first five numbers; the property was always a quick pick. You see, the game show qualifying game was a collect-and-win type of deal, not unlike the Monopoly contests McDonald's does. If you entered your webcode, the property on your ticket would be placed on the "board". Get all the properties of a certain color (or all the Railroads) and you win entries. Allowing players to pick their own properties would mean that players could just pick either Boardwalk or Park Place on each ticket, and guarantee themselves several entries every time (not to mention putting the lottery on the hook for much more prizes if Boardwalk or Park Place came up). Good reasoning aside, players like to able to pick their own numbers (or properties), and I'm sure requiring quick pick for the property number kept some people away.

The second "problem" was the jackpot. Any excess jackpot money would go towards those extra million dollar prizes. The idea was to have potentially 100 or more individual million dollar prizes; but to pay for that, the jackpot was capped at $25 million, annuity value. People get excited about big jackpots, and little else. To get someone who's still getting used to $2 Powerball to now plunk down $5 for, at most, $25 mil, you can see why the lotteries were facing an uphill battle. Perhaps the hope was that players would, instead, get excited about being one of 100 or more million dollar winners. With sales the way the were, it could have taken at least a year of losses to get to that point, provided no one won the jackpot in the meantime.

The third problem, computerized drawings. People don't like them, and they never will.

The fourth problem, and the biggest one, is the price. People will pay $5 for a lottery ticket; it's the most popular price point for scratch-offs, in fact. In turn, you need to provided added value: better overall odds; a larger top prize; and most importantly, a higher return percentage (which people notice, albeit indirectly). $5 scratch-offs do all of that, but MMC provided no real added value, instead depending on gimmicks like webcodes. The overall odds were roughly the same as a typical pick-5 with a match 2 prize; the top prize was capped at $25 mil; and the payout percentage was the same as Powerball and Mega Millions, 50% of sales, three-fifths of which go to the jackpot.

If lotteries want people to pay more, then they have to pay more. They are thinking about bringing the game back with some tweaks, but one of those needs to be a higher payout percentage, at least 60% of sales. The extra money can go towards the million dollar raffle prizes, it can go towards higher jackpots, maybe an instant win feature; it can go anywhere, really. Just raise the payouts to loosen the game up. Players will notice.