Commission OKs Instant ‘Scratch-Off’ Games for Lottery

California Lottery commissioners Monday approved the first instant “scratch-off” games with prizes ranging from $2 to more than $40 million.

The $30-million to $40-million instant games contract will enable Scientific Games Inc. of Atlanta to recoup the multimillion-dollar investment it made in almost single-handedly paying for the heated pro-lottery initiative campaign last fall.

The pro-Proposition 37 campaign cost $2.4 million. Scientific Games contributed $2.1 million of that. A lawyer for the company helped write the measure.

Asked Monday if Scientific Games feels that it got what it paid for by the commission’s action, Chief Executive Officer John Koza replied, “We think it’s a good investment . . . . Over time we hope we’ll make a lot of money.”

Scientific Games was the only acceptable bidder for the instant game contract because it was the only firm willing and able to comply with strict financial disclosure requirements written into the initiative. These were the same public disclosure requirements that Scientific Games already had faced in other states.

The first game--to be called “Jackpot”--will begin in early fall and will feature small instant game tickets with six spots that can be scratched off with a fingernail.

Players will pay $1 each for the tickets and will be winners if they find three matching dollar amounts behind the spots. Prizes will range from $2 (with odds of 1 in 10 of winning) to $5,000 (odds of 1 in 40,000).

To add some excitement to its first games, the commission approved the use of a bonus cash gimmick. Each week a large prize wheel will be spun on prime-time television by certain $100 winners, who will be chosen in a weekly drawing.

Top possible prize in Jackpot--if no one hits the “jackspot” in 16 spins--is $40 million. The odds of winning that prize are in the trillions-to-one range.

The second game approved by the commission Monday will be called “The Sky’s the Limit” and will be similar to Jackpot, except that it will substitute a top prize of $10,000 for $5,000, but with half as many chances of winning.

Meanwhile, Assembly Democrats and Republicans continued to snipe at each other over a controversial two-pronged bill that would make it easier for lottery vendors to compete for contracts, while requiring that at least 30% of all bids go to minority and female-owned firms.

Assemblyman Phillip D. Wyman (R-Tehachapi) charged the Assembly’s Democratic leadership with adding the hard-to-pass minority provision as a way of scuttling the measure and thereby paying off a political debt to Scientific Games.

The firm has made sizable political contributions to Assembly Speaker Willie Brown (D-San Francisco) and others.

Brown told The Times on Monday that he was seeking the 30% minority clause “on principle” and that he was being opposed by “right-wing reactionaries and the governor’s office.”

The bill was rejected 44 to 32, 10 votes short of the two-thirds required, but supporters said they would have the measure reheard.