The founding fathers may have used lottery tickets partly to fund the Revolutionary War, but even they couldn’t have foreseen how high the stakes would get in the new country they were helping mint.
“We actually have a collection of antique lottery tickets from around the world signed by people like Thomas Jefferson and George Washington,” said Patrick McHugh, group CEO for of the lottery business at Las Vegas-based Scientific Games. Even Napoleon used lotteries to fund battles to expand the French empire.
Nowadays, consumers in the U.S. alone spend about $50 billion instant paper scratch tickets annually at retail stores. That’s more than they plunk down at the movie box-office or on music, video games or books. And that’s not to mention overall lottery spend around the world: a whopping $300 billion-plus.
Somebody’s got to print all those tickets with an unrivaled commitment to security, fairness and traceability. That’s where the Alpharetta-based global lottery division of Scientific Games comes in, and to hear about its precision manufacturing is to understand how the company landed on such a seemingly oxymoronic name.
“It’s harder than printing money,” Mr. McHugh said during an early presentation at the ninth annual Next Generation Manufacturing Signature event at SunTrust Park Sept. 26.
Scratch-offs are composed of up to 18 layers of inks, paper, foils and much more. They’re charged with keeping data on games like like Monopoly or Jumbo Bucks fully hidden from view from the time it’s printed on the ticket until it reaches the consumer’s hands, all while making the tickets ever more aesthetically eye-catching and innovative from a game-play perspective.
[pullquote]“It’s harder than printing money.”[/pullquote]
“It really blends the science and technology with the craftsmanship of manufacturing,” Mr. McHugh said. The company has 25 artists on staff to work on tickets’ visual appeal, but Scientific Games’ core strength is its ability to deliver on security and compliance.
“It can never be wrong, the payouts have to be exact, so it’s the volume with those dynamics that really is astounding to me every time I walk through there,” Mr. McHugh said. “We’re always innovating.”
Scientific Games prints more than 50 billion tickets per year — enough to circle the globe once — and uses enough rolled paper to get to the moon and back.
“I’m thrilled when I drive by McDonald’s and I see ‘billions and billions’ sold, because I know that they have nothing on us when it comes to volume and capacity,” Mr. McHugh said.
Adding even more complexity, Scientific Games maintains the process across five plants globally — Montreal; Leeds, England; Alpharetta, Chile and China.
The location decisions were based mainly on the promise of each market, as the company prints about 18 out of the top 20 scratch games per capita around the world.
“It’s generally about capacity, and not just current capacity but where we see growth internationally,” Mr. McHugh said. “We’re continually moving. We just must made a huge multimillion-dollar investment in the U.K., for example, because we see over the coming years there’s a great growth opportunity as we work with our customers at getting better games out there and managing the business.”
But sometimes one factory picks up slack for another.
“We’re able to move to meet capacity requirements and games between Leeds, Montreal, Alpharetta, so that if we’re at peak volumes in different parts of the world we’re able to shift those in real-time,” Mr. McHugh said.
Scientific Games counts more than 150 lottery customers in 50-plus countries. Announced in May, an expansion in North America and Europe will boost global output by 21 percent and introduce new inks, paper stocks and other materials that have never been used in ticket printing before.
Beyond the physical product, Scientific Games also consults on the prize structure to maximize revenue for each game. It also provides the software that underpins the lotteries, feeding algorithms into systems that handle everything from randomization to activation that occurs at the cash register. There’s even an automated way to screen for four-letter words on on crossword games.
Scientific Games also invests heavily in analytics to evaluate games and drive sales and ultimately more revenue for beneficiaries like the HOPE Scholarship, through which the Georgia Lottery has generated $20 billion for college scholarships.
Joe Bennett, head of game design, who oversees plants around the world, told the manufacturers in attendance that each ticket is simply “giving the data a secure ride to the consumer.”
Ultimately, Scientific Games is charged with escorting it safely. Cameras are everywhere in the Alpharetta facility, and certain server rooms and other areas are cordoned off. Manual checks accompany optical scanning systems. In a lab at the facility, employees test tickets with vodka to ensure the ink doesn’t bleed through if doctored with alcohol.
Only when every box of tickets is accounted for can an order be shipped to a lottery customer. Trucks are tracked with sensors and locked with a seal only to be opened at the final warehouse. (The tickets have no value until they’re scanned at a retailer’s register, but better safe than sorry.)
Mr. McHugh said the Alpharetta operation employs 1,200 people, mostly in the manufacturing space. Some robots have been introduced, and the company is investing in Georgia’s robotics workforce through donations to the Georgia FIRST Robotics lab.
Overall, Scientific Games has 9,800 workers globally. Beyond lottery, it operates the systems that run casino games and slot machines, online gaming, social media gaming and sports betting, providing a comprehensive set of services and hardware products along the way, from shuffling machines to large gaming cabinets with digital screens.
Most recently the company won a deal to provide retail lottery terminals to Italy’s Sisal Group, which operates lotteries under a government license at 48,000 retail points in the country.
Learn more at https://www.sggaming.com.
