GTECH and Games Inc. Venture Online

23 April 2003

While selling lottery tickets via the Internet was recently adopted by the United Kingdom's National Lottery, the concept is a still a long way from happening in the United States, where earlier this year Connecticut's lottery had to pull a CD-ROM lottery game from shelves because the state attorney general thought it was too close to online gambling.

However, two U.S.-based companies recently introduced new lottery products that engage the Internet, even though they fall short of actually putting lottery tickets up for sale online.

The first of these new products is from GTECH Holdings Corp., the mammoth lottery services company based in West Greenwich, R.I. GTECH introduced its new e-scratch lottery game on April 9. GTECH did not return Interactive Gaming News' repeated requests for an interview, although CEO W. Bruce Turner said in a press release that e-scratch is an attempt to reach new customers in expanding markets.

"The e-scratch product is part of GTECH's strategy to expand the core lottery business by attracting new players through both traditional and emerging content venues such as interactive environments," Turner said.

The game, which GTECH bills as an "innovative Web-based, interactive suite of scratch and reveal games," requires the player to buy a paper ticket from a land-based retailer. At that time, the ticket's outcome is decided and stored in a read-only file, the company says. The player can see the outcome of his ticket on the Internet by logging onto a participating lottery's Web site. On the site, the player enters an account number on the ticket. If the player wins, he can collect the prize at the store where he bought the ticket.

The tickets, which can cost as little as 5 cents, according to GTECH, can allow players to play, on a Web site, a variety of games including scratch, card games and spinning-wheel games. The company warns that the actual winning or losing is predetermined at the time of purchase and not via the Internet.

"In compliance with auditing controls, e-scratch transactions do not occur over the Internet," GTECH stated in a press release. "Tech's strict implementation and operational processes ensure that all financial transactions are conducted at the point of purchase and never over the Internet."

The other new product comes from Games Inc., which is based in Cincinnati and operates several Web sites including www.lottery.com, www.cards.com and www.gameland.com. Games Inc.'s product is called Internet Instants.

Like e-scratch, Internet Instants require making an in-store purchase. Once a player has bought a ticket, he or she can visit a "personal play site" to select a game to play with the ticket. Like GTECH, Games Inc. did not respond to multiple requests for an interview, but according to a press release, Internet Instants give consumers more entertainment for their buck.

"This allows for several key features not currently available in the lottery marketplace: ticket animation, sound and music, variable price points and a far higher play value than the conventional paper ticket," the company said.

The system works much like GTECH's system. The player buys the ticket at a store, uses a number on the ticket to log on to an Internet site, and then chooses a game. The player's winnings can then be picked up at from the retailer who sold the ticket.