Jackpot: Ann Arbor native helped create the lottery instant ticket

Last month, a lucky 62-year-old Van Buren County man won $300,000 on an instant lottery game. 

Besides winning the cash prize, the most amazing part of the story? 

While the man was buying the lottery tickets, he asked the clerk to sell him a "big winner," said the Michigan Lottery. She handed him the last three Super Bingo tickets, with the last ticket the man scratched being the winner. 

According to Jeff Holyfield, the director of public relations for Michigan Lottery, more than 70% of Michigan residents buy at least one instant ticket a year, and in 2018, players won more than $1 billion playing the scratch-off games.

Lottery is huge nationwide as well. In 2016, Americans spent $80 billion on traditional and electronic lottery games.  

The phenomenon of being able to scratch off a ticket in seconds in hopes of winning thousands or even millions of dollars was created by Ann Arbor native and University of Michigan graduate, John Koza. 

With the upcoming 2020 election, the 75-year-old has been in the news for his efforts to persuade states to enact the popular vote in lieu of the Electoral College. However, back in the early 1970s, Koza began toying with the idea that would become the instant ticket. 

Hitting the jackpot 

While enrolled at U-M studying for his doctorate degree in computer science, Koza also worked for Chicago-based J&H International, a firm specialized in making lottery cards for grocery stores and gas stations. According to Mental Floss, when someone won off of the free cards, they could win prizes such as money or food. Koza's role in the cards was to make sure the games were fair and that the winning cards were distributed evenly. 

Koza and his supervisor at J&H, Daniel Bower, then came up with the idea to offer a similar type of ticket game for the limited state lotteries in existence at the time. They offered only raffle-type games where a six-digit number was printed on a ticket, with the winner announced every Saturday during the drawing. Koza said adding the instant feature would bring in more money for lottery commissioners. 

"It offered instant gratification," he said. "Now, you wouldn’t have to wait until Saturday night to see if your ticket was a winner, you could find out immediately. It was really quite obvious to us that it would work." 

Koza and Bower began traveling to different states to pitch their idea, but then J&H unexpectedly went into bankruptcy in 1972. However, the two didn't let unemployment deter them from their idea. After Koza graduated from U-M, he and Bower created Scientific Games and moved to Georgia in order to have the lottery tickets printed. 

Koza said operating his own business was a completely different experience than his work at J&H. 

"It was totally new to us, dealing with state governments when at the previous company, the customers were supermarket chains and gas stations, oil companies," he said. "Government procurement is a totally different animal. There's all kinds of procedures and contractual requirements and bidding requirements that you have to go through aside from making the sale."

The partners were able to convince lottery officials in Massachusetts to give them a contract, and the instant tickets were made available to the public in the spring of 1974. According to Mental Floss, the tickets were called "The Instant Game," and offered a top prize of $10,000. To up the ante, players could also enter to win three monthly $100,000 drawings. The game was an "instant" hit, and by the end of the first week of marketing, the state had sold $2.7 million worth of tickets. 

Koza said other states soon became interested in offering its own instant ticket, with Scientific Games winning their second contract with New Hampshire. New Jersey, Pennsylvania, and Maryland followed. By 1975, Michigan Lottery introduced the instant ticket to its residents, as state lotteries began to expand across the country. 

"It was a very hectic period of starting a business from basically a one-room apartment and suddenly, we were doing business within the first two years with every state lottery in existence at the time, which I think there were about 11," Koza said. 

More:Instant lottery tickets: Why are they hard to scratch off?

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From state lotteries to the National Popular Vote 

As Arizona, California, Colorado and several other states began implementing their own state lotteries in the early 1980s, Koza was on his way out of the business. In 1982, slot machine company Bally Technologies bought Scientific Games and began incorporating other gambling games such as video poker and multi-deck card shuffler. Koza had a five-year contract with Bally, leaving the company in 1987. Bower would leave as well a couple of years later, Koza said. 

Koza then set his sights on academia. The following year, he moved to California to become a consulting professor at Stanford University. Koza remained at the university for 15 years, teaching computer science and medical information science classes. Meanwhile, it was politics that would remain in the back of his mind. 

While at U-M, Koza published a board game called Consensus that focused on the Electoral College process. Then in the 1980s, he and attorney Barry Fadem ran petition initiatives across the country to establish new state lotteries.  

"We got together and said, ‘Well, maybe we could go from state to state and try to pass some laws to get the president elected by a national popular vote,' " said Koza.

In 2006, the two, plus authors Mark Grueskin, Michael S. Mandell, Robert Richie, and Joseph F. Zimmerman wrote the book, "Every Vote Equal: A State-Based Plan for Electing the President by National Popular Vote." Also that year, Koza and Fadem would create the National Popular Vote, a nonprofit dedicated to eliminating the influence of the Electoral College in presidential elections. Koza and members of NPV developed the National Popular Vote Interstate Compact, which ensures that every vote counts in all 50 states and Washington D.C. The agreement is based on Article 2, Section 1 in the Constitution, which gives states control on how to award electoral votes. The compact will go into effect when enacted by states that have at least 270 of electoral votes combined. Then, every voter in the country will acquire a direct vote for the candidate they want as president. The 270 or more presidential electors will be supporters of the candidate who received the most popular votes in all 50 states, determining the winner of the election. 

According to the NPV website, the bill has been enacted by Washington D.C. and 15 states: California, New York, Illinois, Delaware, Hawaii, Rhode Island, Vermont, Connecticut, Colorado, Maryland, Massachusetts, New Jersey, New Mexico, Oregon and Washington. Michigan is one of eight states where the bill has passed through at least one chamber of government. A total of 3,408 state legislators in all 50 states have endorsed the Popular Vote, claims the organization

"Right now, they're (the Electoral College) chosen on a winner-take-all basis," Koza said. "For instance, the candidate who gets the most votes in Michigan gets all 16 of Michigan's electoral votes, even though in the last election, the statewide majority, which was for Trump, was only a majority of 10,000 votes. The candidate who's ahead by even one vote gets 100% of the state's electoral votes. What that existing system does, it not only frequently elects someone who didn't get the most votes nationwide, but more importantly, it changes the way candidates ignore states." 

Koza said that Michigan was visited only once by vice presidential nominee Paul Ryan during the 2012 election since then-President Barack Obama was ahead in the polls and the state traditionally votes Democrat. However, with Michigan voting in favor of Donald Trump in 2016, Koza believes the state will play a key part in the 2020 election.

"They're going to be campaigning in Arizona, Florida, Pennsylvania, Wisconsin and probably Michigan and New Hampshire," he said. "And then they'll be a couple of more states that will get some attention, but you're talking about 10, 12 states being the whole presidential campaign. We think that's a completely indefensible system, it serves no public purpose or benefit and it has all kinds of bad effects.

"It's (the popular vote) just a system where we think every voter should be politically relevant every year, regardless of where they live, and that the candidate who gets the most votes in all 50 states should become president."