15 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2026 Continued on page 24 Under the hood: Increasing complexity The Iowa Lottery has become exceedingly more complex throughout the years. Players can spend as little as 50 cents or as much as $50 per ticket to play scratch tickets. “About two-thirds of our total revenue comes from scratch tickets,” Strawn said. “That is the straw that stirs the drink that is the Iowa Lottery.” Other games include non-scratch tickets and multistate games like the Powerball and Mega Millions, making for a lot of money exchanging hands. “The evolution of the state’s lottery, the complexity of the technology that undergirds the gaming system, I can’t imagine that was something that was remotely envisioned with that first simple paper ticket,” Strawn said. For example, he added, someone who had a win on a lottery ticket in 1985 could only get paid out by the store that sold them that ticket. Now, he said, with cross validation, they can go to any lottery retailer and claim their prize. Most people in the community see the celebration when someone wins a lottery jackpot, but there is much more to the organization than oversized checks. There are three separate companies that print lottery tickets. “[The public] sees the confetti cannons that go off when you’re giving away a million-dollar check, and the picture that’s in the paper, on the news or showing up in your digital feed, but when you peek under the hood at the lottery, you realize the amount of logistics that go into moving our product around the state,” Strawn said. To keep games relevant and appealing to the public, the lottery will produce new ticket styles and games periodically. Concept to market for new ticket styles is about six to eight months, including design, graphic art production, putting together a price structure and working with printers on the new design. Last winter, the lottery began selling a Pac-Man ticket and this past summer, dinosaurs donned the new Jurassic World scratch game. Licensing fees for tickets that incorporate major brands are expensive, so incorporating those types of tickets into the lineup is done infrequently. “We’re not immune to the rising input costs that everyone has felt, particularly with the print product. The logistics associated with transporting that product around, getting it to Ankeny where the central warehouse is and then distributing it out weekly to retailers,” Strawn said. “It’s a much more complex business when you think about everything that goes into putting that $5 scratch ticket on the counter.” Earlier this year, the lottery partnered with Fareway stores to install technology to sell lottery tickets at checkout. Doing so meant integrating three software systems with varying code and security requirements: Fareway’s point-of-sale system, the national lottery gaming system and the Iowa Lottery’s central gaming system. It’s also a split tender system; because the lottery has age restrictions, tickets cannot be bought with credit cards. Tickets are printed on the same paper as grocery receipts, but printed separately. The national lottery system has developed a specific application programming interface, or API, for this purpose. “I can see a future where lottery functionality is embedded into the releases of those point-of-sale platforms,” said Strawn, who is also vice president of the board of directors of the Multi-State Lottery Association. Upping the ante on security The lottery uses a predictive ordering system and a sales staff to determine which retailers need tickets replenished. Orders go to the organization’s Ankeny warehouse, are picked like in any typical warehouse and shipped out weekly. When tickets are sent to retailers, they are sent in secure bags yet they have no monetary value until they are checked in at a store. “Those tickets are effectively inert while they are in transport and in shipments. Then the individual retailer determines what their process is once those tickets arrive in store,” Strawn said. “Some retailers, depending on what their control process is, will wait for the lottery sales rep to come to the store to effectively hit the tickets with the [barcode reader], and the point-of-sale system activates those tickets and provides value to those tickets. Some stores will empower their own staff to do that, it depends on what their internal processes and accounting mechanisms are.” Lottery sales representatives visit retailers to check shipments and inventory levels and educate managers on promotions and compliance initiatives. There is also an investigations team, composed of former law enforcement officers, who conduct unannounced and undercover compliance checks of retailers and look into any theft allegations. They will work with corporate retail chain security personnel and communicate with local county prosecutors on issues. “There are all these little nuances that come with this product, and there is a constant effort to stay one step ahead of folks that maybe see the lottery as an easy target,” he said. “I would caution them, it is not. “When you think of the sophistication that is built into the tracking of a lottery product; we have the ability to pinpoint if somebody steals a lottery product and tries to cash it in. Of course, most of the convenience stores or grocery stores these days have internal security footage that we’re able to draw upon.” A conversation about Iowa Lottery security isn’t complete without mention of the Eddie Tipton scandal. Tipton, former information security director at the Multi-State Lottery Association, confessed to rigging random number generators to rig lottery drawings. In 2015, he was convicted of rigging a 2010 $14.3 million Hot Lotto drawing. He later confessed to rigging other drawings in multiple states. He was convicted and served a five-year prison sentence. Theresa Valada, a member of the Des Moines Community Playhouse, kept a sunny smile through the rainy weather on the first day of Iowa Lottery sales as she greeted State Fair visitors while in costume as a lottery MoneyBags character. Photo courtesy of the Iowa Lottery.
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