News writer, Interviewer
Two costumed characters worked the Iowa State Fair on August 22, 1985. Mr. Money Bags and Ms. Money Bags greeted fairgoers at the Iowa Lottery's first day of sales. The costumes have vanished. Matt Strawn, CEO of the Iowa Lottery, wishes someone had saved them.
"It would've been a complete trip to have been able to bring those out of storage and use those as part of our 40th anniversary campaign," he exclusively tells Lottery USA.
The missing costumes represent more than nostalgia. They mark the distance the lottery has traveled. From paper scratch tickets to a $500 million portfolio with four product categories. From local prize claims to a digital ecosystem. From modest jackpots to billion-dollar draws that barely move the needle.
Some changes were necessary
Cross-validation tops the list of improvements. That first $1 ticket in 1985 could only be claimed at the retailer who sold it. Today, players can claim prizes up to $600 at any Iowa retailer, with larger claims handled through lottery offices around the state. Strawn commented:
Hearing the stories of the stacks and stacks of tickets that were mailed in and prizes that needed to be sent out, checks that needed to be cut…you can imagine how incredibly inefficient that was.
Security has evolved even more dramatically. Forty years ago, active lottery tickets sat in sales representatives' cars. They attracted thieves throughout the logistics chain. Today's tickets hold no value until activated at the point of sale.
Nobody predicted billion-dollar jackpots would become routine
Players in 1985 couldn't have imagined $50 scratch tickets. They certainly didn't anticipate $1 billion jackpots. Even Strawn admits surprise at how player expectations have shifted during his seven years at the helm. He recalled:
Seven years ago, when I started, you'd start to see real public interest and sales spike as those jackpots approached a half billion to $600 million. Now you don't see that until we approach pretty close to $1 billion.
The lottery has returned $2.6 billion to Iowa's general fund and $44 million to the Iowa Veterans Trust Fund. That veterans fund, funded exclusively by lottery proceeds, represents the most significant evolution in how the state uses lottery money.
"We are the sole source of annual funding for the Iowa Veterans Trust Fund," Strawn says. "Truly the fund of last resort for Iowa veterans in need."
Even local celebrities play
Former Iowa governor Tom Vilsack walked into lottery headquarters one day with a ticket in hand. He'd won $150,000 on Powerball.
Strawn and his team had some fun with it. They brought out the oversized check. They took photos. Vilsack was a good sport about the whole thing.
"Everybody plays the lottery, and anyone can win the lottery," Strawn explained. "It was a fun example of that."
Current legislators and governors can play too. The prohibition extends only to lottery employees and those who provide services to the lottery. No one expected a former governor to show up at headquarters, but it proved a point. The lottery belongs to all Iowans.
Digital engagement is already here
Mobile sales remain a decision for Iowa policymakers. But digital engagement is already transforming how players interact with the lottery. The Iowa Lottery is updating its app and loyalty club. Nearly 90% of second-chance entries now come through the mobile app rather than desktop. Strawn explains:
More and more people want to engage with the lottery in the digital space.
The updated app will launch next year with enhanced security and know-your-customer safeguards.
Rising costs demanded a new approach
The digital shift comes as the lottery faces another challenge: rising costs. Scratch tickets generate roughly two-thirds of Iowa Lottery revenue. Rising printing and logistics costs threaten profitability. Inflation affects both input costs and consumer spending power.
Iowa's response breaks with tradition. The lottery historically contracted with three different scratch ticket providers—Scientific Games, Brightstar, and Pollard Banknote. Each worked under unit-cost contracts where Iowa assumed all portfolio risk.
The new approach shifts that dynamic. Just before Thanksgiving, the Iowa Lottery Commission approved a contract making Scientific Games the primary print vendor. The company now shares management of the scratch ticket portfolio. Strawn continued:
We have also aligned economic interest and shared risk with that product category, moving away from that unit cost model to one that provides a revenue share.
If Scientific Games exceeds forecasted projections, they will receive a small incentive. If they miss projections, they pay a penalty.
The strategy leverages Scientific Games' expertise across jurisdictions while protecting Iowa from enterprise risk.
Portfolio diversification smooths revenue volatility
The scratch ticket reorganization represents one piece of a larger strategy. Fewer billion-dollar jackpots mean revenue declines. Iowa is smoothing those peaks and valleys through portfolio diversification.
InstaPlay saw a complete refresh last year, with updated games, licensed properties, and more frequent launches. Through November, Insta Play revenue jumped 28% year over year.
Iowa will join the initial group of states launching Millionaire for Life next February. The Powerball Xs and Os game, coordinated with the NFL, comes next year. The Iowa Lottery Commission will review Millionaire for Life game rules at its December 16 meeting.
Powerball remains the industry's best asset
The NFL partnership points to a broader strategy. Strawn chairs the Powerball Product Group at the Multi-State Lottery Association. He sees Powerball as the lottery industry's strongest defense against competition from commercial casinos, iGaming, sports betting, and prediction contract markets.
"It is incumbent for lottery to make sure they're fully leveraging the power of the most recognizable brand in global lottery, and that is Powerball," he says.
The roadmap includes a national Powerball app. Partnerships with the NFL and NASCAR represent steps toward cultural relevance. The assets exist. The question is execution.
"The next big thing is how can we work together at scale to make sure that the lottery and the beneficiaries we serve remain part of that broader gaming conversation," Strawn continues.
The Iowa part of the Iowa Lottery
Strawn is only the third person to lead the Iowa Lottery. He's a sixth-generation Iowa farm kid who learned to leave places better than he found them. When he thinks about his tenure, he comes back to that principle:
I do hope that people will think of my time with the lottery as: I never forgot the Iowa part of the Iowa Lottery.
That means serving beneficiaries, creating promotions consistent with Iowa culture, and maintaining operational integrity.
Forty years after Mr. Money Bags and Ms. Money Bags greeted fairgoers, the Iowa Lottery faces challenges those costumed characters couldn't have imagined. Billion-dollar jackpots that fail to excite. Digital competitors that never existed. Rising costs and changing player habits.
But the mission remains unchanged. Players holding tickets deserve a fair opportunity to win. The veterans' trust fund depends on lottery proceeds. And somewhere in Iowa, someone is dreaming about what they'll do if their ticket hits.
Comments