Beat the Lottery!

By now, no doubt, you caught our April Fool's gag FOOLottery!. If for some reason you missed the little ruse, go check out the recap now. It's really quite amusing.

Yesterday, by coincidence, there was an announcement by Scientific Games (Nasdaq: SGMS  ) and the Massachusetts State Lottery Commission about an agreement for a new monitor game. Perhaps I should explain what a monitor game is first. A monitor game allows citizens to fritter away their hard-earned money by playing a game like Keno while eating a meal in a restaurant or taking in a pint of brew at the local pub.

That's right; there is no need to head down to the local 7-Eleven (NYSE: SE  ) to play the lottery. You can do it right from your seat as you enjoy a burger and some fries.

Since we've poked enough fun at the lottery lately, I'll pass, but it is interesting to note that the Massachusetts Lottery and Scientific Games have been partners in creating games for more than 30 years. I find this very interesting because most folks would have been better off by investing directly in the company that provides Massachusetts its games instead of playing the lottery. Scientific Games traded back in 1984 for a split-adjusted $2.61. The firm, which now trades at $23.43, has returned 797% in that time frame -- 11.24% per year. An amazing amount, considering lottery players as a whole are net losers each and every day.

The story is similar with competitor GTech Holdings (NYSE: GTK  ) , which also counts on state lotteries for its customers. The big difference in this case is that you need go back only to 1992, when shares IPO'd at around $4.50, to see how long you could have earned a return of 13.9% per year.

Both GTech and Scientific Games appear to be healthy and growing companies. GTech has even seen fit to institute a dividend. Yep, Fools, the choice is clear. Next time you're waiting in line to buy that Coke and thinking about playing the lottery, perhaps you might want to invest in your state lottery's supplier instead or even in Coke, which has a pretty dandy long-term record of its own.

Fool contributor Nathan Parmelee owns shares in 7-Eleven but has no financial interest in any of the other companies mentioned. The Fool has a disclosure policy.