Scratch card games are incredibly popular in the Canadian marketplace. However, only recently have researchers started to systematically analyze their structural characteristics and how these in turn affect the gambler. We present two studies designed to further understand the underlying physiological and psychological effects that scratch cards have on gamblers. We had gamblers (63 in Experiment 1, 68 in Experiment 2) play custom made scratch cards involving a small win, a regular loss and a near-miss—where they uncovered two out of the three symbols needed to win the top prize. Our predictions were that despite near-misses and losses being objectively equivalent (the gambler wins nothing) gamblers’ reactions to these outcomes would differ dramatically. During game play, skin conductance levels and heart rate were recorded, as well as how long gamblers paused between each game. Gamblers’ subjective reactions to the different outcomes were then assessed. In both studies, near-misses triggered higher levels of physiological arousal (skin conductance levels and heart rates) than losses. Gamblers paused significantly longer following small wins than other outcomes, and reported high arousal, positive affect and urge to gamble—a constellation of results consistent with their rewarding properties. Importantly near-miss outcomes were rated as highly arousing, negative in emotional tone, and the most frustrating of all three outcome types examined. In Experiment 2, when we measured subjective urge to gamble immediately after each outcome, urge to gamble was significantly higher following near-misses than regular losses. Thus, despite not rewarding the gambler with any monetary gain, these outcomes nevertheless triggered higher arousal and larger urges to gamble than regular losses, a finding that may explain in part, the allure of scratch cards as a gambling activity.