A multi-channel separation mechanism assembly for a lottery or other ticket dispensing machine includes a separate detachable feed mechanism associated with each separate feed channel, such that the feed mechanism for a single channel can be removed and replaced without replacing the entire assembly. Each such detachable feed mechanism includes a compact transmission wherein drive is efficiently transferred from a vertically-oriented feed motor to horizontally-oriented feed rollers. Each feed channel is additionally equipped with a bidirectional mechanical flag which triggers an optical sensor to detect presence of a ticket strip in the channel while still allowing appropriate reverse motion of the ticket strip within the associated channel.