Pennsylvania Lottery nets $31.3m profit in first year of online games


pennsylvania-ilottery-online-game-salesNew online gambling options helped Pennsylvania’s lottery set new revenue and profit records, although the lack of these options didn’t stop other state lotteries from setting their own records.

On Thursday, the Pennsylvania Lottery announced that it had generated sales of over $4.5b in the 12 months ending June 30, a 7.2% improvement over fiscal 2017-18. Profit hit $1.14b, up $49.6m from the previous year and $20m more than the previous record set in 2015-16.

Scratch-Off tickets accounted for two-thirds of 2018-19’s sales, rising 6% to a record $2.9b. Draw ticket sales were up 8.7% to nearly $1.4b thanks to a nearly one-fifth rise in multi-state draws such as Powerball and MegaMillions.

The Lottery’s new iLottery games reported sales of $381m in their first full year, from which the Lottery drew profits of $31.3m. The new ‘monitor games,’ including Keno and the Xpress Sports virtual games, reported revenue of $46.7m and profit of around $10m.

The iLottery products were fiercely opposed by seven of the state’s brick-and-mortar casino operators even before their May 2018 debut. The casinos argued that the games were too much like online slots, which were supposed to be reserved for the casinos. The casinos filed a lawsuit aimed at halting the games but this was struck down in July based on the court’s view that the casinos had failed to demonstrate that they’d suffered any real harm.

There are only a handful of US state lotteries that have launched online sales in some form. The Kentucky Lottery, which launched its online draw tickets and instant-win games in 2016, just reported that iLottery sales in the state’s most recent fiscal year hit $26.8m, twice the sum the vertical generated the previous year.

Poking another hole in the theory that online options would cannibalize retail sales, the Kentucky Lottery Corporation’s overall sales were up 8.3% to a record $1.13b, leading to a record profit of $272.7m.

Even states without online sales are reporting record annual results. In Massachusetts, lottery sales hit a record $5.5b, from which the state earned a record profit of $1.09b. The Iowa Lottery saw its fiscal 2019 sales rise 5.4% to a record $391m, of which $250.6m came via scratch-games. In West Virginia, sales rose 17% year-on-year to $1.143b, the 17th straight year that sales have topped the $1b mark.