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State lotteries exceed expectations in 2020

Sep 25, 2020, 4:29 pm

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Despite hardships, lotteries are breaking sales records

By Kate Northrop

In previous months defined by economic hardship brought on by the global pandemic, the lottery industry has proven to be a beacon of light, with some state lotteries defying expectations and exhibiting record sales.

The Texas Lottery, which has made headlines recently for its internationally-ranking Lotto Texas jackpot (now standing at $45.5 million), is also exceeding expectations with its 10th-consecutive record-breaking year. This 2020 fiscal year, the Lottery reported a whopping $6.704 billion in sales, a $452.5 million (7.2%) increase over the 2019 fiscal year, which meant a large contribution to education and other programs.

The Lottery allocated $1.661 billion to the Foundation School Fund and $22.2 million to the Fund for Veterans' Assistance, the largest contributions to the state's education and veteran programs to-date.

"In a year marked by uncertainty in so many ways, these record achievements are especially noteworthy," Chairman of the Texas Lottery Commission Robert G. Rivera said in a press release. "Our retailers should be proud as we are of their hard work and support for the schoolchildren and veterans of Texas. Likewise, we owe a debt of gratitude to our employees and vendor partners for their dedication, attention to detail and hard work in helping us achieve these record results."

Like most other state lotteries, the Georgia Lottery initially saw a dent in sales due to the pandemic in March. The Lottery combated this by pushing online play on its website and mobile app. In the last quarter, the Lottery bounced back and finished up the fiscal year with over a billion dollars in profits and saw the ninth consecutive year in growth.

"Our FY20 results are a reflection of the fortitude and commitment of many," Gretchen Corbin, the President and CEO of the Georgia Lottery said in a news release. "As with all companies, 2020 has been a historic year, challenging us to the max, which makes me even more honored to report this record year of returns for education. Our team has been laser focused on delivering the greatest amount possible to the state in a year where we first focused on outpacing 2019, the year of one of the largest jackpots in history, and then added COVID-19 challenges to our goal to surmount."

Not too far off was the Kentucky Lottery, which posted record sales for the 2020 fiscal year of $1.203 billion, $73.8 million (6.2%) more than last year. The Lottery transferred 278.5 million to the state, with $271.4 million allocated toward college scholarships, grants, education programs, and the Kentucky Educational Excellence Scholarship (KEES) Fund for high school students. Transfers were $7.5 million, or 2.8%, more than last year, also a record for the Lottery in its 31-year history.

"This was truly a successful year for not only the Commonwealth, but players and retailers as well," Kentucky Lottery Executive Vice President and Chief Financial Officer Howard Kline said. "Our players saw a record $801.2 million in prizes paid, while our hard-working retailers realized a record-setting $71 million in commissions."

The Arizona Lottery boasted an exceptional performance, recording its second consecutive record-breaking fiscal year. Total sales for the state Lottery reached more than $1.09 billion while prize payouts exceeded $1 billion for the very first time, which was boosted thanks to the $414 million Mega Millions ticket claimed there in June.

The North Carolina Lottery surpassed last year's sales by $20.6 million, nearly 3%, to reach $729.8 million in revenue. The Lottery generated an average of almost $2 million a day in the 2020 fiscal year.

The Minnesota Lottery made headlines as well, boasting their third straight year setting a new sales record and reaching $668.6 million in revenue. Over $423 million, or about 63%, went to players in prizes, while $156 million was directed to state's general fund and environmental and conversation programs.

Although multi-state draw games have not been very popular as of late, quite a few states attribute their successful performances to substantial increases in scratch-off sales that supplement them. Texas saw a 14.7% increase in scratch-off revenue in the past year alone, amassing $5.556 billion — that's 82.9% of the Lottery's total sales.

In another instance, the Kentucky Lottery saw sales for multi-state games Powerball and Mega Millions plummet $23.6 million (32.1%) and $26.1 million (41.4%), respectively. While scratch-off tickets normally make up a large portion of game portfolio sales to begin with, Kentucky reported a hefty $71.9 million (10.7%) increase in scratch-off sales since last year.

"From a situation where things initially looked like they could turn bleak, we ended up with a win-win all the way around," Kline of Kentucky said.

While everyday life continues to stabilize and players eventually, and hopefully, regain confidence in draw games once more, it remains to be seen how current events shape future trends in the lottery and gaming industry. Given the record-breaking performances of multiple state lotteries, those prospects look very reassuring.

"The start to the new fiscal year looks very promising, but we're in uncharted waters," Marty Gibbs, the Kentucky Lottery's Interim President and CEO said. "The continuing pandemic — and its effects on the economy — do create some level of uncertainty moving forward. We'll continue to provide fun and entertaining games in a socially responsible manner nonetheless, as we know Kentucky's college students are counting on us now more than ever."

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