FEELING LUCKY
Lottery ticket sales in Pa. on track for a banner year
HARRISBURG — The Pennsylvania Lottery is on track to set a new high-water mark for ticket sales in its 50-year history.
Lottery executive director Drew Svitko shared last month during the House budget hearing with the Department of Revenue that the lottery hasn’t surpassed that mark yet but said, “We’re having a great year and we are currently projecting that we will end this fiscal year somewhere north of $5 billion.”
Its existing record was set in 2018-19 when it had $4.5 billion in sales.
While much of the hearing was consumed by discussion of Gov. Tom Wolf’s proposal to raise the personal income tax rate and expand the tax forgiveness program, this nugget of good news almost escaped attention.
The lottery generates money to pay for programs for older
Pennsylvanians, and, as Rep. Patty Kim, D-Dauphin County, pointed out during the hearing, the number of them is growing.
Statistics from the Independent Fiscal Office show that senior citizens ages 65 and up represent a growing proportion of the state’s population, including a 6.4% growth in the number of Pennsylvanians 100 years old and up between 2015 and 2020.
Ms. Kim asked Mr. Svitko what changes are needed at the lottery to ensure that funding for the property tax and rent rebate program, prescription assistance and other programs the lottery supports can keep up with demand.
“We are striving every day to generate more sales and profits,” Mr. Svitko said, and would like to see the lottery continue to have the ability to do that.
The only obstacle that Mr. Svitko identified in lottery’s path are the unregulated games of skill that have become increasingly prevalent across Pennsylvania.
But defenders of the games of skill have challenged that notion by taking note of the strong ticket sales that the lottery has logged. Further, they argue that veterans and other organizations depend on revenue from these machines to help fund their operations and contribute to community causes.
While the legality of these games of skill has yet to be determined, Mr. Svitko noted that 28% of lottery retailers have at least one of these machines on their premises and he sees them as competitors for lottery players’ money.
“I think the increase of gaming in the marketplace is dangerous and risky and again, you know, harmful in the long run to us and our mission of generating money for those important programs,” Mr. Svitko said.
Despite that competition, he said, scratch-off ticket sales are up 24% over this time the prior year.
Mr. Svitko credited the strong ticket sales in its traditional lottery games to the lottery staff and “some jackpot luck this year” with both Powerball and MegaMillions having jackpots around $1 billion in January.
Beyond that, he said, scratch-off ticket sales remained strong throughout the COVID-19 pandemic when so many other businesses were hurting.
“Many of our retailers who are doing quite well during the pandemic have been doing well in that they are essential businesses and selling lots of grocery products,” Mr. Svitko said. “Generally, the lottery sales and profits rise and fall with the fate of retail and the sectors in which we have the greatest penetration — grocery and convenience — are doing quite well these days, so we’re benefiting from that.”
It’s not just scratch-off sales that are doing well in the lottery portfolio of games.
According to lottery’s financial statement, iLottery offerings, which launched in May 2018 and allow players to play dozens of games online, had sales topping $433.7 million at the end of December for the first six months of the fiscal year. That compares with $290.2 million for the same period the prior year.
One place where lottery sales are experiencing a downturn is with Keno. Sales for that game at the end of December totaled $18.9 million, down from nearly $30 million the prior year at that time. Lottery officials attribute that to the fact they are mostly sold in bars and restaurants, which have been impacted by the governor’s COVID-19 restrictions.
But if overall sales continue on the path they have been, lottery officials are projecting sales could grow by 12%, or $537 million, when the fiscal year ends June 30 and that would result in a net profit of $1.24 billion for Pennsylvania seniors.