PA Lottery Closes Fiscal Year with $3.8 Billion in Sales, Nets More than $1 Billion to Benefit Older Pennsylvanians

MIDDLETOWN, Pa., July 22, 2014 /PRNewswire-USNewswire/ -- The Pennsylvania Lottery finished fiscal year 2013-14 with $3.8 billion in sales, dedicating $1.08 billion in net revenue to support programs benefiting older Pennsylvanians.

Fiscal year sales were $99.9 million, or 2.7 percent, above the previous year and prior sales record of $3.7 billion. Net revenue grew by $14.1 million, or 1.3 percent, over the previous year and prior record.

The Lottery paid nearly $2.4 billion in prizes in 2013-14, an increase of $77.7 million over the previous year and a new all-time record. More than 62 cents of every Lottery sales dollar was returned to players in the form of prizes, and 76 Lottery players won prizes of $1 million or more last year.

The Lottery's more than 9,100 retailers, many of them family-owned small businesses, earned $202.4 million in fiscal year 2013-14, an increase of $6.3 million over the previous year.

"This growth over last year is thanks to our players and retailers, who understand the great things Pennsylvania Lottery games provide," said Lottery Executive Director Sil Lutkewitte. "For the third consecutive year the Lottery generated more than $1 billion to support vital services and benefits for older adults across the state. This is great news, but the numbers also underscore the importance of getting legislative relief from the statutory minimum rate of return to position the Lottery to deliver more dollars to senior programs in future years."

By law, the Lottery had to return at least 27 percent of ticket sales revenue to the Lottery Fund to pay for programs benefiting older Pennsylvanians last year. It returned 28.5 percent for senior programs, the lowest percentage of sales revenue, yet highest dollar amount in the history of Lottery.

While terminal-based games deliver the highest net revenue as a percentage of sales for the Lottery, consumer preference continues to shift toward instant games, which demand a higher payout percentage, and therefore deliver a lower percentage return for the Lottery Fund and senior programs. 

Instant games sales for the fiscal year totaled $2.4 billion, which was $139.7 million, or 6 percent, higher than the previous year. Instant games accounted for 64.3 percent of the year's total game sales, a 2 percent increase over 2012-13. 

Sales for terminal-based games – which include The Daily Number, Big 4, Quinto, Treasure Hunt, Cash 5, Match 6, Millionaire Raffle, Powerball and Mega Millions – totaled more than $1.35 billion for the fiscal year, which was $39.8 million, or 2.9 percent, below the previous year.

Terminal-based games Powerball and Mega Millions deliver the greatest return as a percentage of sales to senior programs, but sales of those games fluctuate dramatically based upon jackpot level, as evidenced by the nearly $100 million drop in Powerball and Power Play sales from fiscal year 2012-13 to 2013-14.

"Our mega-jackpot games are exciting because they can generate tens of millions of dollars in senior funding over a span of days when jackpots get high," said Lutkewitte. "But in years where large jackpots are less frequent, instant games account for an even greater percentage of sales, and we move closer and closer to that statutory minimum rate of return.

"There are legislative proposals in both the House and the Senate that would decrease the minimum rate of return to 25 percent long-term, and this legislation is key to enabling future growth in Lottery funds for senior programs."

Without legislative action to lower the mandated rate of return, which jumps back up to 30 percent for fiscal year 15-16, the Pennsylvania Lottery will have to make adjustments to its marketing plan, including diminished payouts, which will likely harm sales and reduce profits by hundreds of millions of dollars in just a few years.

The Lottery's administrative costs decreased to 2.04 percent of sales, down from 2.07 percent in the previous year.

"Nearly 98 cents of every Pennsylvania Lottery dollar goes back to the community in the form of prizes paid to winners, benefits for older Pennsylvanians and commissions to retailers and vendors," said Lutkewitte. "We are proud to contribute to the economy while we deliver crucial funding to benefit older adults, and we're eager for the legislature to enact relief from our current statutory rate of return so we can deliver even more for the benefit of our seniors."

About the Pennsylvania Lottery: The Pennsylvania Lottery remains the only state lottery that designates all its proceeds to programs that benefit older residents. Since its inception in 1971, the Pennsylvania Lottery has contributed more than $24.7 billion to programs that include property tax and rent rebates; free transit and reduced-fare shared rides; the low-cost prescription drug programs PACE and PACENET; long-term living services; and the 52 Area Agencies on Aging, including full- and part-time senior centers throughout the state.

The Pennsylvania Lottery reminds players to check every ticket, every time. Players must be 18 or older. Please play responsibly. For help with a gambling problem, call 1-800-848-1880.

For drawings results, winning numbers, winners' stories and to subscribe to the Lottery's RSS news feed, visit www.palottery.com. Like us on Facebook at www.facebook.com/palottery or follow us at www.twitter.com/palottery. 

Media contact: Elizabeth Brassell, 717-787-6960

Editor's Note: The PA Lottery's 2013-14 annual report is available at www.palottery.com, under "About the PA Lottery," then "Annual and Economic Reports." 

SOURCE Pennsylvania Lottery