With the numbers complete for May, the Iowa Lottery is already well over its projection for income in this fiscal year that ends June 30th. Lottery CEO, Terry Rich, says their budget projected a profit of $62-million.
“We actually just passed $80-million that is going to be given through the end of May to the state of Iowa with one month to go. So that obviously is surpassing all expectations,” Rich says. “It’s been a fun year, which also means we’ve given away a lot more money….so when the stars align, it really gets fun.”
The alignment of the stars Rich talks about came in the form of some big Powerball jackpots that drove sales. “Of the over 300-million dollars in sales, $77-million is attributed directly to Powerball. Now that’s up about $20-million over last year in sales of Powerball. So, it has had a good run this year,” Rich says.
The Powerball format was changed to increase the cost of a ticket from one to two dollars with the idea of creating bigger jackpots. “The two-dollar Powerball is starting to exceed all our expectations. And this year, four times we have had a $300-million jackpot,” according to Rich.
“We think that will continue, but we really don’t know. It really truly is the luck of the draw — this year it seems like all the stars aligned for some really huge jackpots for Powerball.” The instant scratch tickets are still the top selling product of the Iowa Lottery.
Their sales appear to be getting some boost from the sales surge created by the huge Powerball jackpots. Rich says it look as though people play a little bit more on other games when the Powerball jackpots get bigger. The sales of scratch tickets are up around 12-million dollars at the end of May compared to the same time last year.
Rich says the lottery business can by cyclical, but he thinks sales will remain strong through the rest of this fiscal year and into the next one. “I think that it is very solid trends that we’re seeing. I think that we’ll continue seeing those trends for the next 18 months of so,” Rich says, “that’s bucking the actual national trend, which has been coming down in the early part of this year.”
Rich says the increase in lottery sales also mean an increase in the amount of sales taxes generated. The state paid out $186-million in prize money, and he says sales taxes on the winnings of Iowans from the Powerball alone are around $5-million. The sales taxes from other products add another $3-million or so to that figure.