Strong multistate game sales outweigh scratch-off weakness

Thanks in large part to five multistate jackpot runs so far this fiscal year – in July, August, October, March, and April that each topped $1 billion (there were three jackpots that each topped $1 billion during all of FY 2023), the Hoosier Lottery expects to return $368.641 million to the General Fund at the end of June.

This figure would represent an increase of approximately $32.366 million and almost 10% (9.6%) from budget, and an amount that would be marginally – almost $1.61 million (- 0.4%) – short of the $370.246 million turned over to the State from Fiscal Year 2023 proceeds.

For the current fiscal year through April 30 (the first 10 months of Fiscal Year 2024), the anticipated revenue return to State coffers is running $37.0 million (13.2%) ahead of budget, as well as $4.0 million (1.3%) greater than at the same point in the prior fiscal year. Overall sales for July – April are $8.1 million (0.6%) greater than at the same point in the prior fiscal year, and run $58.6 million (4.1%) greater than budget.

Revenue from large Powerball and Mega Millions jackpot sales – as well as a near-record run for Hoosier Lotto – mean that jackpot game sales are running $71.904 million (41.88%) ahead of budget to this point in FY 2024. Last year at this point, State Lottery Commission of Indiana Chair Bill Zielke acknowledged that “The big jackpots carried the day,” and that was more so the case this year. “[E]ven as one roll ends, you start another and that seemed to really help us this year,” observes Hoosier Lottery Executive Director Sarah Taylor.

With two months remaining in FY 25, Hoosier Lottery scratch-off game sales are forecasted at slightly less than $1.071 billion, $15.6 million (- 1.4%) less than the more than $1.086 billion during the same 10 months in the prior year, and $23.0 million (- 2.1%) less than the almost $1.094 billion budget. Lottery chief Taylor notes that this is in line with a national softening of instant ticket sales.

Powerball revenue is tracking $16.7 million (14.5%) greater than the same point in the prior fiscal year, and $32.4 million (32.5%) greater than budget. Mega Millions revenue is less promising than Powerball, landing $12.8 million (- 16.4%) below the 10-month bottom line from the prior year fiscal year, but still runs $26.6 million (68.8%) greater than budget. Hoosier Lotto revenue is $8.6 million (23.2%) ahead of July – April numbers from the prior fiscal year, and $12.7 million (38.6%) greater than budget.

The non-jackpot draw games (Daily 3, Daily 4, Ca$h 5, and FastPlay) are all running collectively ahead of both budget ($9.8 million and 6.5%) and same-period levels ($11.3 million and 7.6%) in the prior fiscal year.

The sole exception to the non-jackpot draw game success seems to be Cash POP, which is behind budget, but officials have determined that it is not cannibalizing other games (so it is effectively still incremental income overall).

The Hoosier Lottery expects to maintain balance on expenses. The overall prize payout is forecasted to remain flat on a percent of sales basis at 65.6%, while lottery expenses look to be 4.4%, slightly up on a year-over-year percent of sales basis

Provider Net Income is estimated to be $378.500 million as of March 31 and $394.000 million as of April 30 (up from a forecasted $355.467 million this fiscal year), which would result in an incentive payment of $19.0 million to IGT Indiana, about $10 million more than budget, but down slightly from $19.775 million paid in FY 2023. The management fee is projected at 0.7%, flat over-the-year on a percent of sales basis.

Here is your historical look (and peek ahead) at Minimum Net Income and Incentive Net Income that determine management fees paid to IGT Indiana:

Payments to IGT Indiana are calculated this way: