INDIANAPOLIS — Hoosier Lottery revenues dipped slightly during the 12-month period that ended June 30, but the lottery's private operator still managed to generate record income for the state.
Unaudited financial results recently presented to the State Lottery Commission show Hoosiers spent $1.2 billion on lottery tickets during the 2017 budget year, a decline of $6.9 million, or 0.6 percent, compared to 2016.
However, a similar reduction in game and provider expenses enabled lottery operator IGT Indiana, formerly known as GTECH, to produce a net income of $293.9 million.
That was more than the $290 million minimum provider net income necessary to avoid a shortfall penalty. It just missed the $295 million total required for IGT to earn an incentive payment on top of its approximately $13 million annual management fee.
After deducting various lottery commission expenses, the state will reap $289.4 million from the Hoosier Lottery for 2017 — an increase of $7.9 million, or 2.8 percent, compared to last year.
"Through innovation, cost savings and hard work, our team was successful in making 2017 another record year for the Hoosier Lottery," said Sarah Taylor, executive director.
Lottery profits are used by Indiana to provide Hoosiers an annual vehicle excise tax credit, fund state building projects and support teacher, police and firefighter pensions.
According to the lottery's financial report, scratch-off tickets produced 75 percent of lottery revenue, the "big jackpot" draw games of Powerball, MegaMillions and Hoosier Lotto brought in 15 percent and other daily and instant draw games accounted for 10 percent.
The report shows that Powerball sales dropped 25 percent compared to last year when a record $1.6 billion jackpot was available.
You have free articles remaining.
At the same time, scratch ticket revenue growth nearly replaced all the lost Powerball spending, thanks in part to a new scratch-off ticket being introduced, on average, every single week of the year.
"Meeting our goal of increasing revenue to the state was a challenge following the extraordinary Powerball jackpot," Taylor said.
For the 2018 budget year, which began July 1, IGT Indiana must generate $300 million in net income.
Anything less will trigger a shortfall penalty; anything more will be evenly split between IGT and the state.
The lottery's business plan calls for increasing revenue by $66 million, or 5.5 percent, through June 30, 2018, primarily through scratch ticket sales.
Planned new scratch games include "Set for Life" tickets priced at $1, $2, $5 and $10 that pay winners between $1,000 and $10,000 a month for 25 years, as well as the new $5 "Black Pearl" scratch ticket that doubles as a draw game ticket.
Under the 15-year lottery privatization contract, inked in 2012 under former Gov. Mitch Daniels, IGT originally pledged to generate $410 million in net income during the 2018 budget year.
That contract was revised in 2015 by former Gov. Mike Pence's administration to set this year's more achievable goal of $300 million.