INDIANAPOLIS — The company that manages Hoosier Lottery marketing and operations likely will meet its minimum income requirement this year and not have to pay the state a third consecutive annual shortfall penalty.
IGT Indiana, formerly known as GTECH Indiana, is on pace to sell $1.19 billion in lottery tickets — an all-time Hoosier Lottery record — during the 2016 budget year that ends June 30.
That translates to an estimated $280.7 million in provider net income, which is more than the $270 million penalty-triggering minimum but not enough to hit the $290 million target for incentive pay, according to financial results presented Tuesday to the State Lottery Commission.
Colin Hadden, IGT Indiana general manager, said he was happy with the expected 17.2 percent net income growth compared to 2015.
He said the massive $1.6 billion Powerball prize won in January was responsible for some of it. But Hadden also credited IGT Indiana marketing for stronger than expected scratch-off ticket sales and the popularity of new draw games.
"We are very pleased with the performance in '16," Hadden said. "We're going into '17 with some good momentum."
The five-member state commission that oversees the Hoosier Lottery unanimously approved IGT Indiana's 2017 business plan Tuesday.
It calls for 3.9 percent net income growth over 2016 by focusing on responsibly expanding sales of existing lottery products and introducing this summer a new $2 "Cash 4 Life" twice-a-week draw game that will pay winners $1,000 a day for the rest of their lives.
IGT Indiana must earn at least $290 million for the state during the 12-month period starting July 1 to avoid a penalty equal to any shortfall.
Income above $295 million will be split between the state and IGT Indiana, which also is paid approximately $13 million a year as a management fee.
William Zielke, the lottery commission chairman, said he believes IGT Indiana has a "good, solid, rational plan" to meet its 2017 target that's based on concepts proven over the past three years and not just hope and optimism.
Hoosier Lottery marketing and operations were privatized in 2013. IGT Indiana missed both its 2014 and 2015 minimum income targets.
The deal was rewritten 11 months ago by IGT Indiana and the State Lottery Commission to set more achievable goals.
Without the change, IGT Indiana would have fallen far short of this year's original $365 million minimum net income requirement.