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State lottery operator falling short of goal

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The company that manages the Hoosier Lottery is going to have to sell a lot of scratch-off games and other tickets in May and June if wants to avoid making a payment to the state, the Indiana Lottery Commission learned Tuesday.

Gtech Indiana promised in its 2012 bid to become the lottery's private operator that it would reach net income of $256 million for the 2014 fiscal year, which ends June 30. After subtracting the lottery commission's own expenses, that would mean $248 million would flow to state coffers.

However, Gtech is not on pace to hit that target, according to a presentation Tuesday from lottery commission staff. Its revenue from lottery products through April 30 was $852.4 million and will need to reach $1.06 billion by June 30 in order to reach the goal of $256 million in net income.

To generate about $154 million in revenue in two months would mean that Gtech would have to exceed its budgeted sales figures by 14 percent. It's currently about 3 percent below budget.

If Gtech does not reach the $256 million goal for net income for the state, it will have to make up the shortfall.

Commission staff said Tuesday that Gtech thinks it can hit the target if several favorable trends continue. The company assumes the Powerball and Mega Millions jackpots will continue to roll over, generating higher sales through June 30. The company also expects a recent rise in sales of the game Cash 5 to continue, and for scratch-ticket sales to continue at historic highs.

In October 2012, the commission signed a 15-year management contract with Gtech Indiana—a subsidiary of Rhode Island-based lottery giant Gtech Corp. The company has promised to bring the state $1.76 billion over the first five years.

Net income is supposed to ramp up to $410 million by 2017 and 2018.

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  • What's going on?
    The lottery is not fun anymore. They have made it very difficult to win a decent amount of money for many of the games they offer. There are a lot of questions regarding changes made to some of the games. 1) Why did it take 6 months for someone to win the Hoosier Lotto? 2)Why do they not have a live drawing for the Hoosier Lotto like they have for the Daily 3 and Daily 4? Obviously the size of the jackpot is the reason, and the fact they can control the Hoosier Lotto drawing behind closed doors, and decide when to have a winner. 3)For Cash 5, if you got 2 numbers right in the past, you would win a dollar, now you win a free ticket. 4)For Quick Draw, they have added 2 drawings per day, and increased the amount to play per ticket from $1, to $1, $2, $3, and $5 per ticket. Also they have been very stingy with large payouts for this game. I could go on and on with some of the other games but obviously, there are some revenue issues, and someone should look into the matter. Who are they accountable to? It wouldn't surprise me if someone is embezzling funds, or distributing funds to other agencies or companies. The lottery should be discontinued in Indiana.
  • Troublesome
    I am an occasional player of the online games and what I find troubling is the lack of disclosure currently prevalent at the Hoosier Lottery. Powerball and Megamillions publish their cash option amounts on their respective websites; the Hoosier does not. The payout on the Hoosier Lotto is very troublesome. April 29, 2013, Cledus Potts of Newport won the $10 million Hoosier Lotto and elected to receive the cash option. His before tax amount was only $3,374,365! In comparison, the next Megamillion game jackpot will be $15 million or a cash option amount of $8.6 million; 57% of the total cash whereas the Hoosier Lotto's payout to Mr Potts was barely a third! Something is seriously wrong here.
  • Ruined It and More
    I agree with Dave. They not only have messed up a good game, but it is also fixed to. If the numbers are suppose to be random, how can they say there will be more winners during a certain time frame, as they had did back in February (EZmatch Tons Of $25s Promotion: For a limited time, EZmatch payouts will award thousands of $25 prizes instantly! From February 3 - 15). The weekend that the Hoosier Lotto change went into effect, suddenly there was a winner on that Saturday, so the jackpot would be able to start off at the new amount on that Wednesday. They control the Illinois Lottery too and Illinois has not be happy at all with their services.
  • New York?
    Powerball went to $2 long before Gtech took over operations. Not sure what ggal's complaint is. You can still play Lotto or Mega Millions for $1 if you want a shot at millions on the cheap.
  • Lottery
    The State will receive much more money than they ever had from the lottery in the past. Almost 13% more. So people are buying the sales goals are more aggressive. Here is a much better article on the lottery. http://www.journalgazette.net/apps/pbcs.dll/article?AID=/20140520/LOCAL06/140529945/1002/LOCAL
  • Not New Yok
    We are not New York where Gtech is from. I won't pay $2 for a chance to win. It was better when Indiana ran the Lottery. I imagine cheaper for the lottery as well.
    • Ruined it
      They have ruined the lottery. For example, they changed one of the most popular games (Quick draw) and cut many prizes by half. No wonder they are falling short. Bring it back to state control, please.

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