The Hoosier Lottery is predicting record-high revenue for fiscal year 2019 after exceeding the $1 billion threshold in March—the earliest point it has reached that milestone.
The bottom line for the state—an estimated $309 million from the total lottery proceeds—also would be a record.
According to a financial report presented to the Hoosier Lottery Commission on Tuesday morning, IGT Indiana, formerly known as Gtech Indiana, has already sold $1.12 billion worth of tickets in the 2019 fiscal year as of April 30.
IGT Indiana expects that to increase to $1.33 billion before the fiscal year ends on June 30. That would set a record for the Hoosier Lottery.
Those sales could result in a “provider net income” of $323 million—$23 million higher than the $300 million minimum threshold for IGT Indiana to avoid paying a penalty and 5.6% above what the lottery had budgeted for 2019. (Provider net income refers to total revenue minus prizes paid out and game and provider expenses.)
The 15-year contract outlines minimum net income amounts that IGT Indiana must hit in order to avoid paying a penalty, as well as incentive net income amounts that would trigger an incentive payment.
IGT Indiana received its first incentive bonus last year—the first time since contracting with the state in 2012—and is on track to receive an incentive payment again this year.
For fiscal year 2019, the incentive payment threshold is $305 million. If the estimates hold, IGT Indiana will receive half—or $9 million—of the excess income, and the Hoosier Lottery will receive the other half.
That would be slightly lower than last year’s incentive payment of nearly $9.2 million.
Next year, the minimum income target stays at $300 million, but the incentive mark increases to $310 million.
The higher-than-expected income this year also means more revenue for the state.
The lottery covers prize payouts and operating expenses, but otherwise all surplus revenue goes to the state, which uses the proceeds to reduce residents’ automobile excise taxes, support state pension funds and finance other projects.
Factoring other expenses and income into provider net income, the Hoosier Lottery estimates that the state's take will be $309 million, which would be another record high. Last year, the lottery returned $306 million to the state, which set a new record.
As of April 30, the increased revenue seems to be driven by higher sales in big jackpot draw games, like Powerball, Hoosier Lotto and Mega Millions. Mega Millions revenue is nearly 73% higher than last year and 70% above what the lottery expected it to be this year.
Mega Millions ticket sales skyrocketed in Indiana in October when the jackpot reached $1.6 billion, making it the biggest lottery prize in U.S. history.
“That has really helped contribute to our increased revenues,” said Carrie Stroud, chief of staff for the Hoosier Lottery.
Total sales for scratch tickets and non-jackpot draw games are also higher so far this year than the same 10-month period in the previous year.
The state saw revenue of $1.12 billion through April 30, up from $1.07 billion in the same period the previous year.
The Hoosier Lottery will present unaudited year-end figures to the commission at its meeting in August.