This story by The Associated Press was first published on May 22. It was updated on May 26 to correct that lottery contractor IGT Indiana met its minimum sales levels last year and didn’t owe any penalty to the state. It was also updated to correct three erroneous references to the company as ITG.
A big increase in Hoosier Lottery ticket sales during the COVID-19 pandemic has fueled what officials expect will be a record amount of annual profit going into the state’s bank accounts.
Officials told the State Lottery Commission this past week that they projected that scratch-off ticket sales would be up almost 27% for the fiscal year ending June 30 compared to a year ago. Sales for daily draw and big jackpot games such as Powerball and Mega Millions are expected to finish 19% ahead of last year.
That will result in an anticipated $368 million for the state from about $1.7 billion in lottery sales. That profit is up about $63 million, or 20%, from a year ago when overall sales dropped during the early months of coronavirus-related shutdowns.
The company hired to operate the lottery, however, doesn’t expect another jump next year as coronavirus-related restrictions are lifted and people can take part in more activities.
“We have budgeted a decrease from the historical year that we’ve experienced,” said Melissa Pursley, IGT Indiana’s chief operating officer. “As Hoosiers begin to have more options to spend their entertainment dollars, we believe that our sales will be impacted.”
The state directs about $235 million of the lottery proceeds toward reducing auto excise taxes, with $60 million going to pension funds for teachers, police officers and firefighters.
The lottery profits for this year will result in a $19.7 million incentive payment to IGT Indiana after the company didn’t receive an incentive payment last year with the lower sales levels.
Lottery Commission President William Zielke said looking back at all the unknowns over the past year with the pandemic, it’s “a real compliment to the whole team to react to those risks in a positive way to overcome some of those obstacles.”
IGT officials highlighted several new scratch-off games introduced this year, along with jackpots reaching $1 billion for Mega Millions and $700 million for Powerball, for helping boost ticket sales.
Pursley said IGT was projecting an 8% decline in sales for the coming year, although it expects to again meet the minimum sales level set in the company’s contract.
Zielke said he was comfortable with IGT’s plans after such a tumultuous year.
“I think this plan is conservative in the sense that it hasn’t over relied on some things that may have just been unique to last year,” Zielke said.
Hoosier Lottery proceeds to the state have increased by about 50%, from $205 million in 2012, which was the last year before the privatization contract took effect. But it remains below the original goal of $410 million in annual profits by 2018 under the contract that was renegotiated in 2015.