Pennsylvania Online Lottery Sales Nearly Double In FY 2019-2020

The Pennsylvania Lottery released its annual report (for the fiscal year 2019-2020) earlier this month. The topline numbers show a near 5% decrease in retail sales, but that drop-off comes with a giant asterisk: the coronavirus shutdown. Nor does it factor in the state’s growing online lottery sales.

Draw games took the biggest hit, falling 18.6% year-over-year. Conversely, instant win sales rose 7.2%, while Keno and monitor games rose 15%. And to no one’s surprise, Pennsylvania online lottery sales skyrocketed, as the coronavirus shutdowns further boosted organic growth for the nascent industry.

As such, online sales nearly doubled year-over-year, adding another $731 million to the state’s retail lottery sales of $4.47 billion. With the inclusion of online sales, total lottery sales rose 6% (growing by some $320 million) in 2019-2020.

2019-2020 marks the first time the state’s lottery sales surpassed $5 billion.

When it Comes to Revenue, Retail Is Still King

Lottery sales contribute a lot of money to state coffers. Total net revenue in Pennsylvania from its retail and online lottery was $1.14 billion for FY 2019-2020.

The breakdown is as follows (the $22.5 million discrepancy between total revenue and online plus retail revenue is due to a line item called the “retail incentive program”):

• Retail net revenue: $1,100,938,004
• Online net revenue: $63,379,426

$63 million is nothing to sneeze at, but it’s a drop in the bucket compared to the $1.1 billion the state receives from retail lottery sales.

Retail revenue dwarfing online revenue isn’t shocking; considering retail sales are more than six-times online sales. That said, the revenue difference is far more striking, with retail outpacing online by more than 17-times.

A big reason for this is the hold percentage. On the retail side of the ledger, the state keeps more than 25% of retail sales. Conversely, the hold percentage for online instant win games (instant wins account for the vast majority of online sales) is 13%. And, unlike the retail numbers, that doesn’t account for promotions and costs. Factoring that data in, the state receives just 8.6% of online sales.

Interesting line items

• There is a $56,986 line item for lost/stolen tickets.
• The Pennsylvania Lottery’s administrative costs are $114 million, with advertising accounting for $43.7 million of the total.
• Pennsylvania profited from interest accrual to the tune of $2,873,105.
• Online draw game sales were just .6% of total online sales. The sale of online draw tickets began on January 16, 2020.
• After launching in August 2018, and expanded in November 2019, Xpress Sports (Pennsylvania’s virtual sports offering available at retailers) generated $6.5 million in sales. Keno launched around the same time (May 2018) and generated $47.1 million in FY 2019-2020.