House passes bill permitting (slightly) better odds for Pennsylvania Lottery players

in Lottery


House passes bill permitting (slightly) better odds for Pennsylvania Lottery players

A new bill pending in the state legislature wold allow the Pennsylvania Lottery to sell more of its higher-priced, instant lottery games, cutting the profit percentage but bringing in more dollars. The house always wins in the Pennsylvania Lottery.

And that’s not going to change.

But ticket-buying players may win a little more in the coming years under the terms of a bill that passed the state House of Representatives Thursday by a 188-4 vote.

The measure, which now moves to the state Senate for further consideration, would reduce the mandated profit margin for all Lottery games from the current 25 percent, the standard since 2014,

Lottery executives have sought the flexibility under the theory that a better win rate for players will inspire more game and ticket sales, which in the long run will boost the yearly profit that the Lottery returns to the state for a variety of senior citizen programs.

Here’s how that’s going to work in the near-term future.

“The Pennsylvania Lottery, and the lottery industry as a whole, is experiencing significant growth from players gravitating toward scratch-off tickets, particularly higher price point scratch-offs” selling for $10, $20 or even $30 a ticket, Lottery press secretary Ewa Dworakowski told PennLive Thursday.

Because of their higher prize payouts, these higher-priced instant games have a lower profit margin than most of the Lottery’s traditional games. But because of their high price and growing player appeal, they can also generate more raw dollars of profit.

Dworakowski said that the upper price point scratch-offs are now among the lottery’s most profitable products in terms of dollars for the Lottery Fund.

It’s reached a point, Dworakowski said, where the current 25 percent rate of return limits the Lottery in offering the higher price point tickets that players want to buy.

The relief granted in Murt’s bill, then, “would allow us to continue to offer players what they want to buy" in terms of more higher-priced titles, "in turn growing sales and profits,” she said.

Because of lead times needed in design and development of new games, State Revenue Department projections are that the changes, if enacted, will only bring the state an additional $20 million in profits during the 2019-20 budget year.

But they could raise projected profits by an additional $450 million through the five-year course of the adjustment.

It’s not that the Lottery has been struggling to find players in recent years.

Game sales hit a record $4.2 billion in fiscal 2017-18, generating almost $1.1 billion for the state. Sales and profit figures are expected to rise again in the current fiscal year, fueled in part by the addition of Keno in bars and restaurants and a battery of new Internet-based games playable on laptops and smart phones.

But with Pennsylvania experiencing explosive growth in its senior citizen demographic, more growth is the order of the day.

According to the Wolf Administration’s 2019-20 budget package, the Lottery Fund, which also gets a small infusion of cash from the state’s gaming proceeds, is expected to be on the hook for more than $1.2 billion in senior program costs.

And, a 2017 report by the state’s Independent Fiscal Office projected that the 65-and-older population in Pennsylvania is expected to grow by 31.1 percent between 2015 and 2025, from 2,180,000 to 2,857,000.

“With the ‘Senior Tsunami’ quickly approaching, we are expecting a surge in the next 10 years of seniors desparately needing assistance and help,” Murt said Thursday. “With that demand, we need to do everything we can to ensure that our Lottery Fund remains solvent.”

Lottery profits fund most of Pennsylvania’s services for older adults, including prescription drug subsidies, in-home services, rent and property tax rebates and more.