Hoosier Lottery operator facing $3.6M fine for not meeting sales goal

By Kate Northrop

INDIANAPOLIS, Ind. — IGT Indiana, the private operator of the Hoosier Lottery, may be required to pay a $3.6 million fine to the state should it not meet its $300 million sales goal — a number that seems unobtainable at this point.

The lottery is projected to generate about $295 million to be sent to state coffers, which would include the $3.6 million penalty should they not meet the threshold.

Last year, the lottery sent a record $312 million to the state in surplus revenue, 6% higher than what is expected this year.

Under the lottery privatization contract revised in 2015, the state lottery’s contributions work to reduce state excise taxes and help pay for pension obligations for public employees. Last year when $312 million was transferred to the state, IGT Indiana received a bonus performance payment of $11.2 million.

This year, if IGT Indiana somehow manages to exceed expectations and boosts net income above $310 million by June 30, it will split the surplus with the state.

It’s not a surprise that the Hoosier Lottery is one of the many state lotteries that have taken a sales hit due to COVID-19. 224 lottery retailers were closed for varying durations during the past few months.

Carrie Stroud, chief of staff for the lottery commission, cited the lackluster jackpots in major games like Powerball and Mega Millions as a reason for the dip in addition to the coronavirus pandemic. “No Powerball or Mega Millions jackpots this year have hit $400 million yet,” she said. “They’ve just kind of rolled and gotten hit at lower amounts.” More casual players will tend to jump in and buy tickets when multi-state draw game jackpots near a half-billion dollars.

Taking into account a six-week stay-at-home order in Indiana, a more holistic perspective of the sales dip makes it seem surprisingly modest.

Sales for non-jackpot draw games like Daily 3 or Cash 5 are up $3.9 million, or 3.4%, compared to last year. Scratch-off sales have proven to be a beacon for many lotteries, with revenue in Indiana up $35.5 million, or 4.4%, since last year.

“It’s surprising we have continued to do as well as we have,” lottery commission member David Redden said. “Even though it’s a shortfall it could be a lot worse.”

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