Iowa Lottery sales decrease due to drops in national jackpots

The Iowa Lottery has experienced a nearly 12 percent decline in revenue over the past year, largely due to decreased participation in national jackpot games, as reported by Iowa state lottery data. However, despite this decrease, the Iowa Lottery continues to surpass its budget expectations for the ongoing fiscal year, according to Matt Strawn, the Chief Executive Officer of the Iowa Lottery.

Powerball sales in Iowa have suffered a significant drop of nearly 54 percent, decreasing by $29.6 million compared to the previous year. Similarly, Mega Millions sales in Iowa are down by 21 percent, while scratch ticket sales have seen a 4.3 percent decline amounting to $8.8 million. Strawn attributes these downward trends in sales to diminishing consumer confidence, which is reflected in national reports highlighting a challenging economic climate. Lottery ticket sales are considered part of discretionary spending for consumers, making them susceptible to fluctuations in consumer sentiment and broader economic factors.

Scratch ticket sales comprise almost two-thirds of all Iowa Lottery sales and are closely linked to consumer sentiment and external economic conditions. Parallel to this, Strawn draws attention to recent public earnings reports from major national retailers, some of which are lottery ticket vendors in Iowa, indicating lower store traffic during the beginning of the year.

Strawn points to national research conducted by Ipsos, which indicated a significant 14-percentage point decline in Americans’ comfort with their personal economic situations since the previous year. Additionally, he highlights another consumer sentiment report, showcasing a similar downward trend – ultimately leading to the lowest consumer sentiment levels in over two years across all demographic groups. Notably, this national consumer sentiment decline resonates within Iowa’s lottery sales numbers as well.

Strawn emphasizes that Powerball and Mega Millions sales are heavily influenced by the size of the grand prize jackpots, highlighting uncertainties for the final quarter of the state budget year that concludes on June 30. Last year, both games saw jackpots exceeding $1 billion in late March, significantly boosting sales. Consequently, this large jackpot factor poses a challenge when comparing sales figures year-over-year.

Despite these challenges, the Iowa Lottery is on track to slightly surpass its revenue targets for both sales and proceeds for the current fiscal year. The distribution of the Iowa Lottery’s proceeds allocates 71 percent towards player prizes and operational costs, 22 percent towards state programs, and 7 percent towards businesses selling lottery products. A substantial portion of the 22 percent going to state programs contributes to the state’s general fund, with additional benefits for the Iowa Veterans Trust Fund and survivor funds for the families of state public safety and corrections workers.

Through February, the Iowa Lottery has managed to exceed budget projections by 8 percent in sales and 19 percent in proceeds, while keeping operating expenses 9 percent below budget. The Iowa Lottery team’s commendable performance during these difficult times is a testament to their dedication and adaptability.