Iowa Lottery sales down, driven by dips in national jackpots

DES MOINES — Iowa Lottery revenues are down nearly 12 percent over the past year, a dip driven largely by national jackpot games, according to state lottery figures.

Still, the Iowa Lottery remains ahead of its budget projections in the current state budget year, Iowa Lottery Chief Executive Officer Matt Strawn said last week at a meeting of the Iowa Lottery Commission.

As of the end of February, Powerball sales in Iowa are down nearly 54 percent over the previous year, a dip of $29.6 million. Scratch ticket sales are down 4.3 percent, a dip of $8.8 million. Mega Millions sales in Iowa are down 21 percent.

Strawn, at the commission’s meeting Tuesday at the Iowa Lottery’s offices in Clive, said the lags in Powerball and Mega Millions sales likely can be attributed to lowering levels of consumer confidence in recent months. Strawn cited multiple national reports that portray “a challenging environment,” and noted lottery ticket sales are a part of consumers’ discretionary spending.

“Scratch ticket sales performance is more closely tied to consumer sentiment and broader external economic conditions. … And as a reminder, scratch tickets roughly account for nearly two-thirds of all Iowa Lottery sales,” Strawn told the commission.

Strawn said the sluggish national lottery sales are consistent with public earnings reports from leading national retailers, including some who sell lottery tickets in Iowa, who say store traffic is down to start the calendar year.

“This also tracks with national research from Ipsos earlier this month that found the number of Americans who say they are comfortable with their personal economic situation has dropped 14 percentage points since late last year,” Strawn told the commission.

“While another leading national consumer sentiment research report, one that is relied upon by many leading economists and business analysts, showed that consumer sentiment across all demographic groups has slumped to its lowest level in over two years.” he said. “We are not immune to those trends here in Iowa.”

Strawn said Powerball and Mega Millions sales also are driven by the size of grand prize jackpots, creating an unknown for the final quarter of the state budget year, which ends June 30. Strawn noted in late March last year, both games had $1 billion-plus jackpots, which drove up sales for both.

“That is what we are up against when comparing this year’s sales to last year’s,” he said.

Despite those headwinds, the Iowa Lottery is projected to “slightly exceed” its projected revenue targets, both sales and proceeds, for the current state budget year, Strawn said.

Of the Iowa Lottery's proceeds, 71 percent go to player prizes and operational costs, 22 percent go to state programs and 7 percent go to businesses that sell lottery products, according to the lottery. A majority of that 22 percent goes to the state's general fund, but Iowa Lottery proceeds also benefit the Iowa Veterans Trust Fund — in the form of a $2.5 million annual deposit — and survivor funds for the families of state public safety and corrections workers.

Through February, the Iowa Lottery is ahead of budget projects by 8 percent in sales and 19 percent in proceeds, and operating expenses are 9 percent below budget.

“The (Iowa) Lottery team should be commended for the performance of this product category in a challenging environment,” Strawn said.

Smaller games are faring better than the big jackpot games. Pull-tab games are up 21 percent, Lotto America are up 20 percent, and InstaPlay sales are up 14 percent.

Comments: (515) 355-1300, erin.murphy@thegazette.com

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