Hoosier Lottery Commission expects to sell $1.26 billion worth of tickets in the 2018 fiscal year.
The Hoosier Lottery is predicting that its private management company will sell enough tickets in the 2018 fiscal year to receive a performance incentive for the first time.
According to a financial report recently presented to the Hoosier Lottery Commission, IGT Indiana, formerly known as Gtech Indiana, expects to sell $1.26 billion worth of tickets in the 2018 fiscal year, which ends June 30. Convenience stores are significant sellers of lottery tickets in Indiana.
Those sales could result in a “provider net income” of $313 million—$13 million higher than the $300 million minimum threshold for IGT Indiana to avoid paying a penalty and enough to receive an incentive bonus for the first time since contracting with the state in 2012.
The 15-year contract outlines minimum net income amounts that IGT Indiana must hit in order to avoid paying a penalty and incentive net income amounts that would trigger an incentive payment. The company missed the minimum income targets in 2014 and 2015, prompting the state to revise the contract in 2015 and lower the income requirements.
IGT Indiana then avoided penalties in 2016 and 2017 by hitting the minimum net income requirements, but it did not hit the incentive income targets, so it did not receive a bonus.
For fiscal year 2018 the minimum income level and incentive income level are both $300 million. If the estimates hold, IGT Indiana will receive half—or $6.5 million—of the excess income, and the Hoosier Lottery will receive the other half
Next year, the minimum income target stays at $300 million, but the incentive mark increases to $305 million.
The higher-than-expected income this year also means more revenue returned to the state.
The lottery covers its operating expenses, but otherwise all the revenue is returned to the state, which uses the proceeds to reduce residents’ automobile excise taxes, support state pension funds and finance other projects.
HOOSIER RECORD
The Hoosier Lottery is estimating that $301.8 million will be returned to the state, which is nearly 5% higher than fiscal year 2017 and a record high amount.
As of April 30, total sales for scratch tickets, Powerball, Hoosier Lotto, Mega Millions and non-jackpot draw games were all higher this year than the same 10-month period in the previous year. The state saw revenue of $1.07 billion through April 30, up from $995 million in the same period the previous year.
IGT Indiana will present audited year-end figures to the Hoosier Lottery Commission at its meeting in August.
