Pa. lottery: On pace for record, officials work to keep games updated

On pace to collect a record number of sales for the second consecutive year, Pennsylvania Lottery officials are pondering if the games can keep topping themselves.

“We have been growing for decades, some years more than others,” said Lottery Executive Director Drew Svitko. “When the recession hit our sales and profits leveled for a couple of years — discretionary spending was down as you might have expected. And then we bounced back, and we’ve been growing.”

The state collected $4.2 billion in the 2017-18 fiscal year, breaking the previous record of $4.13 billion set in 2015-16.

“Generally, the gaming industry has not affected our bottom line revenue,” Svitko said. “We have determined that having land-based casinos in Pennsylvania didn’t have much of an effect on our sales. Nor do we have an affect on theirs. One is a destination business. And people who are playing the lottery, by and large, we see as an impulse item sold at retail. Someone might go out to buy milk, bread and eggs and walk past one of our machines … and buy a ticket.”

The launch of iLottery is a look into the future. “It is a different way to play, intended for a different audience,” Svitko said. “It’s an attempt for us to be convenient for a new generation of lottery players, and relevant at delivering a different kind of entertainment experience. You can access this through our website, our mobile app.”

The government agency operates more like a $4 billion consumer packaged goods company, Svitko said.

“We are selling a product at retail and because of that we have to advertise and we have to manage a portfolio of products,” he said. “So we make sure we have a portfolio that has something for everyone.

“If we see a gap in our portfolio or if a game is lagging or it has been out for many years and we are seeing a long-term downward trend, we figure out what is wrong with that game. If there is a gap in our product mix, we do some research with players, and what they would like and what is missing and what would motivate them to play. Then we start statistically modeling games and game performance.”

What generates the big sales are large jackpots, such as the current Mega Millions and Powerball runs.

Tonight’s Powerball jackpot is worth an estimated $348 million. A winning number was selected for Friday night’s $267 million Mega Millions jackpot.

“Generally high jackpots do generate more sales,” Svitko said. “They generate more excitement, and the more news they get and the more watercooler chatter there is about them in offices or workplaces around the Commonwealth or at retail, the more tickets we are going to sell. That’s not unique to Pennsylvania, it is the same around the nation.”

The only lottery revenue that doesn’t stay in the state is if the jackpot is won in another state. So, when that jackpot was won in South Carolina, Pennsylvania contributed to that jackpot prize money.

Pennsylvania sent the portion of the prize fund that is allocated to paying the top prize, we send that percentage to a clearing house and they paid the state.

“That would be all that leaves Pennsylvania,” Svitko said. “Otherwise the profit all stays here.”