By Arizona Lottery Executive Director, Gregg Edgar
Altadena, California became the center of the lottery universe on November 8, after a single ticket purchased at Joe’s Mobile Service won the world record Powerball Jackpot of $2.04 billion.
The win is unprecedented in its scope and will be life-changing for whoever comes forward to claim the ticket. Professional athletes don’t even sign windfalls of the magnitude of billions of dollars. To put this win in perspective, this jackpot eclipses the combined total career earnings of Cristiano Ronaldo, LeBron James and Tom Brady by over $100 million.
The full story, however, is much more significant than a single winning ticket. The record-setting Powerball win gives scope to the importance of the lottery to public revenue. State lotteries return over $28 billion every year, $1.07 billion from the three-month Powerball run alone. It begs the question: When will all state lotteries be able to sell tickets online in a rapidly changing market?
Since the Professional and Amateur Sports Protection Act (PASPA) was overturned in 2018, public discourse on gaming has almost singularly been focused on the expansion of sports betting, with 30 states adding some form of the sports gaming enterprise in the past four years.
Sports betting nationally reached $163 billion in total handle in the past year, with most of the wagers placed online. Yet its margins are small, and it delivers little money to the state licensing programs. Annually, these operations return roughly $2 billion to the states. In comparison, state lotteries return over $28 billion every year, $1.07 billion from the three month Powerball run alone.
Yet, only eleven state lotteries are able to offer any of their products on the internet. The PASPA decision opened the door to the conversation, but it is time to expand the dialogue to the lottery space. Lottery is sold through forty-eight state-run lottery jurisdictions whose profits are returned to public coffers and important state programs focused on everything from education to veterans to foster kids. For many of these jurisdictions, Powerball is the single largest funding source to serve those much needed programs.
It is a product that is played by a diverse audience that resembles the fabric of life in America. At a $2 price point, it is an inexpensive form of escapism that provides real dollars for the communities where it is sold. And in an era where we have seen over 25% inflation since 2015, the price of a Powerball ticket has remained the same at $2. Even at the peak of the record-setting run, the average ticket purchase was less than $10.
The $2.04 billion prize was the culmination of a jackpot run that started on August 4. In three months, Powerball created fifty-nine million winning tickets worth over $2.66 billion. It further generated more than $190 million in retail commissions for brick-and-mortar locations ranging from large, national corporations to small mom-and-pop gas stations, like Joe’s Mobile Service in Altadena.
More importantly, the return to worthy causes has a lasting impact.
For example, from just this run, Georgia will deliver almost $34 million to fund Hope Scholarships to Georgia Universities. In Oklahoma, more than $9 million will go to support K-12 school districts and higher education programs. In Colorado, $20 million will fund the conservation of parks, trails, open spaces, and recreation projects.
For Arizona, more than $24.7 million dollars will be used to conserve Arizona’s unique landscape and wildlife, protect Arizona’s foster children, fight homelessness and combat childhood health and safety concerns. Just last year, the Arizona Lottery gave back nearly $270 million to 17 state-mandated programs that would otherwise depend on tax dollars for funding.
Lottery exists for the benefit of the communities it serves. That is the mission. Opening the opportunity for players to be able to purchase lottery products online, provides greater responsible gaming tools while delivering a product that people want to play, how they want to play it. Bringing the nation’s lotteries online not only aligns with keeping lottery relevant in today’s digital entertainment landscape, but also comports with the direction that state legislatures have treated other forms of online gaming like sports betting. It is a public policy position that legislators should consider in the coming legislative sessions.