Pennsylvania Lottery Says State Must End Profit Mandate to Appease Changing Consumer Demand
The Pennsylvania Lottery is required by law to make a minimum profit of 20% on its traditional game sales, or all games aside from its iLottery. The profit mandate runs through June 30, 2029, but lottery officials and Gov. Josh Shapiro (D) are pleading with state lawmakers in Harrisburg to terminate the yield statute.
Pennsylvania is home to one of the country’s richest lotteries, with almost $4.8 billion in traditional sales during the state’s 2023-24 fiscal year. The calendar year marked the 13th consecutive year in which the Pennsylvania Lottery recorded profits exceeding $1 billion, with 2023-24’s tally coming in at more than $1.22 billion. The Pennsylvania Lottery primarily benefits older Pennsylvanians.
Lottery officials say they could deliver the state even more money should it end the 20% profit rule on scratchers. Over the past decade, the lottery has seen a sales shift from nightly draws to instant games and higher-priced scratch-offs.
The $30 and $50 scratch-offs, however, typically demand a much higher payout percentage and, therefore, come with a potentially lower profit margin for the lottery. Changing consumer behaviors, including lottery players favoring longer odds on the dream of hitting a $5 million jackpot on a $50 scratcher, has rendered the 20% profit protocol obsolete, lottery reps argue.
Shapiro Turns to Gaming for Budget Funding
During his 2025-26 Budget Address to the General Assembly last month, Shapiro doubled down on his belief that skill games, controversial slot-like gaming terminals, should be regulated and taxed. The Pennsylvania Lottery and the state’s vast, legal gaming industry heavily oppose skill games on the belief that the gray games poach play from their operations.
Shapiro wants more legal gaming by way of skill games to help fund his plan to direct an additional $500 million to the poorest schools in the commonwealth and allocate $290 million more to public transit initiatives. He agrees that the lottery could generate more revenue should the 20% profit mandate be lifted.
https://www.casino.org/news/pennsylvania-lottery-says-state-must-lift-profit-mandate/