Year of pandemic proves big winner for Iowa Lottery sales

CLIVE — Iowa's lottery proved to be the ticket for homebound adults starving for entertainment options during the throes of the COVID-19 pandemic.

Lottery officials said Tuesday they are on track to smash all of their annual records, having already surpassed $417 million in sales of instant scratch and lotto products with a month still left in the current fiscal year.

"It’s all wonderful news. I don’t know how it could be any better," said Mary Junge, a member of the Iowa Lottery Board from Cedar Rapids after being presented at the authority's monthly board meeting with a litany of fiscal 2021 records for sales, prizes, proceeds to the state general fund and commissions paid to lottery retailers.

Through May, lottery sales stood at nearly $417.2 million, compared with $335.1 million for the same 11-month period one year ago — nearly a 25 percent year-over-year increase. The lottery's previous best sales year was in fiscal 2019 when the operation's nearly 2,400 retail outlets sold $390.8 million for the full 12 months.

"Fiscal 2021 will be a record year for the lottery in many respects," said Iowa Lottery Chief Executive Officer Matt Strawn.

Along with topping $400 million in yearly sales in the lottery's 36-year history, Strawn said proceeds after expenses to the state's general fund will top the $100 million mark for the first time ever, and players reaped a record $265.86 million in prizes from nine product lines — compared with a $241.9 million all-time high prize total two years ago. Also, sales for instant-scratch tickets are on track to top $300 million for the first time ever — accounting for 69.7 percent of the total for fiscal 2021, which ends Wednesday.

In an interview, Strawn said a number of "unique experiences" drove lottery sales to "reach new heights" as Iowans who were forced to spend more leisure and work time at home turned to a safe, local entertainment option.

"We’re a discretionary income entertainment product at a time when there were no games, there were no concerts, there’s no vacation. People were looking for a safe entertainment option and they turned to the lottery," he said.

Strawn said fiscal 2021 saw steady sales increases. "There really wasn't wild swings," he said. But lottery financial and marketing presentations indicated March and April were big months, which coincided with casino operations also noting gambling spikes as Iowans received government relief checks intended to help Americans weather the pandemic and stimulate the economy.

While lottery products like the "pick 3" and "pick 4" games also saw record sales, Strawn expressed concern that national lotto jackpot products like Powerball and Mega Millions — while significantly higher than last year's "historical low performance" — continued to "underperform" past multiyear averages, though Powerball is nearly 30 percent ahead of last year.

The national game performances caused lottery officials in member states to make some strategic changes, with Powerball going from a twice weekly game to three drawings on Monday, Wednesday and Saturday beginning in August, which Strawn said "should lead to a rapid jackpot growth and incremental sales for individual lotteries." He said the change was driven in part due to consumer preferences "that they want something and they want it now" rather than waiting days to find out if they've won.

Also, Strawn said the Lucky for Life game will become a daily drawing rather than twice per week drawing effective July 19.

Lottery officials look forward to "build on what has been a remarkably successful year," Strawn said, but conceded that "as consumer behavior continues to normalize, Iowa lottery sales in the coming years and into the future will return to a more modest growth.“ That means fiscal 2021 will be a hard act to follow, with profits to the state up 30 percent at $95.3 million through May with June sales yet to be tabulated.

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