Lottery interest boosts retailers’ bottom lines

IOWA CITY - Iowa Lottery retailers got their own little jackpots out of last week's $656 million Mega Millions drawing.

The state's lottery retailers usually get a 5.5 percent commission for each ticket sold, but the Iowa Lottery bumped that up to 6 percent because of the size of last week's prize.

“It's definitely a positive for us. Everyone's to-do list says, ‘Let's go get a lottery ticket,'” said Chris Major, who does inventory control for Deli Mart, a chain of six convenience stores in Iowa City and Coralville.

The Iowa Lottery sold nearly $9.7 million in Mega Millions tickets from Jan. 24 - the last time someone won the jackpot - through Friday. That includes nearly $3.2 million in tickets sold on Friday alone. During that day's busiest stretch, tickets were selling at a rate of about 6,000 per minute in Iowa, the lottery reported.

Beyond the commissions, lottery retailers also racked up peripheral sales like beer, soft drinks or gas when people popped in to buy Mega Millions tickets, Major said.

“Everyone is dreaming about winning millions,” he said. “When they are thinking about millions, they are more apt to spend money on something they don't need.”

Iowa's share of the tickets sold inside state lines is about 35 percent, or $3.4 million. The money goes to the state's general fund, which pays for public safety, education, health and human services and other programs.

So where does the remaining 65 percent, or $6.3 million, of the Mega Millions sales go?

Half of total ticket sales, about $4.85 million, is funneled back into prizes, according to Iowa Lottery spokeswoman Mary Neubauer.

Then there's the 6 percent, or $582,000, in commissions that go to about 2,350 Iowa Lottery retailers.

About 7 percent, or $679,000, goes to lottery operations. The final 2 percent, or $194,000, is paid to the company that provides lottery terminals and communication system in Iowa.

Friday's record jackpot was split three ways, with winning tickets purchased in Illinois, Kansas and Maryland. More than 108,000 tickets bought in Iowa won smaller prizes ranging from $2 to $10,000.

Iowa's two $10,000 winners matched four of the first five numbers drawn and the Mega Ball, the lottery reported. They were purchased in the southwest Iowa communities of Shelby and Council Bluffs.

Strong sales in Iowa and across the nation pushed Friday's jackpot higher as the week went on until the estimated jackpot topped out at a $656 million annuity, or a lump-sum cash prize of more than $462 million - the largest jackpot ever in any lotto game.

Odds of winning the Mega Millions jackpot were about 1 in 175.7 million, lottery officials said, because there are about 175.7 million ways to combine the numbers in the game to make a play. By tracking sales, lottery officials can estimate how many of the possible combinations were purchased for a particular drawing - and data indicates that about 99 percent of all the possible combinations were purchased in Friday's drawing.