Iowa Lottery's profits drop after record-breaking year
William PetroskiThe Iowa Lottery's luck fell short over the past 12 months with profits for state government declining by $7 million compared to its record-breaking previous fiscal year.
Preliminary financial results released Thursday show the Iowa Lottery generated nearly $81 million in state proceeds for fiscal year 2017, which ended June 30.
It was only the fourth time the state's profits exceeded $80 million in the lottery's 32-year history, but it couldn't match the $88 million in proceeds raked in during fiscal year 2016. The big difference was that last year's sales were bolstered by a mega-jackpot of nearly $1.6 billion for the multi-state Powerball game.
“The ‘chance factor’ was highlighted this year in terms of the jackpots in our lotto games,” said Iowa Lottery Chief Executive Officer Terry Rich. “There simply won’t be a world-record jackpot every year. But the lottery is in a healthy position overall and we continue to deliver more than we had forecast for state causes. We understand that lottery results can and do fluctuate over time, which is why we budget conservatively.”
Annual lottery sales for the past 12 months totaled $352.2 million, exceeding the $300 million mark for the sixth year in a row, but representing a drop of 4 percent from a year earlier. Prizes paid to players were down nearly 3 percent.
Scratch games had record results for a third straight year, with sales totaling $237.6 million, an increase of nearly $4 million from a year earlier. Scratch tickets were the first product introduced by the lottery in Iowa and have always been one of its top-selling items.
“Game design, the top prize available, the color of the ticket, the artwork on the ticket, the jackpot on the line and the particular time of year involved all can have an impact on lottery sales,” Rich said. “We do our best to be cognizant of those factors and keep a good mix of games in the field to appeal to different customers.”
Iowa Lottery officials pledged in June to tighten security over lottery tickets and to strengthen efforts to obtain restitution from persons convicted of lottery-related crimes.
The officials detailed their plans at a meeting of the Iowa Lottery Board in Clive, where they responded to a Des Moines Register investigation that detailed security problems that persist in the state-run lottery because of a failure to fix weaknesses spotted years earlier.
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The Register investigation detailed cases of Iowa retail employees stealing lottery tickets and cashing in thousands of dollars in illegitimate prize money, as well as situations in which lottery officials failed to reclaim jackpots of as much as $30,000 that were claimed fraudulently. The Iowa Lottery is a member of the Multi-State Lottery Association, whose former information director Eddie Tipton has pleaded guilty in Wisconsin to rigging a lottery game there. He has also pleaded guilty in Iowa to a felony charge of ongoing criminal conduct.
Connor Flynn Jr. of Des Moines, an advertising executive who chairs the Iowa Lottery Board, said in a statement Thursday that he looks to the lottery to stress integrity, responsible play and strong communications every year. He noted that the Iowa Lottery received a clean report from State Auditor Mary Mosiman during her office's annual review of the lottery's operations.
Iowa Lottery proceeds have three main purposes. These include providing money for general state government operations, support for the Vision Iowa program, and support for veterans and their families through the Iowa Veterans' Trust Fund.
Here is a year-to-year comparison of annual lottery sales by product:
Product: FY 2017 Sales; FY 2016 Sales
Scratch games: $237.6 million; $233.7 million
InstaPlay games: $5.8 million; N/A
Pick 3: $7.3 million; $7.4 million
Powerball: $54.3 million; $74.9 million
Mega Millions: $15 million; $16.4 million
Hot Lotto: $8.2 million; $8.8 million
Pick 4: $3.9 million; $3.6 million
All or Nothing: $3.2 million; $4 million
Lucky for Life: $5.6 million; $3.2 million
Pull-tab games: $11.3 million; $15.1 million
*The InstaPlay product debuted in Iowa in November 2016.
The Top 10 retailers in Iowa for lottery sales in FY 2017 were in six different communities:
Hy-Vee: 20 Wilson Ave. SW, Cedar Rapids, $810,681
Hy-Vee: 2540 E. Euclid Ave., Des Moines, $771,497
Hy-Vee: 1843 Johnson Ave., NW Cedar Rapids ,$749,968
Hy-Vee: 2323 W. Broadway Ave., Council Bluffs, $670,668
Hy-Vee Drugstore: 1520 Sixth St. S.W., Cedar Rapids, $632,664
Hawkeye Convenience Store: 2330 Wiley Blvd. S.W., Cedar Rapids, $613,913
Hy-Vee: 3235 Oakland Road N.E., Cedar Rapids, $610,751
Hy-Vee: 4000 University Ave., Waterloo, $595,398
Pronto: 810 Fourth Ave. South, Denison, $585,137
Hy-Vee: 2400 Fourth St. S.W., Mason City, $567,740
Four players claimed Iowa Lottery prizes of at least $1 million during the fiscal year.
Jeff Wolf, Iowa City, Powerball, $2 million, April 27, 2017
Karl Krumbholz, Cedar Rapids, Powerball, $2 million, March 17, 2017
Jeff Tomlinson Jr, Coralville, Powerball, $1 million, Oct. 7, 2016
Rick Breuss Jr., West Des Moines, Mega Millions, $1 million, July 18, 2016