Giant jackpots lift Lotto revenue to record level

More than 2.7 million people won on Lotto. Photo / Christine Cornege

Super-sized Lotto jackpots - including a $28 million Powerball prize claimed by a Papakura pig hunter last year - have fed New Zealanders' gambling appetites and boosted NZ Lotteries' revenue to record levels.

The taxpayer-owned firm has reported an 18.4 per cent lift in total sales to $925.9 million in year to June, with profit rising 15 per cent to $183.3 million.

NZ Lotteries chief executive Todd McLeay said the massive jackpots were the "cream on top" of a solid underlying performance by the company.

Lotto outlets around the country saw queues out the door during the $28 million Powerball jackpot in October last year, claimed by the South Auckland pig hunter, and another $35 million jackpot in April, shared between two North Island winners.

But McLeay said NZ Lotteries' results for its current financial year, which will end in June 2012, were unlikely to be as good as the last.

"It's unlikely ... we'll experience two big jackpot runs to the extent that we did in the last financial year."

McLeay said NZ Lotteries would prefer to operate its business in a buoyant economic environment, but tough times could also benefit sales.

Its products were a form of escapism, he said. "There's been quite a lot of stuff on the radar that's made you question things over the last year or so and our products really allow people to dream of positive things, whether they win or not."

McLeay said NZ Lotteries was working to ensure its products appealed to as many consumers as possible through innovation and effective marketing.

During the last financial year Instant Kiwi had gone through a total revamp, he said, including new ticket designs, advertising and prizes, as well as simplified playing processes.

"[The revamp] has resulted in around a 29 per cent increase, year-on-year, in Instant Kiwi sales."

Mcleay said that instead of adding last October's 2.5 percentage point GST increase on to all Lotto products, the company opted to roll the whole increase into Powerball.

The starting prize for Powerball was then increased from $3 million to $4 million and a new advertising campaign launched.

NZ Lotteries' annual report said total expenses of $59.4 million in the year to June included $28 million spent on promotion and retail support and $10.6 million on employee remuneration. McLeay was paid between $470,000 and $479,999, the report said.

More than 2.7 million people won $176.1 million in Lotto and Lotto promotion prizes during the year, with 115 people winning first division.

McLeay said the $183.3 million profit had been distributed to the NZ Lottery Grants Board and distributed to more than 3000 organisations and projects around the country.

Apart from a special Christchurch earthquake appeal draw, held on March and well supported, the city's disasters had little impact on NZ Lotteries' sales, he said.