Great year for Powerball jackpot winners eats into Lotto revenue, community funds

In the 2019 financial year Powerball first division was struck 18 times, the highest number of wins in a single year. Photo / Michael Bradley

The 2018-19 year was the luckiest on record for Powerball jackpot winners - but not so much for Lotto NZ's revenue which fell because of it.

Overall Lotto revenue was $1.18 billion, down 5.7 per cent on the previous year because the Powerball jackpot was hit more times than statistically expected, said Lotto NZ's annual report.

In an average year Powerball can be expected to be won 13 times - in the 2019 financial year Powerball first division was struck 18 times, the highest number of wins in a single year.

The big wins also meant a $14m dip in funds available for the 3000 community groups and organisations Lotto supports, including Sport NZ, Creative NZ and the New Zealand Film Commission.

Lotto profit available for distribution was $261m, compared with $275m the previous year.

The biggest prize during the year was $22.3m and it was won twice in a single year.

Overnight millionaires were created 42 times and 40 Kiwis shared $1m with Lotto first division, the largest number of players to win in a single draw since Lotto was introduced 32 years ago.

Lightning struck twice for one woman who won $11m with Powerball just five months after pocketing $333,333 with Lotto.

But the days of Lotto's jackpot-fuelled growth may be waning.

The annual report said Lotto would lessen its dependency on this type of growth by enhancing its daily and instant games "to deliver consistent results and safeguard the long-term sustainability of the business".

Sales for Lotto games totalled $950.6m, accounting for 81 per cent of total sales.

Sales from Instant Kiwi amounted to $173.9m over in-store and online products. Sales of daily games were $50.8m.

Sales through online channels, MyLotto and the Lotto NZ app, totalled $227.6m, up 13 per cent on the previous year. Online sales now account for 19 per cent of total sales.

For every dollar of combined Lotto games sales, 22c goes to community groups, while 55c is paid out in prizes. Taxes take 11c, retailer commission 6c and Lotto's operating costs 6c.

Retail sales were $947.7m against a target of $1.04b for the year.

The report said in order to continue to grow as a business, Lotto needed to provide players with a digital-first experience which enabled them to play seamlessly between channels.

It would offer new digital products and deliver engaging online content.

To do this it would undertake a "significant" upgrade of its digital platform.
Lotto declined to quantify this proposed capital expenditure because of commercial sensitivities.