A former Lotto retailer fears the shift to the online MyLotto system is driving retailers out of business and taking the emotion out of the state-owned gambling operation.

But Lotto says the online platform is about making purchasing tickets easier and more convenient for players.

Central Otago Lotto player last night bagged $22.3 million, the biggest Powerball prize in the South Island's history, and the largest Powerball prize ever won on MyLotto.

Over 20 years selling Lotto tickets, the former owner and operator of a Whangārei store says she has seen a steady decline in store sales since Lotto introduced the online MyLotto system in 2008.

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She was consistently in the country's top 10 Lotto retailers, and sold 10 major winning tickets, with the top a $2m first division winner.

"I gave millions away to Lotto winners, and hundreds of thousands in scratchies.

"When MyLotto came in there was a very negative reaction from retailers, we knew we would not be able to compete. It would be like the enemy we couldn't see."

With increasing numbers of Kiwis using smartphones, tablets and computers, retailers simply could not compete, she said.

"The competition is huge. Each one of those is like a Lotto store.

"I would try and give customers a reason not to just do it online. I was as nice as I could be, I had some extremely loyal customers."

But it was to no avail.

"Regulars would come in to buy a magazine and tell me, 'I don't need a Lotto ticket, I've already bought mine online'. It was upsetting."

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While some new retailers were making do with the existence of MyLotto, she had seen the before and the after impacts.

"I have definitely noticed a decline in sales. A lot of older customers still come in, but the younger ones all do it online."

MyLotto now made up about 17 per cent of total Lotto sales.

While the financial losses were not the kicker that made her sell her store last year, each win online - including last night's - was another blow.

She understood Lotto was "keeping with the times", but she felt they were losing something bigger.

"I love Lotto, and we have to accept online shopping is with us, but playing online becomes emotionless. Lotto wants to give people that winning feeling. "

A Lotto spokeswoman told the Herald MyLotto made up 17 per cent of total sales in the year to date, up from 12 per cent in 2016.

Lotto NZ existed to give Kiwis the chance to play and win while generating essential funding for Kiwi communities, she said.

"Lotto NZ wants to make it as easy as possible for players to pick up a ticket where and when it's convenient to them. While many players enjoy their ticket-buying routine from their regular Lotto stores, MyLotto makes it a little bit easier for those customers who like to play, but who don't want to go out of their way to buy a ticket."

With more than 1400 Lotto stores around the country, retailers remained an integral part of Lotto NZ's business, the spokeswoman said.

Lotto NZ continues to invest in our retail environment and is working hard to further connect our in-store and online environments. In June, Lotto NZ introduced The App Reader into all Lotto stores, making it easy for customers to play their online Favourites in-store and enhance the in-store experience."

The Whangarei retailed said that over her 20 years in the business she had many special stories to tell.

"One time a man won second division and he said to me, 'Now I can buy my mum a headstone'."

Some of the best were smaller wins, including a time two brothers won $600.

"They were outside hopping and hollering, and they said their mum was turning 80 over in Australia, but they only had enough money for one of them to go. They even pulled straws. With the $600 they could both go."

Another time a couple won $75,000 just before Christmas, allowing them to take a family holiday to Australia.

The Lotto wins did not always have the most positive outcomes.

"The couple who won $2m, they split up.

"Another lady won second division, it was quite big, and she said to me, 'This has given me what I needed to leave my husband'. I didn't know how to feel about that one.

"But either way, there have been so many amazing stories, and you just don't get that personal connection with MyLotto."

She was optimistic it would turn around at some point.

"I think it will go back to stores in the end. People will want that experience, that human connection."