Aussies’ lotto dreams resilient to cost of living crisis

The Lottery Corporation says a planned price hike for its popular Saturday Lotto is unlikely to dampen cash-strapped Australians’ willingness to take part in the weekly draw.

Australians are still buying up big on lottery tickets

The Lottery Corporation says a planned price hike for its popular Saturday Lotto is unlikely to dampen cash-strapped Australians’ willingness to take part in the weekly draw.

The operator of the Lotto, Powerball and Keno games reported a 13.8 per cent increase in annual revenue to $4bn as more Australians signed up as customers despite the cost-of-living crisis. Net profit surged 21.3 per cent to $411.8 as customers rose to a record 4.75 million.

Chief executive Sue van der Merwe said lotteries continued to be popular among Australians of all ages, with a record $200m Powerball jackpot last year attracting long queues at stores.

“A draw of this size gets Australia talking, captivates customers and sees queues forming in retail stores,” said Ms van der Merwe. “At its peak, we sold more than 9,000 tickets a minute, with searches for Powerball dominating Google and social media search terms as that draw made headlines across the country. The draw introduced 170,000 new active registered players and 40 per cent of them have made a subsequent purchase. These new players skew younger and are more likely to use digital channels.”

She said the amount of the price increase for Saturday Lotto, which was likely to occur at the end of the financial year, has not been determined.

The Lottery Corp CEO Sue van der Merwe says price increase planned for Saturday Lotto.

“The lotteries model involves a very broad participation by customers spending a relatively small amount of money to win a dream,” Ms van der Merwe said.

“The resilience of the business has really proven out multiple times now in history and it’s proving once again. We did see some softening in frequency and spend particularly in our base games but overall there was a half a million uplift in customer numbers. So more people are playing, still spending that smaller amount of money.”

She said the company continued to focus on game innovation with a refresh of its Monday and Wednesday lotto games and the addition of the Friday draw.

While two division one winners took home $100 million each, overall there were 6.7 million winning entries across all divisions. Ms van de Merwe said the company welcomed the Federal Government’s current review into online kino and foreign match lotteries.

The review will examine whether changes to regulations are required, such as payment blocking or other forms of enforcement.

“Lotteries have been a part of Australian life for more than 140 years,” she said. “It’s very much in the public interest for the industry to remain sustainable and highly regulated, especially as lotteries provide substantial revenues to state governments, support thousands of small businesses and are loved by millions of Australians.

People queue for the $200m jackpot draw.

The company delivered a 26.7 per cent increase in jackpot game turnover “showing the strength and resilience” of the business.

“It was certainly a year of big jackpots, including the $200m for Powerball and $90 million for Oz Lotto on Boxing Day captivating customer acquisition and reactivation,” she said. Investors Mutual senior portfolio manager and head of investment research Hugh Giddy said it was an excellent result, helped by record jackpots and the move to online ticket sales.

“Online sales now make up 41 per cent of revenue compared to 33 per cent three years ago,” Mr Giddy said. “This attracts a higher margin because it does not involve a commission being paid to newsagents.” He said the lotteries business was largely resilient to economic pressures given the relatively small amount spent by customers each week.

“It is not bullet proof but over the 20 year period from 2004, lotteries have increased by 4 per cent year, including the GFC and the Covid-19 pandemic,” said Mr Giddy. “Casinos are much more vulnerable in the current environment.”