Lottery Corp’s profit drops as consumers tighten belts

Lottery Corporation, which runs the OzLotto, Keno and Golden Casket brands, has reported lower revenue as Australians reduced spending amid tighter economic conditions.

Australian taking a bet but tightening their belts.

Budget-conscious Australians are cutting spending on their weekly lottery tickets even as they queue to take part in record jackpots of up to $200m.

The Lottery Corporation, which runs the OzLotto, Keno and Golden Casket brands, reported lower interim revenue as consumers tighten their belts amid higher interest rate and a household credit crunch.

Chief executive Sue van der Merwe said the first half showcased the resilience of the company’s operation in softer economic conditions.

First half revenue dropped 1.8 per cent to $1.88bn as spending on most games fell, while net profit including signficant items rose 25.7 per cent to $217.4 million..

Ms van der Merwe said that while customer participation in lotteries remained at healthy levels, there was a modest decrease in frequency and spending as customers looked for the “best value proposition.” More than 4m Australians are registered customers, with total customers approaching 10m.

“The business was resilient amid softer consumer conditions,” said Ms van der Merwe. “However, there was a modest decrease in frequency and spending, with turnover for most games down between two and four per cent in a like-for-like basis.

“The good thing about our business is that people can reduce their spending but at the same time take part in a game. They can go from an 18 games quick draw to 12 game draw.”

Ms van der Merwe said that the company had reaped the benefits of changes made to Oz Lotto in 2022 to increase the probability of bigger jackpots.

The $90m draw on Boxing Day was the biggest Oz Lotto jackpot in more than a decade, followed by the $200m Powerball jackpot on February 1.

Lottery Corporation boss Sue van der Merwe

“The number of entries sold is the equivalent of more than one in two Australian adults buying a ticket, and that speaks volumes to the appeal of the powerful brand,” she said. “It’s hard to think of anyone else in the Australian mass market that can generate events like these, with queues out of the doors of retail outlets and wall-to-wall media coverage.”

The company, which split from Tabcorp in May 2022, announced a fully-franked interim ordinary dividend of 8.0 cents per share.

The shares rose 2.97 per cent to $5.20.

The group’s Keno business posted turnover growth in Queensland and NSW, supported by increased customer numbers in hotels,

The company’s retail partners, including newsagents and convenience stores, were benefiting from a higher commission rate, which was also driving higher margins on digital sales.

“We have further initiatives in the pipeline to enhance the customer experience and drive growth,” Ms van der Merwe said. These include the newly evolved Weekday Windfall game and a digitally enhanced retail membership program.”

“This is a business with a bright future,” she said. “We have hit the ground running in the second half with a record $200 million Powerball jackpot following $100 million and $150 million draws. These draws captivated Australians, driving strong customer acquisition and reactivation, and engaging customers in both our retail and digital channels.”

The biggest lottery in Australian history was held earlier this month.

Originally published as Lottery Corp’s profit drops as consumers tighten belts