The COVID-19 pandemic created a disaster for many traditional gaming outlets, but a new online lottery platform provided a lifeline for Virginia Lottery sales.
In fact, the commonwealth’s official lottery has reconfigured its sales projections for the next few years. It’s largely due to the impact that online lottery sales have had in Virginia.
Earlier this week, Virginia Lottery Executive Director Kevin Hall addressed the Virginia House of Delegates Appropriations Committee with an update.
In fact, while speaking to legislators, Hall had to toot his own agency’s horn. As it turns out, the Virginia Lottery’s quick pivot to online sales, including an accelerated launch schedule during a global pandemic, has earned it some praise across the industry.
“I am pleased to tell you the lottery industry has signaled out Virginia for having such a strong and successful launch,” Hall said.
Online lottery boosts Virginia Lottery sales
The Virginia online lottery options include new instant-win digital games, as well as popular multi-state jackpots such as Mega Millions, Powerball, and Cash4Life.
Virginia Gov. Ralph Northam signed online lotto legislation in March. However, after realizing the reality of how COVID-19 would impact day-to-day life, including retail operations, the Virginia Lottery sprung into action. As a result, the lotto launched its online sales on July 1 – “several months” before the initial schedule, according to Hall.
The hard work, even while most staffers worked from home during the pandemic, has paid off.
“We focused like a laser beam on bringing iLottery sales to market as soon as possible,” Hall said. ” … The accelerated launch is now providing several months of unanticipated new revenue for (fiscal year) 2021.”
In fact, after just four weeks of sales, the VA Lottery had hit its initial sales projections for the entire first quarter. Additionally, after just one full quarter of sales (July-September), Hall said the lotto had reached its projects for the entire year.
Online is helping, not hurting lottery retail sales
The VA Lottery recently concluded its most recent fiscal year on June 30. During the 12-month period that included half of 2020, the lotto tallied more than $2 billion in total sales and more than $595 million in revenue.
With the online launch, some officials worried about the possibility of online sales cannibalizing its retail sales. After all, the Virginia Lottery is available in 5,300 gas stations, convenience stores, grocery stores, truck stops, marinas, and other VA retail outlets.
First, even before the iLotto launched, those shops had to prepare for a post-virus world.
“By late April, most retailers had reconfigured their stores,” Hall said. “They had put up signage, placed sanitizer out, had mask requirements, plexiglass shields at the counter to protect both customers and staff. It appears consumers adapted relatively quickly to the public health guidance. Customers became more comfortable navigating spaces and safety restrictions they found at retail.”
Secondly, lottery officials had to see if the online sales would cut into its retail business. Perhaps surprisingly, it had the opposite effect.
As Hall said:
“iLottery strengthens the overall lottery brand and it strengthens the traditional side of the business, as well. It makes the product more relevant for consumers, especially those who place a premium on convenience. And we’re now working on a variety of cross-promotions and other initiatives that will further tie together both traditional retail and the new digital side of our business.”
The future of the Virginia online lottery
For example, even after launching the online offerings, Virginia Lottery retail sales increased 8% compared to the previous year for scratch-off tickets. Sales also increased 22% with the daily in-state draw games like Pick 3, Pick 4 and Cash 5.
Officials clearly expect that trend to continue.
Here’s a look at the fiscal year 2021 projections that Hall shared with the appropriations committee:
|Fiscal Year 2020 Sales||2021 Projected Sales|
|Scratch-off games||$1.17 billion||$1.24 billion (+6%)|
|Daily draw games||$691.5 million||$770.3 million (+11%)|
|Jackpot games||$204.9 million||$213.3 million (+4%)|
|Other (iLotto, Print 'n Play, keno, etc.)||$83.5 million||$678.1 million (+712%)|
As you see, that previous throwaway “Other” category could soon become a major driver of sales.
Throw in the online offerings, and officials expect a jump from $83.5 million in “Other” sales in 2020 to $678.1 million, a 712% increase, in the coming year.