Currently, the law requires the lottery to maintain a minimum 20% profit on traditional games like number draws and scratch cards, but this rule does not apply to online lottery games
The Pennsylvania Lottery has asked lawmakers to rethink the state’s old 20% profit rule for regular lottery games. Lottery executives say getting rid of this rule would let them offer more game types and make more money for state programs that help older state residents.
Pennsylvania Lottery Pushes to End Profit Mandate, Citing Demand for Higher-Priced Scratch-Offs
Right now, the law says the lottery must keep at least 20% profit on all regular lottery games, like number draws and scratch cards. However, this rule does not count for online lottery games. As people now like to buy pricier scratch cards, lottery executives say the current profit rule stops them from giving customers what they want.
In the 2023-24 fiscal year, the Pennsylvania Lottery saw $4.8 billion in traditional game sales. This marks its 13th year in a row to generate over $1 billion in profits. Despite this success, officials think allowing better payout rates on pricier scratch-off games could boost revenue even more.
Scratch-off tickets that cost $30 and $50 have gained popularity. Players like the chance to win multimillion-dollar jackpots. However, these games need a higher payout percentage. This makes it tough for the lottery to keep the 20% profit threshold. Officials say that getting rid of this rule would let them offer more of these high-cost games. They believe this could draw in more players and increase overall revenue.
Governor Josh Shapiro has backed getting rid of the profit mandate as part of his larger budget plan. His 2025-26 budget proposal stressed that the lottery could bring in more money by using a more flexible pricing model.
Debate Grows Over Lottery Changes as Critics Warn of Harm to Low-Income Communities
Shapiro also wants to regulate and tax skill games — controversial machines that look like slots and now work in a legal gray area. He thinks more gaming money, including from an updated lottery system, could help pay for key public services, like an extra $500 million for schools that need more funds and $290 million for public transit projects.
Despite the lottery’s push to change policies, some worry that getting rid of the profit rule could bring bad social effects. Andrew Shaffer, who is part of the National Board of the Stop Predatory Gambling Foundation, spoke to Casino.org and warned that making it easier to buy pricey scratch-off games might hurt poor communities more than others.
Shaffer claimed that lottery ticket sales are highest in areas where people do not have much money and might already be having trouble paying bills. He thinks the lottery works like a “tax that hits the poor harder,” with a big chunk of its money coming from folks who cannot afford to lose cash on gambling. He also pointed out that many older people who get help from lottery-funded programs do not want to see more gambling options, as they worry about how it could affect younger people.
As lawmakers keep debating, they need to balance the money the state could make by dropping the profit rule against the worries of those who oppose gambling. It is not clear yet if the Pennsylvania Lottery will get more freedom to offer different games, but people expect the talks to heat up in the next few months.
