do stores make money on lottery tickets

The benefits of being a
Lottery retailer

The chance for bonuses, incentives and giving back

Do Lottery retailers get paid for selling winning tickets?

There’s a reason over 5,000 stores in Virginia sell Lottery tickets. Virginia’s authorized Lottery retailers are eligible for various commissions and bonuses for selling Lottery tickets.

But what about stores that sell winning Lottery tickets? They see even more money through the Lottery’s Selling Bonus Program. The higher the player’s winnings, the higher the bonus.

How much money do Lottery retailers make from the Selling Bonus Program? In this post, we’ll discuss what the Virginia Lottery’s retailer incentives are and how your store can start selling tickets today.

Do stores make money selling Lottery tickets?

Yes, stores that sell Lottery tickets earn a commission from all game sales.

Authorized Lottery retailers in Virginia currently earn a 5% commission for all Lottery games sold in-store. Those sales record as a “credit” on the weekly settlement report. Commissions do not come out of any winner’s prize.

In addition to ticket sales, there are other ways Lottery retailers get paid.

  • Claims earnings: Winning tickets that are cashed at your store qualify you for additional bonuses. Actual bonus amounts vary by game and year.
  • Retailer bonus: Retail locations that sell draw tickets with prizes of $20,000 or more qualify for further bonus payments. Bonus amounts are tiered according to the winner’s prize. The higher the prize, the higher the bonus.
  • Performance incentives: The Lottery tracks each retailer’s sales and prizes. Stores with higher ticket sales may be eligible for additional retailer bonuses.
  • Retailer promotions: The Virginia Lottery offers periodic promotions on specific draw games or Scratchers. Higher sales commissions can exist for the game being promoted.

The 5% commission combined with bonuses, incentives and promotions add up. In Fiscal Year 2019, the Virginia Lottery’s total gross sales reached a record high of $2.293 billion. Over half of those gross sales went to funding Lottery prizes: The Lottery paid over $1.4 billion in prizes in FY19.

Retailers received $128.7 million in compensation from ticket sales, incentives and winning-ticket bonuses in FY19.

What about bonuses for selling winning Lottery tickets?

Stores that sell winning Lottery tickets earn additional bonuses. Those bonuses fall into two categories.

1. In-store claims bonuses: Scratcher and draw-game winnings cashed at your store entitle you to a 1% commission. All in-store claims bonuses will appear as a “credit” on the weekly settlement report.

2. Big-win bonuses: Big-win bonuses come from selling tickets with a prize of $20,000 or more. Big-win bonuses are particularly exciting for players and retailers. Currently, the Virginia Lottery gives tiered bonuses for big wins:

  • $20,000-$49,999 ticket prize: Retailers receive a $250 bonus.
  • $50,000-$99,999 ticket prize: Retailers receive a $500 bonus.
  • $100,000-$499,999 ticket prize: Retailers receive a $750 bonus.
  • $500,000-$4,999,999 ticket prize: Retailers receive a $10,000 bonus.
  • $5,000,000 prize or higher: Retailers receive a $50,000 bonus.

These bonuses for selling winning tickets apply to draw games and Scratchers.

  • For draw games: Draw-game tickets must be verified by the Virginia Lottery’s scanning system and claimed at a Lottery Customer Service Center or Prize Zone. Any prize totaling over $600 must be claimed at these designated centers following Virginia Lottery rules.
  • For Scratchers: Winning tickets must be claimed by the ticketholder and then validated by a Virginia Lottery official, either at a Lottery Customer Service Center or a Prize Zone.

How Lottery retailers use winning-ticket bonuses

Lottery retailers have a deep history of supporting their communities with their bonuses and commissions. Consider this example below.

  • The Midway Street Kroger in Bristol donated its entire $10,000 big-win bonus to two regional charities (the Jericho Shriners Temple and the Second Harvest Food Bank) after selling a $1 million-winning Powerball ticket.

The Lottery benefits multiple groups

All Virginia Lottery proceeds go directly toward funding K-12 public education in Virginia. Here are some of the ways the Lottery benefits Virginians.

1. Winners

Lottery winnings can be life-changing for the lucky winner.

2. Retailers

Lottery tickets offer retailers a revenue stream with few expenses or operational costs. The combination of routine ticket sales plus retailer commissions and bonuses makes selling Lottery games an attractive option for stores across Virginia. Plus, players stopping into your store to buy tickets are more likely to buy other merchandise.

3. Public education

In Fiscal Year 2019, the Lottery turned over almost $650 million in proceeds to fund K-12 public education in Virginia. That number represented 10% of Virginia’s education budget. It now remains a permanent clause in the Virginia Constitution that all Lottery proceeds go exclusively to supporting K-12 public education in Virginia.

You can get your prize money right where you are: at the retailer. Lottery retailers can cash all winning tickets with a prize up to $600.

How to Become a Lottery Retailer

Do you own a retail business? Sell lottery tickets to bring in more customers to your location. And increase your revenue.

In addition to the commission, you stand to earn on direct sales. Certain states, like Pennsylvania, even offer bonuses or percentages for retailers that sell winning tickets. In Michigan, licensed retailers brought in $5.2 million from Mega Millions commissions. And $264.9 million in total lottery earnings.

For many businesses, added income represents only part of the draw of becoming a licensed lottery retailer. Customers come in to buy lottery tickets. But they might also buy other items. And that means a chance for even higher profits. As a result, customers might even make your store a routine visit.

There are various types of lottery tickets you can offer, including those that are specific to your state, as well as multi-state games like Powerball or Mega Millions. If you’re interested in becoming a licensed retailer for any of these games, here are some of the things you need to know.

Determine If You’re a Good Candidate

Not every store is well suited to become a licensed lottery retailer. Before applying, consider whether or not your customers or potential customers are likely to appreciate the ability to buy lottery tickets on site. In most occasions, this type of purchase is well suited to businesses that offer impulse purchases and items of convenience, like gas stations and liquor stores. However, some grocery stores and even bars or restaurants have been able to benefit from offering certain types of lottery tickets or games.

You should also read through the requirements of your state. Some states require that businesses already be up and running before applying to sell lottery tickets. Other states, like Ohio, allow new retailers to apply. There may also be requirements that the owners of the business might meet. For example, criminal history or poor credit may disqualify some owners from participating.

Improve Your Facility

Many states have requirements for facilities that distribute lottery tickets. For example, you might be required to have security cameras on site or you may need to have all parts of your store accessible by wheelchair. In fact, unless your business is located in a historic building that is exempt, you should be in compliance with the Americans with Disabilities Act regardless. But do some research on your state’s requirements and then make sure that your store is up to par before applying, in order to avoid wasting valuable time and money.

Determine What Games to Offer

There are several different types of lottery games you can offer, depending on your state. You may simply offer inexpensive scratch-off tickets. You might focus on high money games like Mega Millions. If you have a bar or area where people might spend extended periods of time, Keno could be a good fit. Research all of the options in your state so you know which applications you need to focus on. In some cases, your state might have a single application. In others, you might need to specify what games you want to offer right away. So it’s a good idea to know what you’d like to focus on before getting started. Or you could simply apply to offer a wide array of lottery products at your location.

Apply with Your Lottery of Choice

Each state has a different set of requirements for applying as a lottery retailer. However, most have online applications that allow you to get started fairly easily. You’ll likely have to pay a small fee and include some information about your business. The process may also include a credit check and/or background check. The online platform should walk you through what information is required in order to complete your application.

Follow Instructions from Your State

From there, a representative visits your location. They make sure you meet all of the site requirements. And tell you if you also need to take a class or attend a training session. They also make sure all of your customer facing employees get training too. First fill out the application. You should keep in touch with a lottery representative. They help to walk you through the rest of the process and the requirements. However, this may take months, depending on how complicated the application and checks are to complete.

After you complete all of those required steps, your state’s lottery representative should come to your location and install a machine or whatever equipment you need to get started selling. It’s in their best interest to make everything as easy as possible for you and your customers so you can make as many sales as possible and start earning money for your business and the state lottery organization.

If you own a retail business, selling lottery items can help you bring more customers in and increase revenue. Here’s how to become a lottery retailer. ]]>