Powerball owner’s unlucky half for jackpots hits profit
Australia’s biggest lottery operator says the first half has been resilient despite it being the least favorable period for winning a jackpot in nearly four years.
Lottery Corp, which operates the Powerball and Oz Lotto draws and Keno games, made a net profit of $173.3 million in the first half, down 1.4 percent.
Revenue for the period increased two percent to the equivalent of $1.8 billion, while earnings before interest and taxes fell one percent to $313 million.
But performance showed resilience despite a $400 million negative impact on turnover during the “least positive half-year for jackpot results” since its split from gaming group Tabcorp in 2022.
Finance chief Adam Newman said around half of the group’s turnover came from jackpot games.
“There’s always going to be a period of volatility depending on where these balls come out of the barrel,” he told analysts during an earnings briefing.
“I don’t think we can escape this.”
Although there was no jackpot, it was a strong underlying performance, according to Wayne Pickup, CEO of The Lott.
The lottery division saw a 2.8 percent drop in underlying earnings to $269.3 million, as the value of Powerball and OzLotto jackpots fell by 14.2 percent.
“Growth in the core games portfolio has largely offset reduced jackpot game volumes,” Mr. Pickup told shareholders.
But The Lott also noted that the new $6 million division 1 offer and subscription price increase for Saturday Lotto draws, introduced in May, was “immediately accepted” with strong price protection.
A similar price increase was made for Powerball in November, and further increases were on the table.
“This is something the business has done extremely well over time and will certainly continue to be one of our levers, but it’s not the only lever we’re looking at,” Mr. Pickup said.
“And as you probably know with these lottery products, that price increase is tied to bigger jackpots, bigger prizes, so there’s an immediate upside for customers, our retail partners, and commissions.”
Set for Life will be The Lott’s next game revamp; Additional pre-rewards and a more expensive subscription will be available for episodes 1 and 2.
Lott’s popular Keno arm continued to grow, with underlying earnings rising 11.8 percent to $43.7 million.
Lottery Corp will pay an interim dividend of eight cents for the half-year ending 31 December in line with the previous relevant period.
Looking ahead, the company remains focused on its strategy, which includes evolving as a digital entertainment company, focusing on Australia’s heavily regulated market, and making technology investments.
“Ultimately, we want our customers to choose us for the fun, not just the big bonuses,” Mr. Pickup said.
“Technology delivers personalized experiences at scale, which is what keeps customers coming back and engaging.”
The stock market reacted positively to the results, with The Lott’s share price rising five per cent to $5.42 in morning trading.
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