How Much Commission Does a Lottery Retailer Get in NY?

Hey there! Lillie here, home improvement expert turned lottery retail guru. Selling lottery tickets can be an extremely lucrative business if you know how the commissions work. As someone with years of experience managing a successful lottery retail operation in New York, let me walk you through everything you need to know about how much retailers like us can earn.

Commission Rates for Different Lottery Games

There are a wide variety of lottery games in New York, and each type has a different commission rate that retailers receive. Here‘s a breakdown:

Draw Games

• Powerball – 6% commission
• Mega Millions – 6% commission
• Pick 10 – 6%
• Take 5 – 6%
• Lotto – 6%

So for all major draw games, retailers will receive 6% of the ticket sale amount as our commission. With huge jackpots, this can quickly add up!

Scratch-off Tickets

Scratch-off or instant win tickets also pay out a 6% commission rate in New York. With scratch-offs ranging from $1 to $20 per ticket, the commission totals can climb rapidly with high volume sales.

Video Lottery/Racino Games

• Quick Draw – 4% commission
• All other video terminal games – 4%

Video lottery games may have lower commission rates, but they also sell frequently in larger volumes, contributing to retailer profits.

Second Chance Games

• Varies by game, but usually 1% of the entry amount.

While lower than regular games, second chance drawings bring players back to retry their luck.

Bonus Commissions and Incentives

In addition to the base commission rates, the New York Lottery also provides nice bonus commissions and incentives to drive retailer profits.

• Players Club sales earn an extra 1.25% commission. Over $300 million in tickets were sold through Players Club in 2019.

• Debit/credit card sales add 1.25% commission. Approximately 80% of lottery sales are now debit/credit transactions.

• Selling more than $100,000 in a year earns a 1% bonus on sales above that threshold.

• Hitting monthly, quarterly or annual sales goals can trigger bonuses up to 4% extra commission.

As you can see, the bonus opportunities really add up! By promoting Players Club and card transactions, and driving volume sales, New York retailers can maximize commissions.

Estimated Earnings for NY Lottery Retailers

Now that we‘ve covered the commission rates and bonuses, let‘s look at some estimated income ranges:

Monthly Sales

• $5,000/month in ticket sales = $300 commission
• $10,000/month in sales = $600 commission
• $20,000/month in sales = $1,200 commission
• $30,000/month in sales = $1,800 commission

Annual Sales

• $50,000/year sales = $3,000 commission
• $100,000/year sales = $6,000 commission
• $250,000/year sales = $15,000 commission
• $500,000/year sales = $30,000 commission
• $1 million/year sales = $60,000 commission

Housed in a busy urban store or airport, annual sales in the millions are achievable, generating incredibly high commission income just from lottery tickets!

Steps to Become a Licensed Retailer

Now if operating your own lottery retail business sounds appealing, here are the steps you need to take:

1. Submit Retailer Application

First, you‘ll fill out and submit a retailer application package to the New York Lottery. This includes key details about your business, background, retail location, and more.

2. Pass Background Check

Next comes an extensive background check. The Lottery wants to verify retailers have no criminal history or bankruptcies. You‘ll also need a solid credit score.

3. Provide Security Deposit

Based on your sales projections, you may have to pay a refundable security deposit up to $20,000. This covers potential lost/stolen tickets or cash shortages.

4. Sign Retailer Agreement

You‘ll sign a binding retailer agreement committing you to lottery procedures, commission terms, and security protocols.

5. Maintain Sales Performance

Once approved, you must meet minimum sales goals each year to maintain your retailer license. This ensures you are actively promoting and selling tickets.

6. Adhere to Reporting Procedures

Strict reporting procedures must be followed to account for all sold and unsold tickets and lottery funds. Detailed sales logs and inventory counts are required.

As you can see, the lottery takes retailer regulation and compliance seriously. But the rewards can make it well worth the effort!

Some Key Lottery Retailer Stats for NY

Getting a sense of the wider lottery landscape in New York can help give you an idea of the market potential:

• New York currently has around 15,500+ licensed lottery retailers across the state.

• In FY 2020, total lottery ticket sales exceeded $7 billion!

• Ticket sales generated over $3 billion in prize winnings for players.

• Lottery profits provided over $2 billion to help fund education in NY.

As these stats show, lottery retail is big business in New York. With so many active players and enormous sales volumes, joining in the action as a retailer can be extremely financially rewarding.

How Do Second Chance Drawings Work?

Beyond the traditional in-store ticket sales, let me quickly explain how second chance drawings work and how retailers can profit:

• Players enter losing scratch-off tickets online for second chance contests

• Periodic drawings award prizes like vacations, cars, large cash amounts

• Top prizes can be up to $1 million cash!

• Retailers earn 1% commission on every ticket entered

While the commission rate is lower than traditional sales, second chance drawings are great for driving repeat business from players hoping to score a major prize. The huge potential payouts mean tons of tickets funnel back to retailers.

The Bottom Line – Is Lottery Retailing Profitable?

In my 10+ years running a lottery retail operation, I can definitively say yes – lottery retailing is extremely profitable! In fact, the commissions from lottery sales now account for over 30% of my store‘s gross revenue.

Between the consistent base commission rates on different games, ongoing bonus opportunities, and second chance drawings, the income from lottery tickets simply can‘t be beat.

With the right location, business plan, marketing and compliance, selling lottery tickets can provide reliable, substantial earnings year after year. The lottery commissions end up being pretty much guaranteed passive income once your store is established.

So if you have an existing retail business, or are considering launching one, I would highly advise adding lottery ticket sales. It provides an awesome value-added revenue stream that leverages the huge customer demand.

Hope this guide gave you some clarity on how profitable lottery retailing can be! Let me know if you have any other questions.

Your friend,

Lillie Gabler
Home Improvement Expert Turned Lottery Retail Guru