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lotteries

What The Lottery Corporation’s FY26 results mean for newsagents

The Lottery Corporation released its FY26 results and annual report this week. There is plenty in them for anyone with lotteries in their shop, including one number that will get less attention than it deserves: the migration of lottery sales online has stalled, for now.

The year in numbers

Lotteries turnover was $6,547 million, down 3.1%. TLC puts the fall down to a ‘bad’ run of jackpots, which it calls a 1 in roughly 45 year outcome, costing around $700 million in turnover. There was no $100 million-plus Powerball for the first time since FY21 and no $50 million-plus Oz Lotto for the first time since FY17.

That context matters. Soft lottery commission in FY26 was bad luck with jackpot sequences, not a collapse in play. Base games grew 5.6%. Saturday Lotto was up 9.4%. Instant Scratch-Its rose close to 8%, and scratchies are a retail product.

Digital migration has stalled, for now

Digital turnover fell 2.3% to $2,760 million. Retail turnover fell 3.8% to $3,787 million. Digital’s share of lottery turnover crept from 45.7% to 46.6%, and the share gains are shrinking each year: 2.3 points in FY24, 1.4 in FY25, 0.9 in FY26.

Digital sales have now gone backwards in dollars for two years running, from a jackpot-fuelled peak of $3,005 million in FY24. Retail still writes the majority of lottery turnover.

Before anyone celebrates, I have two cautions to share. Jackpot games skew digital, so a weak jackpot year flatters retail’s position. Some of this pause is mix, not migration reversing. And TLC’s strategy leaves no doubt about direction.

TLC describes itself as moving from a lottery operator to a digitally-led entertainment platform, calls digital its primary growth engine, is building a new app for 1H28 and wants to convert more than 4 million unregistered players into known, registered customers.

The shift online has slowed, not stopped.

What retailers should watch

A commission review is coming. In the FY27 priorities published by TLC is: “review retailer commission structure”. No detail is given. Individually and through our representative bodies, we need to engage early and argue for a structure that rewards service and performance rather than one that shrinks the pool

The network language has changed too. TLC now talks about its retail footprint as quality over quantity. Expect continued pressure on marginal outlets and higher expectations of those that stay. At 30 June 2026 there were 3,880 lottery outlets and 3,263 Keno venues, more than 7,100 points of distribution in all.

The channel is still valuable. TLC paid $637 million in commissions to retail and venue partners in FY26, and its CEO acknowledged those partners are primarily small businesses.

Price rises keep coming. Powerball went from $1.20 to $1.40 a game in November 2025 and held 63% of the increase. Set for Life goes from 60 cents to 70 cents in September 2026, with an Oz Lotto change slated for 1HFY28.

On integration, new terminals have been rolled out in NSW, the ACT and Queensland, with Victoria to follow. QR codes on unregistered tickets, digital prize claiming and Check & Collect blur the line between channels. Where TLC connects digital play back to a retailer, support it. Where it does not, ask why.

What I would do in-store

Nothing in these results changes my long-held advice. Don’t run a business reliant on lottery commission to survive. Lottery products bring traffic on thin margin, and around 30% of turnover from lottery commission is the most a well-balanced newsagency should rely on. Even though it is hard hard work, use the traffic to build baskets in cards, gifts and good margin categories. And watch that commission review like a hawk.

The point

TLC had a soft year because jackpots ran cold, not because Australians stopped playing. Digital sales fell and the migration online has stalled for now, while the company’s plans remain firmly digital. Retailers have been handed time and a warning in the same set of results. What we do with both is up to us.

General commentary, not financial advice.

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Lotteries

Why newsagency goodwill is not what it used to be

This is the first post in a  series on newsagency succession and exit. It sets the scene: why so many businesses now struggle to find a buyer. The posts that follow move from this hard diagnosis through valuation, preparing to sell, deal structures, family and partner succession, and finally closing and life after the shop.

The no-buyer businesses in this series share a root cause. The goodwill that once made a newsagency saleable has largely gone. Understanding why matters, because the reason is not the one most people reach for.

The easy explanation is that print died. It is not that simple, and the simple version leads owners to the wrong conclusions.

The numbers are real

The decline is not imagined. Newspaper unit sales in the businesses I track fell around 13% year on year in 2025, an acceleration on prior years. Magazine unit sales dropped roughly 10% across the board in the same period. Industry revenue has fallen at an annualised 5.2% over five years, and IBISWorld expects the decline to continue.

Lotteries, long the reliable traffic driver, are shifting too. More than 40% of lottery sales now move online, bypassing the shopfront entirely. The traffic a buyer used to bank on is thinning.

But print decline is not the real killer

Here is the part owners get wrong. The collapse in goodwill is not mainly about print falling. It is about businesses that stayed dependent on print while it fell.

The margin on print was always poor. A medium newsagency selling 50 copies a day of a major daily makes under $7,000 a year gross from it, and many newsagencies actually lose money on magazines once labour, space and theft are counted (). A business closing because print fell was, in my view, a business rooted in the past. The print wasn’t paying the bills anyway.

So the goodwill did not collapse because paper sales fell. It collapsed because too many owners built nothing to replace print, and a buyer will not pay goodwill for a shop with no defensible profit.

What a buyer sees

A buyer values future profit they can rely on. Look at the legacy newsagency through their eyes and the problem is obvious.

Declining, low-margin print. Lottery commission leaking online. Foot traffic that came for products now available elsewhere or on a phone. No strong, owner-built category throwing off real margin. There is nothing there to pay a premium for. The goodwill is gone because the future earnings are uncertain and thin.

That is the honest anatomy of a no-buyer business.

The lesson in the collapse

The healthy businesses tell the counter-story. A well-run modern newsagency should make less than 10% of turnover from print, around 30% from lottery commission, and 60% from gifts, homewares, books, toys and the like, categories delivering 50% and more gross profit ().

Those businesses have goodwill because they have defensible, growing profit. The ones with no buyer are, overwhelmingly, the ones that never made that shift.

The point

Goodwill collapsed in the businesses that stayed tied to print and lottery while both thinned, and that built nothing profitable in their place.

That is a hard message, but it is also a hopeful one. The businesses that did diversify still hold value and still sell. Which is the subject of the next post.

Footnote: it’s never to late to start diversifying.

Second footnote: I am seeing too many who think they have diversified and while they have changed, they have not change enough.

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newsagency of the future

What we can learn from The Lottery Corporation Investor Day in Sydney

The Lottery Corporation held an Investor Day in Sydney last week and I am grateful for insights someone who attended shared with me. Here are takeaways that could interest newsagents who sell lotteries.

1. DIRECT TARGET: CONVERTING RETAIL CUSTOMERS TO DIGITAL

The absolute biggest priority for The Lottery Corporation (TLC) is converting unregistered retail shoppers into registered digital users. They said this in Sydney and they have said publicly elsewhere. The hiring decisions announced last week also speak to this.

The Gap: TLC currently has approximately 8,600,000 active players, but only 4,300,000 are registered. That’s what they are chasing. Some retailers see these folks as their customers. TLC sees them as their customers.

The Strategy: TLC intends to identify these in-store customers, transition them into app users, and market directly to them to increase playing frequency and retention.

Retail Impact: This represents a deliberate strategy to shift the customer relationship away from the physical counter and directly onto TLC’s own digital platforms.

2. RETAIL NETWORK FRICTION & STRUCTURAL CHANGES

The balance of power is shifting, which is expected to cause what some call a “tricky period” of tension between TLC and independent retailers.

QR Codes: The introduction of new QR codes on physical tickets is seen by  newsagents as a direct mechanism for TLC to poach their foot traffic and data.

Cap on Outlets: TLC is freezing the expansion of its physical retail network. That is a huge message on where TKLKC sees retail. Growth will no longer come from opening new outlets; instead, the focus is entirely on extraction, productivity, and quality over quantity from the existing footprint.

The Margin Shift: For TLC shareholders, this migration is highly lucrative: every 1% of turnover that moves from physical retail to digital adds roughly $6,000,000 to TLC’s EBITDA.

3. GAME REFRESHES AND PRICE INCREASES

TLC is taking a more active approach to game management, price increases, and margin optimisation than previous management.

Set for Life (S4L): A major refresh is launching in September 2026. Ticket prices will increase from 60 cents to 70 cents, introducing additional cash payouts while keeping the top prize at $20,000 a month for 20 years.

Oz Lotto: This is officially under review and is expected to be the next major game overhaul.

4. THE YOUNGER COHORT PUSH

TLC is repositioning itself from a traditional lottery operator into a “digitally led entertainment business.” A key focus of this transformation is capturing younger adults. TLC plans to introduce more social features, syndicates, subscription models, and AI-driven personalised recommendations to attract younger sports-betting demographics who are hunting for “lottery-style” high odds.

To me, the big note here are the tight focus on migrating shoppers to digital – evidenced by the QR code move, new hires, freezing new outlets and absolute clarity in the business about the commercial value of the transition.

COMPLAINING IS A WASTE OF TIME.

TLC is a public company with one requirement – to drive shareholder value.

In my opinion, complaining about what they are doing will not improve the situation of any retailer, investing money in lobbying them will not deliver a lasting benefit for any retailer.

If I was representing lottery retailers or if I was a lottery retailer, my focus would be on lobbying TLC for permission to place other products in the lottery area – to support retail and provide a smoother path to the transition TLC is seeking.

The best thing a TLC lottery retailer can do is to urgently recalibrate the business to bring shoppers in for products outside of lottery products, do the bare minimum to satisfy the franchise agreement and create a business that is strong without any lottery revenue.

If you have lottery products are feel you will lose your business as they migrate lottery customers to digital, you have to act today to improve your business. Nothing else matters.

If you’re in Newspower, Nextra or The Lucky Charm, ask what they are doing about this. I say this as what I have been sharing here on this is part of what I share with newsXpress members.

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Lotteries
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