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The Lottery Corporation

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

Selling your lottery business and keeping your shop might be a smart move

More newsagents outside of Western Australia are selling their lottery business. Not because they’re struggling — because they’re thinking ahead. I am seeing this move more and I guess others are too.

Some do it while winding down. The lottery licence has value, selling it separately makes the exit numbers work better than a whole-of-business sale. That’s been happening for years.

What’s newer is the transformation sale. Retailers actively rebuilding what their shop is and who it serves are looking at their lottery setup and seeing floor space, staff time, and capital locked into a product they no longer control.

The Lottery Corporation’s direction isn’t hard to read. Digital. Direct. Their money is going into moving lottery players onto their own platform. Every campaign pushing customers to the app reduces the long-term value of a retail licence. Newsagents paying attention are moving before the market moves for them.

Selling in that context isn’t giving up ground. It’s freeing it up.

The footprint a lottery terminal takes matters when you’re rebuilding a shop around gifts, collectibles, or homewares. That space earns more doing something else. The capital from the sale funds the change. The staff hours no longer absorbed by lottery transactions go somewhere that actually builds the business.

Buyers are around. Supermarkets adding a service draw. Chemists expanding their convenience offer. Standalone operators shifting the whole thing to a kiosk. For those buyers the licence fits traffic they already have. For the newsagent selling, it’s a clean separation.

This isn’t the right move for every retailer. If lottery is still generating foot traffic that converts into other purchases, the calculation is different. But look honestly at what lottery customers buy beyond their ticket. In a lot of shops the answer is not much.

The Aussie newsagency channel is mid-transition – well, for most retailers at least.

The retailers shaping what comes next are making deliberate decisions about what stays in the business and what doesn’t. Lottery deserves that same deliberate look — not held onto by habit just because it’s always been there.

I haven’t had lotteries in my newsagency businesses for 14 years now. It’s not necessary for success. What I love about not having it, having had it for years, is to not have to deal with what I personally found to be a bullying partner who thought they knew about newsagency retail, when they didn’t.

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Lotteries

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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