How The Lottery Corporation Thrived Despite a $400 Million Jackpot Slump
The Lottery Corporation reported resilient half-year results for 1H26 despite a significant $400 million hit from unfavourable jackpot outcomes, underpinned by strong Keno growth and a stable dividend payout.
- Unfavourable jackpot outcomes reduce turnover by approximately $400 million
- Keno segment shows robust growth, offsetting lottery jackpot declines
- Digital share of Lotteries turnover rises to 41.2%, reflecting ongoing digital adoption
- Interim dividend maintained at 8.0 cents per share with a payout ratio of 103%
- Strong balance sheet supports strategic investments and operational flexibility
Resilience Amid Jackpot Variability
The Lottery Corporation has delivered a steady financial performance for the half year ended 31 December 2025, navigating through one of the least favourable periods for jackpot outcomes since its demerger. The company faced an estimated $400 million adverse impact on turnover due to lower-than-expected jackpots in marquee games such as Powerball and Oz Lotto. Despite this, underlying business fundamentals remained robust, showcasing the resilience of its diversified portfolio.
Keno and Digital Channels Drive Growth
Strong growth in the Keno segment was a highlight, with retail turnover increasing across all states and a return to digital growth following the introduction of spend limits in FY25. The digital share of Lotteries turnover climbed by 80 basis points to 41.2%, underscoring the company’s successful push towards embedding digital experiences across its platforms. This digital momentum is critical as The Lottery Corporation accelerates its evolution into a digital entertainment company.
Strategic Game Changes and Customer Engagement
The company’s recent game changes, particularly the Saturday lotto price increase, have been well received, with a strong price retention rate of 103%. These adjustments, alongside active portfolio management, have helped offset some of the jackpot-driven volatility. The company also reported growth in base games such as Lucky Lotteries and Instant Scratch-Its, which contributed positively to turnover despite the jackpot slump.
Financial Discipline and Shareholder Returns
Operating expenses grew below inflation, reflecting prudent cost management. The interim dividend was maintained at 8.0 cents per share, consistent with the prior corresponding period, with a payout ratio of 103%. The balance sheet remains robust, with net debt at $2.24 billion and a leverage ratio within target ranges, providing flexibility for ongoing investments and organic growth opportunities.
Looking Ahead – Unlocking Further Value
Looking forward, The Lottery Corporation is focused on modernising its platforms, enhancing digital engagement, and exploring new product opportunities. Key initiatives for 2026 include further investment in Keno, brand refreshes, and game enhancements such as the planned Set for Life changes. The company aims to strengthen its position in the domestic market while maintaining disciplined capital allocation and operational execution.
Bottom Line?
The Lottery Corporation’s ability to weather jackpot variability while driving digital growth sets the stage for a dynamic second half of FY26.
Questions in the middle?
- How will upcoming game changes, like Set for Life, impact turnover and customer engagement?
- Can digital growth continue to offset jackpot-driven volatility in the long term?
- What strategic moves will The Lottery Corporation make to sustain shareholder returns amid market uncertainties?
