In Indiana, lottery sales and marketing put in hands of private firm

Stateline Midwest ~ November 2012

Indiana lottery officials announced in October that they were handing over day-to-day operations of sales and marketing to a private contractor.

This decision to outsource services is designed to boost state revenue from the Hoosier Lottery, with officials projecting an annual increase of $100 million during the first five years of the integrated services agreement.

Gov. Mitch Daniels noted in a press release following the decision that his state’s lottery revenues “lag far behind most states.” GTECH, the company handling sales and marketing for Indiana, will receive performance incentives. According to The Wall Street Journal, Hoosier Lottery officials expect revenue to increase when they begin to sell tickets at grocery stores, big-box stores and discount stores. Illinois was the first state to hand over management of its state lottery.

The Chicago Tribune reported in July that in the first year of this new arrangement, the lottery turned a record profit. Net revenue, though, was still less than promised. According to the most recent U.S. Census Bureau data, ticket sales from state-administered lotteries in the Midwest range from $2.3 billion in Ohio to $23 million in North Dakota.