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The Pennsylvania Lottery wants to bump up the number of games it sells with big-ticket prizes.
It’s a move that could bring in more money for senior citizen programs by offering more attractive games to Lottery players.
“There is an increasing demand for games with bigger payouts — such as the $50 and $30 Scratch-Off tickets,” said Ewa Swope, press secretary for the Lottery, in an email.
The argument is that if the Lottery dedicates more money to payouts, it will attract more customers and rake in more profit — all of which goes to programs benefiting older Pennsylvanians, such as free bus passes, property tax and rent rebates, and low-cost prescriptions.
But those high payouts mean lower profits, and the Lottery is required to make at least a 20% profit from traditional games sales.
It’s something the Lottery wants to change, and Gov. Josh Shapiro’s 2025-26 budget calls on the legislature to eliminate the profit margin requirement.
The requirement means the Lottery must be conservative about how much it spends on payouts, its biggest expense. Eliminating the requirement means the Lottery could offer more games with high payouts, enticing customers to buy more tickets and generating more profit, even if the percentage is lower.
Essentially, it's a smaller slice of a larger pie.
It won’t change the likelihood that an individual customer will win, Swope said.
“The only thing that will change is that the Pennsylvania Lottery will be able to offer more of the higher price-point games that are popular with our players,” she said.
Scratch-off sales represent about two-thirds of traditional game sales, but numbers have declined: Sales dropped 7.4% in the 2023-24 fiscal year.
Meanwhile, customers are shifting toward buying the higher cost, higher payout scratch-offs, such as the $50 tickets that see prizes of up to $5 million.
“Although it may seem counterintuitive, this artificial profit percentage mandate actually constrains the Lottery’s ability to generate profit — and therefore more money for senior programs,” Swope said.
In 2023-24, about 67% of revenue went to payouts, about 2% to administrative costs, and about 6% to retailer commissions, leaving a profit of 24% for traditional games.
That’s about $1.15 billion that went to senior programs from traditional game sales. If the profit requirement were eliminated, the Lottery could bring in “an incremental increase of $1.24 billion in profit over 10 years,” according to the latest Lottery profit report.
The proposed change is not without pushback. Andrew Shaffer, a board member of the national nonprofit Stop Predatory Gambling, is against the expansion of high payout games.
“The real question we should be asking is whether increasing the already widespread participation in the Pennsylvania Lottery is something that serves the best interests of the people of Pennsylvania,” he said in an email. “Many of the older Pennsylvanians whom the Lottery ostensibly supports do not want the state to push addictive gambling products on their children and grandchildren.”
Shaffer worries that increased lottery participation will “inevitably cause the number of people who are harmed by excessive Lottery gambling to increase.”
In 2024, about 4% of callers to the statewide gambling helpline identified Lottery games as their most problematic form of gambling. Some Lottery funding is given to the helpline, run by the Pennsylvania Council on Compulsive Gambling, said Executive Director Josh Ercole.
As far back as 2013, Lottery officials advocated for a reduction in the profit requirement. In recent years, it’s advocated for the elimination that Shapiro is suggesting.
“Without a change in the law, we will reach a point where the Lottery will be forced to pull back on these popular games with bigger prizes just to meet the artificial profit percentage requirement,” Swope said. “We are asking members of the General Assembly for their help in eliminating the profit percentage mandate so that the Lottery can plan appropriately to continue increasing prize payouts and, in turn, generate more profits for senior programs.”
Lawmakers have frequently approved acts to decrease the profit margin, which began at 30% and reached the lowest yet at 20% in 2019. In 2022, the legislature extended the 20% requirement another five years.
When it expires in 2029, it will return to 25%.
Pennsylvania is one of seven states with a profit margin mandate and is the only state to dedicate its profits specifically to benefit older residents.
Abigail Hakas is a reporter for Next Generation Newsroom, part of the Center for Media Innovation at Point Park University. Reach her at abigail.hakas@pointpark.edu.
Kalliyan Winder is an intern for Next Generation Newsroom. Kalliyan is a third-year student at Point Park University. Reach her at krwinde@pointpark.edu.
