For the third consecutive year, the New Jersey Lottery has contributed over $1bn to support the state’s financial obligations as declared in its audit report for the fiscal year 2020 (FY20).
For the FY20 that ended on June 30, 2020, the lottery generated $3.215bn in sales and contributed $1.015bn in revenue to the Garden State, which is used to support its public employee pension system for teachers, police, firefighters and other public employees.
While sales were down 7.7% compared to the prior year, and the contribution to the state was down 8.1%, FY20 still produced the fourth-highest contribution on record. Since its inception in 1970 the lottery has contributed over $28bn to the state.
Executive Director James A Carey Jr said: “FY20 was challenging in several ways, and the New Jersey Lottery stepped up to meet those challenges. There was only one jackpot that exceeded the $300m mark, which restricted (or limited) the player excitement and media interest that comes as jackpots roll higher and higher.
“In March 2020, the COVID-19 was declared a national emergency and lockdown measures put in place to combat the pandemic impacted sales. After a difficult March and April, the lottery began to rebound in May and June and has continued to perform strongly since.”
Besides sales, the lottery’s contribution to the state was also bolstered by a payment from Northstar New Jersey Lottery Group, its sales and marketing vendor.
In May 2019, the lottery amended the services agreement with Northstar and increased the performance targets that are used to calculate any incentive payment owed to the vendor. If the net income targets in a fiscal year are not met, the incentive compensation is reduced or eliminated entirely and the vendor may owe a contribution shortfall payment to the lottery.
Northstar did not meet the net income targets under the contract for FY20 and consequently owed a shortfall payment of $19,915,065, which became part of the lottery’s contribution to the state. By comparison, in FY19, the lottery paid Northstar $26.1m in incentive compensation.
The audit report also details prize payments, which are the lottery’s largest expense. In FY20, New Jersey players won $1.970bn.
A player from Middlesex County won the Mega Millions jackpot of $202m on February 11, 2020. Another player from Middlesex County won the April 8, 2020 Powerball jackpot of $190m.
Seven players won second-tier prizes of $1m or more from Powerball or Mega Millions, while three players hit the Pick-6 jackpot, and another 30 players won $500,000 or more from Scratch-Offs or Jersey Cash 5. The lottery’s network of just under 7,000 retailers also earned $185m in commissions during the fiscal year.