A piece of legislation that will reduce the Pennsylvania Lottery’s profit margins, and in turn increase prize payouts, is making its way through the state legislature.
House Bill 1058 was introduced by Representative Melissa Shusterman of the Democratic Party back in March. The bill has been approved by the House of Representatives and Senate, with amendments, and was returned to the House earlier this month.
The bill, complete with its amendments, has now been approved by the House and awaits the signature of the Governor of Pennsylvania, Josh Shapiro. The bill focuses on two somewhat unrelated areas – lottery reform and child custody proceedings.
On the former, the bill will remove the profit margin requirement for lottery-derived funds towards free transport for Pennsylvania senior citizens, with the margin requirement currently standing at 20%.
Rep Shusterman’s rationale for introducing the bill was that the change would allow the Pennsylvania Lottery to compete with more fluidity and focus more on achieving its gross profit goals.
This would in turn give the lottery more leeway with player prizes – with less concerns about meeting profit margin requirements, this could free up lottery funding to go back to players, something which could also lead to more people playing the lottery.
Prior to the final House vote, Shusterman said in the legislative chamber: “I believe that the Senate changes are a fair compromise without losing the intent of my legislation, which is to allow the lottery to focus on maximising gross profits instead of maintaining an arbitrary profit margin.
“The change does not affect the fiscal estimate of the bill, which the lottery believes will increase lottery profits to benefit senior programmes by $1.2bn over the next 10 years.”
Legislators have likely had a couple of different objectives with this bill. Firstly is the abovementioned belief that by giving the lottery more room to compete and pursue gross profits, it will be able to return more to good causes.
Secondly, however, legislators may also be wanting to see the lottery compete better against the growing licensed betting market in Pennsylvania, one of the largest in the US.
Since the repeal of PASPA in 2018, the Pennsylvania Lottery has found itself going up against the likes of FanDuel, DraftKings and Rush Street Interactive (RIS), among others, though it has been enhancing via deals with the likes of Scientific Games and Instant Win Gaming (IWG).