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NACS Online > News & Media Center > Fact Sheets > Lottery Sales in Convenience Stores

Industry Resources 
Lottery Sales in Convenience Stores 
July 1, 2006 

According to the North American Association of State and Provincial Lotteries (NASPL), lottery sales in FY 2005 were $52.6 billion in the U.S. and $8.4 billion in Canada (Canadian dollars). In the United States, this was an 6.9 percent increase over 2004. Roughly half of these sales are in convenience stores: the 1997 NACS Lottery Study found that convenience stores generated approximately $18 billion in gross lottery revenue on sales of lottery tickets (1997 dollars).

The top states in terms of lottery sales were New York ($6.27 billion in FY 2005 sales), Massachusetts ($4.48 billion), Texas ($3.66 billion), Florida ($3.47 billion) and California ($3.33 billion), according to NASPL.

The eight states that prohibit lottery sales are Alaska, Alabama, Arkansas, Hawaii, Mississippi, Nevada, Utah and Wyoming. (North Carolina instituted a lottery in 2006.)

Lottery sales help underwrite a variety programs, from education to construction, providing significant revenues to states that sponsor them.

  • The national average for the government "return" on lottery sales is 35 percent. The typical commission paid to retailers is typically between 5 and 8 percent.
  • Lotteries have raised almost $200 billion for government programs since the New Hampshire lottery began in 1964 (Source: NASPL).

Lottery customers are important contributors to overall convenience store sales.

  • The frequent lottery customer spends $7.07 per visit, while the infrequent lottery customer spends $4.80 per visit and the non-lottery customer spends $3.47 per visit (Source: 1997 NACS Lottery Study).
  • Lottery customers also shop more often: lottery customers shop 4.45 times per week at convenience stores, as opposed to 3.42 times per week by infrequent lottery customers.(Source: 1997 NACS Lottery Study).
  • On 95 percent of their store visits, lottery customers purchased at least one other merchandise product in addition to lottery. However, the average cost of handling a lottery transaction was 39 cents higher than for non-lottery transactions (Source: 1997 NACS Lottery Study).
  • According to a Gallup Poll on Gambling in America, 57 percent of Americans have bought a lottery ticket in the last 12 months (Source: NASPL).
  • Per capita spending on lottery in the U.S. in 2004 was $183.70 New York led the U.S. with the most sales ($5.8 billion), followed by Massachusetts at $4.4 billion (Source: NASPL).
  • In 2005, the average convenience store collected $12,899 in gross profits from lottery/lotto (Source: 2006 NACS State of the Industry report, same-store sales).

Lottery contributes to a positive shopping experience in convenience stores (Source: 1997 NACS Lottery Study).

  • Over half of the customers surveyed -- 55 percent -- felt that lottery was either somewhat important or extremely important to their choice of shopping destination.
  • Only a small percent of customers -- 9 percent -- wanted to see lottery eliminated.
  • Store managers also find lottery to be important -- over half agreed that traffic increased since the introduction of lottery in their stores.
  • Lottery was ranked fifth in terms of categories and their ability to generate other impulse sales of other products. The top four were household items, beer, cigarettes, and magazines/newspapers.

While all 40 states and the District of Columbia that permit lottery drawings offer "instant" lottery tickets -- such as scratch off, the states vary significantly in what retailers are also able to offer customers. Here are some details on various lottery games:

Daily number games:
Most states allow retailers to participate in three-digit daily number drawings in which players select a three-digit number for the daily prize (typically between $500 and $2,500). Four-digit daily number games (with payoffs similar to those of the three-digit games) are played in most states as well.

Lotto:
All lottery states (and the District of Columbia) participate in a lotto game in which the top prize is a multi-million dollar jackpot, often offered as a 20-year annuity or lump-sum equivalent. A total of 29 states (and the District of Columbia and U.S. Virgin Islands) participate in the multi-state Powerball drawing, and another 12 states participate in the multi-state Mega Millions. Several states participate in their own drawing, plus one of the multi-state drawings.