Bigger, more regular Powerball prizes could soon be on the way, as The Lottery Corporation, which runs the game, has more cash in its coffers than expected.
Analysts at investment bank Citi have upgraded their valuation of the Australian Stock Exchange (ASX)-listed company’s shares.
To offset a potential drop in sales, analysts expect The Lottery Corporation (TLC) to offer larger, more frequent Powerball prizes and increase the chances of winning a larger sum.
The law governing the games requires TLC to reserve a portion of sales (about 2.5 percent for Powerball) into a prize reserve fund, the Australian financial review reported.
If the jackpot accumulates for a few weeks because no one has won it, this reserve fund grows larger than necessary because the jackpot is not paid out.
Bigger, more regular Powerball prizes could soon be on the way, as The Lottery Corporation, which runs the game, has more cash in its coffers than expected. Pictured is a Powerball winner.
Excess funds allow the Corporation flexibility as to how high jackpots can reach from week to week.
There have already been two big wins this year, with the Powerball reaching $200 million in February and $150 million last month.
“Our analysis indicates that after a good year for jackpots, Lottery Corp will frequently skip steps in the sequence to increase the chances of generating big prizes,” Citi’s Adrian Lemme and James Wang wrote in a note to investors.
In simple terms, this means they expect TLC to offer bigger prizes more regularly.
Citi estimates that TLC will see a 4.4 percent rise in revenue to $4.1 billion in the year to June 30, with a 7 percent rise in net profit after tax of $422.4 million. Dollars.
When its Powerball revenue grew 19 percent in 2021 and 33 percent in 2023, TLC increased its prize pool to get customers to buy more tickets.
The law governing the games requires The Lottery Corporation to reserve a portion of sales (about 2.5 percent for Powerball) into a prize reserve fund. Pictured is a Powerball ticket.
Analysts at Citi have forecast a 4 per cent drop in Powerball revenue in the next financial year, meaning jackpots are likely to be bigger.
Lemme and Wang said the performance of Powerball, which is The Lottery Corporations company’s most popular game, was adequately reflected in TLC’s stock price.
That share price closed at $4.97 on Tuesday, down about 1.8 percent over the past year and not much more than when the company was spun off from Tabcorp in 2022.
Daily Mail Australia has contacted Lottery Corporation for comment.