The Lottery Strategy 2026: What Australian retailers Must Know About Digital and Commissions
If you run a lottery outlet, you know that the lottery brings in a lot of foot traffic. Like most agency work, it has pros and cons. On the one hand, it gives you a lot of business, but on the other hand, they have you on the short end of the stick. Today, a shopper who buys a Powerball ticket often grabs a card, a magazine, or a cold drink at the same time.
As it is very important to many of my clients, I listened to the Lottery Corporation Investor Day talk on YouTube , and while listening, I read the INVESTOR DAY PRESENTATION. This presentation filled many of the gaps in the talk.
The talk was a bit vague, but the presentation was good. If you are interested, I suggest looking through the presentation and missing the talk.
Here are my thoughts on what was said.
The most important point was that the lottery recognises the importance of retail (54% of draw lottery sales in 2025), but they also want to use your shop to attract new digital customers. The clear long-term plan strongly favours digital over retail. The company says digital is its main growth engine and will own the customer relationship going forward. For example, a customer might buy their first ticket at your counter, but the lottery wants them to buy all future tickets through its app. If the lottery app is used, your shop loses that sale and, more importantly, the extra impulse sales that go with it.
Also, the profit gap between digital and retail is massive. The lottery's digital operator margin is 20.5 percent, while the retail margin is only 8.2 percent. Clearly, the lottery has a strong financial incentive to move players online, where it can make more profit.
There is little there about industry consultation. The lotto agents will be told what to do and expected to do it. Again, this is a common problem with agency work.
Key Takeaways
- The lottery's 2026 strategy turns retail into a tool to attract new digital customers.
- The lottery says registered customers are worth about 2 times as much as unregistered customers.
- The lottery's digital profit margin is 20.5 percent, while the retail margin is only 8.2 percent.
- The lottery estimates that about 4.3 million unregistered retail lottery customers remain available to convert as of FY25.
- Each 1 percent lift in digital share is worth about $6 million in profit for the lottery.
- Lottery retailer pay is expected to change, but talks with industry groups will take six to twelve months.
- Australian retailers with strong POS data can measure the true basket value of lottery traffic to prepare for new pay talks.
Points
What I did was list the points as they went through it, identify the ones relevant to retailers, and put them in the following order.
Pros
Why the lottery Still Needs Retailers
The lottery still needs the retail network to succeed. The company says retailers remain long-term partners because digital-only rivals cannot copy a massive physical network. For example, a pure online app cannot give customers the friendly face and local trust that your lottery outlet provides every day.
The money is still very real for them from shops today. Retailers and venues earned about $0.7 billion in Australian newsagent lottery commissions in FY25. Those commission payments are paying the rent for many SMB businesses across the country.
Moreover, the lottery's license base is much stronger now. The Victorian lottery license was recently extended to 2068, providing long-term safety across the whole network. A longer license means you can safely spend more money on lotto.
They see the lottery brands build deep trust in the community. The lottery calls its games "permission assets" because they give the company and its retailers the social trust to operate safely. For example, customers trust your shop more because you sell familiar, safe games like Saturday Lotto.
Importantly, retail remains the primary starting point for players. The lottery admits that physical shops provide a highly visible presence in towns and suburbs. A customer driving past your big lottery sign is often reminded to walk in and buy a ticket.
New Tools and Future Plans
The new digital tools will actually help your staff work faster. In-store tools like digital prize claiming and ticket scanning reduce the cash you have to handle. For example, a customer claiming a prize digitally means your staff does not have to count out large amounts of cash from the till.
The lottery admits that the old pay model must evolve. Management openly stated that as retail becomes a place to find new digital customers, the remuneration for lottery retailers needs to change. They know the old pay model does not fit the new job they want you to do. I am dubious here, as this was promised before, and I did not see much progress from that proposal.
The lottery promises to consult with retailers before making major pay changes. The company says the next six to twelve months will involve deep talks with retailer groups. This means you have time to look at your newsagent POS data before the final rules are set.
They promise that highly productive shops could win big in the future. The lottery emphasised "quality over quantity," meaning top shops could become brand ambassadors. For example, if your shop signs up lots of digital players, you might receive special rewards or extra terminal support.
The lottery is still investing in physical games to keep them exciting. The company is planning a Set for Life refresh for September 2026. Fresh games give your regular customers a fun reason to keep coming back to your counter. By refreshing the Everyday Fun games, the lottery hopes to keep sales strong even when jackpots are small. For instance, better instant scratch games can keep your daily traffic steady year-round.
Cons
How Digital Changes Your Shop's Role
The role of your shop they want completely changed. The lottery is explicitly shifting retail from a sales channel to a tool for finding digital customers. They see your job as slowly changing from simply selling tickets to finding new app users for the lottery. This is actually what other online lotteries, such as Lottery Office, once offered retailers. This is now the main engine for the company's future. The lottery says digital is its primary growth engine, meaning the long-term focus is no longer on growing over-the-counter sales. For example, the lottery will spend more money improving its app than it will on improving your terminal.
Once digital, the lottery will own the long-term customer relationship. The lottery says digital will handle customer retention and keep players loyal between draws. If a customer buys their first ticket from you, the lottery will use email and in-app alerts to encourage them to buy their next ticket online.
Finally, registered players are worth more money. Registered lottery customers are worth about 2 times as much as unregistered customers. This is exactly why simple counter sales are no longer the lottery's main goal.
New Tools Push Players Away From the Counter
QR codes can easily shift the relationship away from your shop. QR codes on paper tickets make it very easy for players to register for the lottery. However, scanning that code creates a direct link that lets the customer play on their phone next time, without visiting you.
Digital wallets bypass the shop completely. Digital prize claiming reduces your cash handling, but it also helps customers build online wallets. For example, many customers who claim a $50 prize in their app wallet will likely spend that $50 in the app, not in your shop.
Sign-up rewards are designed to accelerate this digital shift. The lottery is considering retailer rewards to encourage your staff to collect customer details. This effectively asks you to help move your own regular shoppers online.
Greater use of dynamic digital signage takes control away from the retailer. Digital screens aim to reduce the need for printed posters and to clean up the shop. However, this gives the lottery central control over exactly what gets promoted in your shop at any given time.
Your terminal is not guaranteed anymore. The lottery says that having more outlets does not always translate into higher sales, so they are reviewing low-yield shops. If your shop only sells a few tickets a week, you might lose your lottery terminal similarly if you do not drive enough digital sign-ups.
Talks about how retailers get paid are still months away from finishing, yet you are being asked to do the conversion work right now without a final, fair pay deal in place.
The App Replaces the Shop Visit
The digital roadmap is built to keep players in the app. Upgrades like "The Reveal" make checking results on a phone much more fun and exciting. This pulls the habit of checking tickets away from your physical shop scanner.
The Auto Play feature is concerning; it is designed as a recurring revenue engine. This means a player's ticket is automatically purchased each week, so the customer never needs to walk into your shop again to buy one.
Social Play will allow the lottery to run syndicates completely through the mobile app. This pulls large office groups and social play away from the traditional physical counter.
What they are aiming for in the app is the 18- to 34-year-old demographic. This is how the lottery sees these people want to play. It will be a full entertainment destination.
Discussion
The lottery strategy 2026 is not an attack on retail. They see the shop is creating trust, reach, and easy access. At the same time, the lottery desperately wants to own the registered identity and the digital repeat revenue.
If lotteries get twice as much money, then registration is no longer just a harmless administrative task at the till. It is a commercial negotiation about who gets paid for creating long-term value.
Importantly, do not simply reject every new digital tool out of fear. Many of these digital upgrades will genuinely reduce friction and speed up the line during a busy jackpot draw.
Think I missed something important. Have anything to discuss, let me know
Written by:
Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.
