Virginia is one of the more recent US states to have launched an iLottery, but its online sales already exceed the retail channel. The Virginia Lottery’s preliminary numbers for fiscal year 2024 indicate $5.52 billion in total sales for fiscal year 2024. Although it has not yet released its annual report, the Lottery Post reports that over $3 billion of that came through from online sales, citing Lottery spokesperson John Hagerty.
That means roughly 55% of the money collected as wagers by the Virginia Lottery from July 1, 2022, to June 30, 2023, came from the online channel. Hagerty told the Lottery Post that it’s the first time a US lottery has seen online sales surpass retail sales.
It’s certainly the first time a state has reported such numbers. However, due to reporting differences between states, Bonus cannot fully verify the claim. Most other lotteries report gross revenue—sales minus payouts—rather than raw sales figures, making an exact apples-to-apples comparison with Virginia impossible.
Virginia launched its iLottery in 2021, making it the seventh in the US with a full suite of online options, including e-Instants. Since then, North Carolina has followed suit, and Kansas intends to join the club next year.
Online lottery sales in Virginia grew by about 70% annually for the first two years and by 40% from fiscal year 2023 to 2024. Retail sales have been almost flat over the same period, hovering between $2.4 billion and $2.5 billion annually.
The Difference Between Lottery Sales and Revenue
In most parts of the gambling industry, standard practice is to report gross gaming revenue because it reflects the amount of money that actually changed hands. Lottery sales figures are equivalent to wagers in casino gaming or handle for a sportsbook. Although those figures can sometimes provide helpful insight—particularly for sports betting, where the hold rate can vary widely from month to month—they can also be slightly misleading.
For one thing, re-wagered money gets counted multiple times. For instance, if a player buys a $2 scratch ticket, wins their money back, and immediately uses it for another ticket, that equals $4 in sales but only $2 in revenue—even though the outcome is the same as if the player had lost on the first play.
When it comes to comparing online and retail activity, the more serious issue is that there’s a substantial difference in typical return-to-player (RTP) values for these channels. Draw lotteries often return only around 50%, while scratch tickets might return 70% or so. Conversely, online instants play more quickly than physical scratch tickets and need to return more to provide good entertainment value for the player’s money. Because of that, many of these products have RTPs of close to 90%, almost like slots.
In 2023, North Carolina, which reports both sales figures and prize money, saw $4.34 billion in retail sales and paid out $2.86 billion in prizes through that channel. That equates to an aggregate retail RTP of 65.9% and $1.48 billion in gross revenue.
If we assume a similar retail RTP for Virginia and 90% for its online instants, then despite parity in sales, the online channel probably accounts for only about 15% of revenue.
Online Lottery Revenue Across the US
Online lotteries began appearing in the US in 2012, with Georgia and Illinois being the early adopters. In most states where they’re available, they’ve been growing rapidly and consistently. The main exception to the growth is Michigan. There, online instants seem to have been suffering from competition with Michigan online casinos, which launched in 2021.
Despite the pace of growth, online lotteries still play second fiddle to retail sales. If the growth continues, online lottery products could begin to rival their traditional counterparts within a decade. However, other states still show less than 10% of gross lottery revenue from the online channel.
If any jurisdiction might have beaten Virginia to a 50/50 split in sales, it’s Kentucky. Its longstanding online lottery hit $394 million in revenue for fiscal year 2023, or 21.4% of the total for the lottery. Depending on RTP, that could easily equate to more than 50% of sales.
Another contender is Washington, DC, which launched its online lottery around the same time in 2021. Its iLottery reached 12.3% of total lottery revenue (excluding sports betting) in fiscal year 2023. It probably hasn’t reached sales parity yet, but it might be getting close.
Here’s a comparison of fiscal year 2023 lottery revenue in states with iLotteries. Note that Georgia, like Virginia, reports sales. Revenue for those two states is an estimate based on the assumption of 65% retail and 90% online RTP.
| Online ($M) | Retail ($M) | Online % | |
|---|---|---|---|
| MI | 183.5 | 4755.6 | 3.9% |
| GA* | 58.16 | 1944.39 | 3.0% |
| KY | 394 | 1447 | 27.2% |
| VA* | 219.23 | 846.895 | 25.9% |
| NH | 37.5 | 510.5 | 7.3% |
| RI | 12.6 | 303.7 | 4.1% |
| DC | 27.2 | 194 | 14.0% |
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