December 17, 2020
Page Two
• Overall retailer compensation in FY89 was less than $21 million; in FY20, overall
retailer compensation exceeded $120 million, or nearly $23,500 on average per
location. Approximately 5,200 lottery retail locations earned over $109 million in
sales commissions and an additional $10.7 million in cashing bonuses.
• Virginia’s effective overall compensation rate currently stands at approximately 5.6%.
Among adjoining jurisdictions, Virginia, Kentucky, and Washington D.C. each provide
5% sales commission rates. Maryland’s selling commission is set at 5.5%, and West
Virginia and North Carolina each offer 7% sales commissions. Virginia, West Virginia,
and Kentucky also provide 1% cashing bonuses, Maryland offers a 3% cashing bonus
to retailers, Washington D.C. offers a hybrid cashing bonus of between 3% and 4%,
and North Carolina does not provide cashing bonuses.
• For scratch tickets, which comprise more than half of total lottery retail sales, retailer
earnings-per-transaction have increased 400%, from $0.05 in FY89 to $0.25 per
transaction in FY20. Since its founding, the Virginia Lottery has broadened its
product portfolio to include a variety of games at a variety of price points and prize
structures.
• The Lottery has introduced significant technological improvements which have, in
effect, automated many of the time-consuming audit and accounting obligations
initially experienced by retailers and their employees, and improved overall
efficiencies related to selling and servicing lottery products. This includes more than
2,000 vending machines at retail, for which host retailers continue to earn full 5%
sales commission and 1% cashing bonuses. Also, each retail location has a self-
service “ticket checker” for players to use to determine the winning value of tickets,
removing a time-consuming function historically required of retailer employees.
• Virginia’s statute authorizes lottery purchases by cash and debit card only, and
expressly prohibits purchases by credit cards. Beginning in 2018, the Lottery began
accepting cashless (debit card) payments through its vending machines, and cashless
payments currently represent about 10% of vending sales. The Lottery -- and not the
retailer -- pays the 1.5% banking transaction fee on each debit transaction at vending,
or approximately $1 million in transaction fees per year.