By: Chris Shaban, Managing Director iLottery, Aristocrat Interactive
The U.S. lottery industry continues to be an amazing engine of sustainable revenue, contributing $30 billion in FY24 to good causes across the U.S. While recent performance has seen some fluctuations – with total sales through the first three quarters of fiscal year 2025 estimated to be down slightly year-over-year but still up 6% over the past five years – the overall trajectory continues to be strong.
The recent billion-dollar Powerball jackpot run is a reminder of the sector’s enduring appeal. However, the dip – even if only slight – underscores an opportunity for lotteries to reconsider how they build on their foundation, ensuring they can continue to grow and strengthen their role in supporting our communities.
Evolving Market Dynamics
Retail Instants and national jackpot games like Powerball and Mega Millions have long been the backbone of U.S. lottery sales. Their performance has been remarkable, accounting for three quarters of the industry’s revenue in 2024. However, as the industry knows, these categories can naturally ebb and flow. In the first three quarters of fiscal year 2025, for example, sales of Instants eased by 1% year-over-year, while Powerball and Mega Millions dropped 42% due to fewer jackpot rollovers as compared to the prior two fiscal years.
At the same time, the broader gaming landscape is changing rapidly. Regulated gaming revenues, including casinos, sports betting, and iGaming, grew 13% between 2020 and 2023. Sports betting has also surged nearly 25% to $13.8 billion, driven by mobile adoption. Similarly, iGaming grew nearly 29% to $8.4 billion across just seven states. This evolution is less a challenge to lotteries than it is a signal of shifting consumer expectations. Today’s consumers expect digital-first experiences which are fast, convenient, personalized, and mobile-enabled.
For the industry, these shifts are part of the natural cycle. However, they also represent an important opportunity for lotteries to extend their reach and deliver richer, more engaging digital experiences that build on the strength of traditional retail.
iLottery: Meeting the Moment
Encouragingly though, lotteries that have been permitted to establish iLottery programs are already seeing strong results, growing 24% in the past five years.
This is even more striking when measured on a per capita basis. Through Q3 2025, sales in iLottery states are estimated to reach $516 per capita for the full fiscal year, nearly double the $274 per capita recorded in non-iLottery states. Research also suggests that eInstant growth is helping to offset volatility in Draw games, with double-digit gains across most markets where available.
What explains this durability? Simply put, iLottery allows lotteries to meet consumers where they are: online. Digital platforms and solutions offer convenience, flexibility, engaging game mechanics, and accessibility, complementing the traditional experience. This evolved experience allows lotteries to extend current player engagement such as leveraging Powerball and Mega Millions for player acquisition beyond the jackpot roll and connect with new players who might otherwise drift toward sports betting or online casinos, drawing them back through innovative digital channels.
Proven Leadership in Digital Growth
As recent data has demonstrated, the success of iLottery depends on more than just digitizing paper tickets. Among iLottery states, those fueled by Aristocrat Interactive’s solution are consistently outperforming the rest of the field. Over the past five fiscal years, lotteries with Aristocrat Interactive’s iLottery platform grew 46% compared to 4% for other vendors, delivering overall per capita performance more than 30% higher.
This is the result of more than just industry-leading technology. At Aristocrat Interactive, we are here to support lotteries on their digital journey by providing battle-tested platforms, a constant pipeline of innovative content, the expertise of a highly experienced team, and the data-driven insights necessary to help lotteries grow responsibly and sustainably.
As demonstrated by our recent milestone contracts with the Massachusetts State Lottery Commission and the Michigan Lottery, our focus continues to be straightforward—help states keep pace with changing consumer expectations and lead the way in the future of lottery play.
Future-Proofing an Industry That Is Ever-Changing
The U.S. lottery industry has an incredible opportunity to build on its own history of innovation, by tapping into a revenue stream that underpins vital public programs. Other industries have already embraced digital transformation: brick and mortar retailers have spearheaded the shift to online shopping, transport has moved from only hailing a taxi to rideshare apps, and banking evolved from paper statements to mobile apps. Now with iLottery, states are building richer player databases, appealing to today’s generation, and diversifying revenue streams to complement traditional lottery experiences.
We recognize that Instants and jackpots will always be vital cornerstones of the lottery business. By pairing these critical foundations with digital offerings, lotteries can create more consistent growth and cross-channel engagement. Because omnichannel programs introduce new players to the category, retail sales stand to benefit from them as well, creating a true win-win for lotteries and the communities they serve.
The results already speak for themselves: lotteries with iLottery are innovating and delivering sustained growth, even in the face of broader market shifts. When policymakers commit to digital transformation, states can significantly increase the likelihood that lottery revenues remain strong, relevant, and future proof.
Aristocrat Interactive stands ready to help states succeed in this transition with proven platforms, innovative games, and unmatched expertise. Together, we can provide opportunities to enhance lotteries which continue to deliver for players, for governments, and for consumers.
If you would like to discuss some exciting new possibilities for your lottery, please reach out to one of our experienced industry team members.
LaFleur’s Sales Reports: Gross sales per capita for both retail and iLottery is from reported data in La Fleur’s FY21-25 Sales Reports. Full years sales for FY25 are estimated based on performance through first three quarters. iLottery is estimated based on average game payouts.
US State Lotteries & Eilers & Krejcik Gaming, LLC, U.S. iLottery Tracker, Quarter 2, 2025.
State of the States 2025: The AGA Survey of the Commercial Casino Industry. American Gaming Association, 2025