The Delaware Lottery is run by the Delaware Lottery Office, which operates under the supervision of the Delaware Secretary of Finance. The Lottery Office oversees all aspects of the state lottery, including game development, marketing, sales, drawings, prize payments, and more. While the lottery contributes revenue to the state’s General Fund, it operates as an enterprise fund, meaning the office is expected to be self-sustaining through lottery ticket sales and other earned revenue.
History of the Delaware Lottery
The Delaware Lottery was established in 1974 after the state legislature passed the Delaware Lottery Act. This act created the Lottery Office within the Department of Finance and gave it jurisdiction over implementing and regulating a statewide lottery. The goal was to generate additional revenue for Delaware’s General Fund without imposing new taxes. Delaware was the second state in the nation to implement a lottery following New Hampshire in 1964.
The Delaware Lottery sold its first ticket on May 31, 1975. The first game was a weekly draw game called Delaware Lotto. Players picked 6 numbers from a field of 40 for a chance to win a jackpot starting at $50,000. This game evolved through several name changes and format tweaks over the years, becoming Lucky for Life in 2013 with drawings now held twice a week.
In 1976, the lottery introduced its first instant scratch-off games, providing players with immediate gratification compared to the delayed results of draw games. These $1 tickets, the cost of which has since increased, proved extremely popular and now account for over 60% of the Delaware Lottery’s revenue.
Several other draw games were added to the lottery’s portfolio over the next few decades, such as Play 3 and Play 4 in 1979 and Multi-Win Lotto in 2010. Mega Millions and Powerball, the two biggest multi-state jackpot games, were both added in 2010. Keno, a fast-paced number draw game, launched in 2013.
In 1997, the Delaware Lottery began offering video lottery through slot machines controlled by the state lottery at licensed video lottery agents. Table games were later added in 2010 after legislation permitted traditional casino games like blackjack, roulette, craps and more alongside the existing slots. The addition of casino-style gaming under the lottery’s oversight significantly increased revenues.
Over its history spanning nearly 50 years, the Delaware Lottery has grown tremendously and now offers a wide range of lottery, keno and casino games. Its contributions to the state budget have also increased and topped $250 million for the first time in 2020.
Delaware Lottery Office Organizational Structure
The Delaware Lottery Office is overseen by a Director appointed by the Governor and confirmed by the State Senate. This individual serves as the chief executive officer managing all aspects of lottery operations. Since its inception, the Lottery Office has had just 7 directors, with the current director being Gregory Karle, who was appointed in 2015.
Reporting to the Director is a Deputy Director, who assists with administrative and operational duties. There are also several divisions and departments within the Lottery Office:
- Administration – Handles human resources, purchasing, facilities management, budgeting, accounting, information services, and warehouse/inventory control
- Security – Oversees security measures and investigations
- Sales & Marketing – Manages sales initiatives, retailer relations, and marketing/advertising efforts
- Product Development – Designs and launches new lottery games
- Finance – Processes claims, handles prize payments, manages cash flow and revenue accounting
- Gaming Operations – Manages gaming systems and equipment, conducts drawings, and operates video lottery facilities
In total, the Delaware Lottery Office employs over 200 people in full-time staff. The lottery also utilizes contracted services for gaming system management, drawing broadcast production, instant game printing, advertising, and consulting.
Delaware Lottery Commission
Oversight of the Lottery Office is provided by the Delaware Lottery Commission. This group meets monthly to review the lottery’s operations and financial performance. The commission serves to advise and make recommendations to the Director regarding policies, budgets, game rules, and more.
The Lottery Commission consists of 7 members appointed by the Governor for 3 year terms. No more than 4 members can be of the same political party. Members include:
- A chairperson
- The Secretary of Finance
- The State Treasurer
- 4 public members
Having both the Secretary of Finance and the State Treasurer on the commission allows oversight from key officials managing the state’s finances. The 4 public members represent consumer interests and provide general business, legal, and community insights.
Where Lottery Revenue Goes
As an enterprise fund, the Delaware Lottery operates using the revenue it generates from game sales, rather than tax dollars. After paying prizes and funding operations, the profit generated by the lottery is transferred to the state’s General Fund.
Each fiscal year, the Lottery Office estimates the profit projection for the upcoming year. This becomes the “net proceeds target” they are expected to meet or exceed. By law, the target profit level is set at a minimum of 30% of total estimated revenue. In recent years, the Delaware Lottery has achieved profit margins of 40-45% of sales, exceeding its mandated targets.
These net proceeds from the lottery represent a significant source of revenue for Delaware. The funds go directly into the General Fund managed by legislators. In FY 2020, the lottery contributed $253 million, its highest total ever. Lottery proceeds typically make up about 4% of the state’s General Fund revenue each year.
With these funds, the state Budget Appropriations Bill directs spending across various public services. Key initiatives supported via Delaware Lottery funds include:
- Public education
- Health and social services
- Public safety and criminal justice
- Natural resources, environment, and agriculture
- State employee and retiree benefits
Beyond the General Fund, a small portion of lottery revenue goes toward compulsive and problem gambling education, treatment, and prevention programs managed by the Delaware Department of Health and Social Services.
Without revenue generated by the Lottery Office, the state would need to find funds through other means like increased taxes or spending cuts. The lottery provides a voluntary way for consumers to contribute funds for public services in Delaware.
Lottery Games Offered in Delaware
The Delaware Lottery offers a wide variety of lottery and gaming products for players to choose from. These include traditional draw-style lotteries, instant win scratch tickets, and video lottery gaming.
Draw Games
Draw games involve purchasing a ticket with number selections and then waiting for scheduled drawings to determine winners. Delaware offers several multi-state and in-state draw games.
- Multi-Win Lotto – A twice weekly draw game exclusive to Delaware. Pick 6 of 49 numbers for a shot at a jackpot starting at $75,000.
- Powerball – The big multi-state game played across 45 states, D.C., Puerto Rico, and the Virgin Islands. Features giant jackpots starting at $20 million.
- Mega Millions – Another huge multi-state jackpot game offering minimum jackpots of $20 million and played in 45 states plus D.C. and the Virgin Islands.
- Lucky for Life – A game with a top prize of $1,000 per day for life. Offered in 25 states and D.C.
- Lotto America – The newest multi-state game added in November 2017. Features jackpots starting at $2 million.
- Play 3 – Pick a 3 digit number and match it in exact order to the draw. Win up to $500.
- Play 4 – Same as Play 3 but pick a 4 digit number instead.
- Fireball – An add-on to Play 3 and Play 4 involving a separate red ball number draw.
Instant Games
Instant win scratch tickets offer the opportunity to discover prizes immediately after purchase by scratching the play area. Ticket prices range from $1 to $25, with top prizes up to $300,000. New games are continuously introduced offering varied themes and ways to play.
Video Lottery
The Delaware Lottery also oversees video lottery provided at licensed gaming facilities throughout the state. There are over 5,000 video gaming machines offering slots, video poker, and electronic table games.
Three racetrack casinos operate under video lottery licenses – Delaware Park, Dover Downs, and Harrington Raceway. Several other video lottery agents operate gaming venues with no live racing. The state imposes a cap limiting the maximum number of total machines statewide to under 7,000.
Retail Sales Network
The Delaware Lottery utilizes an extensive network of over 300 lottery retailers to provide convenient access to players across the state. Retailers include gas stations, convenience stores, supermarkets, liquor stores, pharmacies and other mass retailers.
Retailers receive commissions starting at 5% on draw game sales and 6% on scratch ticket sales. They also get bonuses for selling jackpot-winning tickets for games like Powerball and Mega Millions.
To become a lottery retailer, businesses must apply for a license issued by the Lottery Office. Applicants undergo background checks and investigations to ensure compliance with all legal and ethical sales practices.
Advertising and Promotions
In order to generate sales and maintain public interest, the Delaware Lottery engages in advertising and promotional campaigns. Their efforts include:
- Television, radio, print, and digital advertising
- Point-of-sale displays and promotional materials at retail locations
- Special events like second chance prize giveaways and contests
- Community outreach booths at fairs, festivals, and other public venues
- Social media engagement on Facebook, Twitter, Instagram, YouTube, and more
Certain conditions regulate lottery advertising. For example, ads cannot target underage individuals or explicitly encourage people to spend their rent or grocery money on lottery games. Ads also cannot overemphasize the odds of winning or suggest lottery games provide a way to achieve financial security.
Responsible Gaming
While most people play the lottery responsibly for entertainment, some individuals can develop problems with excessive gambling. The Delaware Lottery takes several measures to promote responsible play and provide addiction help services.
A portion of the Delaware Lottery’s revenue funds compulsive and problem gambling programs administered by the Delaware Department of Health and Social Services. These programs include a 24/7 help hotline, outpatient counseling centers, residential treatment, prevention education, and public awareness campaigns.
The Lottery Office partners with the Delaware Council on Gambling Problems to promote March as Problem Gambling Awareness Month. This features community outreach events, social media messaging, help hotline promotion, and the #BudgetBeforeBetting hashtag campaign.
The lottery also advertises the 1-888-850-4357 Gambling Help Line number on all its printed materials and promotes healthy play tips on its website and social channels. Employees receive training on identifying signs of problem gambling to handle such situations appropriately.
Financial Performance and Contributions
The Delaware Lottery has achieved remarkable growth over its 47 year history. In its first year, the lottery generated just $15 million in revenue. For fiscal year 2022 ending June 30, total revenue reached $793 million. The lottery has gone from around 70 employees to over 200 and seen its contributions to the state jump from $3 million originally to over $250 million recently.
Looking just at the past decade, the Delaware Lottery has averaged right around $700 million in annual revenue. Here is a breakdown of sales performance over the past 10 years:
| Fiscal Year | Total Revenue |
|---|---|
| 2022 | $793 million |
| 2021 | $673 million |
| 2020 | $726 million |
| 2019 | $667 million |
| 2018 | $667 million |
| 2017 | $667 million |
| 2016 | $667 million |
| 2015 | $667 million |
| 2014 | $667 million |
| 2013 | $667 million |
As shown, revenue dipped in FY 2021 likely due to the COVID-19 pandemic limiting retail lottery sales. But it rebounded to a new high in 2022. Over this period, roughly 61-62% of sales came from lottery games, while 38-39% came from video lottery gaming.
Of the revenues generated, approximately 51-53% is paid back out as prize money. Meanwhile, around 8-10% covers operating expenses, including retailer commissions and administrative costs. The remaining net profit is transferred to the General Fund.
Here is a look at the Delaware Lottery’s total contributions to the state’s General Fund over the past decade:
| Fiscal Year | Net Profit Contribution |
|---|---|
| 2022 | $253 million |
| 2021 | $227 million |
| 2020 | $252 million |
| 2019 | $249 million |
| 2018 | $242 million |
| 2017 | $237 million |
| 2016 | $229 million |
| 2015 | $223 million |
| 2014 | $204 million |
| 2013 | $198 million |
These contributions make the Delaware Lottery a crucial source of funding for public services benefitting state residents.
Key Facts About the Delaware Lottery
In summary, here are some key facts to know about the Delaware Lottery:
- Established in 1974 as the second U.S. state lottery
- Overseen by the Director of the state Lottery Office
- Features online draw games, instant scratch tickets, and video lottery
- Operates over 5,000 video gaming machines at licensed facilities
- Employs around 200 staff across various divisions and departments
- Oversight provided by 7 member Lottery Commission
- Generates 40-45% profit margin contributing over $250 million to state budget
- Features extensive retailer network with over 300 locations statewide
- Conducts responsible gaming programs and funds problem gambling services
- Has grown to $793 million in annual revenue
Future Outlook
Looking ahead, the Delaware Lottery will likely continue innovating to attract players by offering new games. Recent additions include multi-state draw games Cash4Life and Lotto America. New instant game themes and prize structures drive ongoing scratch ticket sales. The lottery also continues enhancing its mobile apps and exploring cashless payment options.
Video lottery will remain a key source of revenue through slot machine upgrades, electronic table game expansion, and improved loyalty programs at Delaware’s casinos. Sports betting and iGaming could also grow as online wagering options if enabled through legislation.
While facing competition from neighboring state lotteries and other gaming opportunities, the Delaware Lottery seems well-positioned to keep generating robust returns through its diversified mix of lottery products and casino-style gaming. Conservative budgeting should allow its net profit contributions to keep benefiting vital state services.
Conclusion
For nearly 50 years, the Delaware Lottery has successfully provided residents with fun games while responsibly generating billions in profit for public services. Under direction from the Lottery Office, oversight from the Lottery Commission, and the efforts of its employees and retailers, the Delaware Lottery will likely continue its quality operations and fiscal diligence. With video lottery, multi-state jackpots, scratch tickets, and more in its portfolio, the lottery seems poised to keep benefitting the state for decades to come through its contributions to education, health care, public safety, environmental programs, and more.