Added Incentives

This month’s retail feature covers retailer incentive programs, which are designed to encourage best practices for selling lottery products.

By Patricia McQueen

Published April 22, 2025

Selling lottery tickets can be a lucrative source of revenue for retailers of all sizes. In total, U.S. lotteries’ retail partners received almost $6.3 billion in retail commissions and incentives for traditional lottery products in FY24, an average of 6.2% of sales. Canadian lottery retailers received more than C$680 million in commissions and incentives, an average of about 6.4% of sales.

Standard commission rates, cashing and selling bonuses for U.S and Canadian lotteries are summarized in a chart available on the NASPL Matrix (login is required). Beyond these substantial revenues, however, many lotteries also offer performance-based retailer incentive programs rewarding best practices. These go a long way towards increasing sales in retail locations.

Incentive programs may be ongoing, with the same basic structure year after year, or they may be short-term programs based on specific games or price points. They may simply offer a special commission rate on a specific product. And depending on the lottery, these programs may reward retailers with promotional tickets, prizes or cash bonuses.

It’s clear that retailer incentives can take any number of forms, but the common goal is to ensure that lottery games reach as many consumers as possible – beyond already dedicated lottery players. The programs included here are a sampling of performance-based incentives offered by lotteries based on responses to our request; not all of the lotteries that offer incentive programs are included.

 ADVERTISEMENT

Short-Term Incentives and Contests

A number of lotteries offer short-term incentives, often centered around specific games or group of games (like during the holiday season or a family of games). They may simply offer an extra commission during a promotional period, or they may be structured to encourage sales growth based on a previous period.

The Arizona Lottery prioritizes incentive programs that drive engagement, reward performance, and enhance the player experience. Recent initiatives include:

Retailer sales and activation contests:

Holiday Activation Contest: Retailers who activated all holiday tickets within 72 hours were entered into a $100 gift card drawing. 115 winners were selected statewide.

Sales Increase Contest: The top two retailers in each of Arizona's 23 territories with the highest sales growth (both percentage and dollar increase) won $100 gift cards.

February Game Launch Activation Contest & Q1-Q2 Sales Increase Contests: These activations reinforced engagement and sales momentum.

Co-Sponsored Promotions & Player Engagement to drive foot traffic in-store:

Circle K Free Gas for a Year: Two lucky Players Club winners received $5,000 in free gas.

Fry’s Holiday Feast: Five winners received $250 each for holiday shopping.

In-Store Activations: To build excitement, we launched retail activations early in Q2 and followed up with a focus on the Monopoly family of games in Q3.

The Massachusetts Lottery periodically offers retailer incentives for activating specified instant ticket books during a designated time period. Most recently, the Lottery ran a Cash Celebration Agent Incentive beginning in January and concluding with a random drawing in March. This incentive accompanied the Scan to Enter Cash Celebration Player Promotion, where players could enter non-winning tickets from six eligible games for a chance to win.

For the agent incentive, every book of instant tickets from the eligible games that were activated between January 21 and March 14 earned the activating agent one entry into the drawing. Winning agents were randomly selected among all the entries, and agents were limited to one prize only. The Lottery awarded a total of $125,000 to 617 retailers, with awards ranging from $100 to $5,000.

ADVERTISEMENT

For the past six months, the New Jersey Lottery has had success running monthly performance-based retailer incentives that coincide with draw game initiatives. The April 2025 incentive is based on Mega Millions sales, and functions the same as the upcoming June incentive program focusing on Pick-3 sales. To support that game and to qualify for an incentive payout, an eligible retailer must finish the incentive period ranked as one of the top 25 performing retailers within their territory (there are 60 sales territories plus nine corporate sales territories). Sales ranking will be determined based on total Pick-3 sales. At the end of the period, the top 25 retailers will be placed in a pool where a drawing will occur. The top selling (#1) retailer within each territory will receive 25 entries into the drawing, the #2 retailer within each territory will receive 24 entries, and so on, down to the #25 retailer within each territory, which will receive one entry into the drawing. A random drawing will take place to award three retailers per territory one of three prizes.

The North Carolina Education Lottery knows that its retailer incentive programs have contributed to an overall sales strategy that has helped set sales records every single year of operations. At least one incentive program/promotion is launched each year. The biggest promotion to date is currently wrapping up, centered around the “X The Cash” family of instant games. The five-week Multiply Your Ca$h retailer incentive will award 950 prizes totaling $750,000 to retailers throughout the state, with prize levels of $5,000, $1,000 and $500. That’s an increase of $250,000 and 230 prizes compared to similar past promotions. Retailers must activate at least one pack of each of the Multiplier games included in the promotion (six different X The Cash scratch-offs) to be entered. Retailers that meet or exceed sales goals on these games can receive bonus entries.

“Players enjoy finding these popular games at retail locations across North Carolina,” explains Terri Avery, Chief Sales Officer of the N.C. Education Lottery. “Retailer promotions like this help make sure the players can access their favorite games and rewards retailers who meet or exceed sales goals with cash prizes at the same time.” It is expected that the Multiply Your Ca$h promotion will increase game penetration across all price points in the state by an estimated 11%.”

Historically, the Lottery has offered retailer incentive programs to support a specific price point, a family of games or to celebrate key milestones. “We’re exploring other ways to use incentive to achieve goals with our retail partners,” says Avery. “For example, in March we supported our enhanced Play Smart program by challenging our retail partners to test their Play Smart knowledge for a chance to win a free pack of scratch-off tickets.”

Ontario Lottery and Gaming offers special commission rates for various products from time to time, especially for new game launches, sometimes in the range of 10% to 30%.

While there are common elements to the quarterly incentives offered by the West Virginia Lottery in FY25 (called Five to Thrive 2025 Retailer Incentive Program), the fifth and final step to achieve the bonus varies each quarter. Retailers receive three packs of promotional tickets for completing four steps: activate and load new games within three days of launch for all new game launches each quarter, follow the planogram, keep all equipment up and running and immediately report any issues to the Hotline, and keep bins full at all times. An extra pack of promotional tickets is awarded if the retailer completes a fifth step. For example, this year’s second quarter fifth step was to complete a Mega Millions training course using the Learning Wizard. Smaller retailers with planograms under 12 games have slightly different first and second steps and are awarded two packs of promotional tickets.

The holiday season provides an opportunity to ramp up incentives to maximize the potential of the biggest sales period of the year, although it’s not always about measuring direct sales.

For the Virginia Lottery, a holiday incentive is more about getting into the holiday spirit than directly measuring sales. In the Holiday Point of Purchase Display Incentive, retailers can earn $100 for November and again in December if they place a four- to five-game cube display at the point of purchase and keep it full of holiday games throughout the season. This program not only brightens up the store, it also boosts sales during the festive period.

With more of a sales focus is the Wisconsin Lottery Holiday Bonus incentive. Offered annually, it’s always fun for retailers because it involves the holiday scratch games, and one of the incentives is the popular Wisconsin Lottery ugly sweaters. For the 2024 program, the sweater was designed by a Lottery intern. The goal for this short-term incentive is to sell all holiday price points as soon as the tickets are launched. The Lottery also wanted to maintain or increase the number of retail locations participating compared to the previous year. The retailers were given a choice of two holiday ticket packages to advance order prior to the launch of the tickets.

ADVERTISEMENT

For Package 1, retailers received one entry into a drawing for two Wisconsin Lottery ugly sweaters for every five winning tickets redeemed from the games Winter Winnings, Hoooliday Countdown and Celebrate the Season. The incentive offered 30 winners per territory. For Package 2, retailers received one entry into a drawing for $1,000 for every five winning tickets redeemed from the games Gnome for the Holidays, Candy Cane Crossword, and Gifts Galore.

A total of 3,280 retail locations participated in the 2024 campaign, an increase from 3,263 the previous year. Photos of retailers in Wisconsin Lottery ugly sweaters were used in the monthly newsletter, on social media, and in the daily Players Club email.

Ongoing Incentive Programs

A number of lotteries offer ongoing incentives based on reaching individual sales goals or surpassing lottery-wide sales performance.

An example of the latter is a program offered by the Arizona Lottery to retailers that have been lottery retailers for at least one year. They can earn a 7% commission on lottery sales, more than the standard commission of 6.5%. During each bonus sales period, retailers with a sales performance that exceeds the Lottery’s increase by 5% or more will earn that additional half-percent. For example, if the Lottery achieves a 4% increase in total sales, retailers must achieve 9% or more to receive the bonus.

The 2025 Sales Growth Incentive offered by British Columbia Lottery Corp. provides retailers with a reward for year-over-year sales growth of at least $25,000 (2025 compared to 2024). Sales from all terminals (regular, self-service, lotto express), scratch & win games and pulltabs are included. Retailers must have 12 months of lottery sales as of January 1, 2025, and minimum net lottery sales of $125,000 during the year. Qualifying retailers can earn a lump sum of $500 for sales growth of $25,000 to $49,999; $750 for sales growth of $50,000 to $74,999; $1,000 for sales growth of $75,000 to $99,999; and $1,250 for sales growth of $100,000 and up.

BCLC also offers a Sales Bonus Program based on total sales for a calendar year, with a minimum of $125,000 in sales for a full year. The bonus percentage ranges from 0.50% on annual sales from $125,000 to $199,999 to 2.5% on annual sales of $1.5 million or more

The Colorado Lottery has two ongoing incentives. For the sales goal incentive, if a retailer hits its instant sales goal for a quarter, any sales after achieving that goal are paid double commissions on those sales. To qualify, retailers must activate all new games by the first Friday after new games launch the previous Monday. In addition, each trade style has its own unique qualifiers; for example, a convenience store trade style must carry a minimum of 28 instant games to qualify for bonus. For Colorado’s new game incentive, if a retailer activates all price points within a launch, they receive a $5 per game bonus on the first pack only.

ADVERTISEMENT

There are four parts to the FY25 incentive program offered by the Kentucky Lottery, with the overall goal of providing financial incentives beyond standard commissions and bonuses for those retailers achieving outstanding sales performance. It’s all about motivating retailers to promote and sell lottery tickets throughout the year and encouraging best practices such as activation of new instant games within a designated period, compliance with inventory display program, maintaining acceptable out of stock levels and displaying lottery point of sales materials.

The four parts of Kentucky’s program include:

Exceed Quarterly Scratch-off Goal, where retailers can earn up to a 1.5% bonus per quarter.

Excellence in Execution, where retailers can earn up to $3,600 per quarter. To qualify, retailers must achieve 100% of the activation goal for all games launched each quarter and achieve success markers (such as an average of 5% of less out of stocks in dispensers and vending equipment, 100% compliance with planograms, and placement of at least one game-specific POS item) at least three times each quarter.

Best of the Best, for retailers exceeding $5,750 in weekly sales of instant games. To earn a bonus of up to $3,000 per quarter, retailers must carry a minimum of 24 games at the counter and a scratch-off vending machine and achieve the Excellence in Execution markers.

Bonus Out of Stock Incentive, providing a bonus of up to $500 per quarter for achieving quarterly vending machine out of stock averages of 4.5% and under, based on system reports. To qualify, retailers also need to achieve the Excellence in Execution markers.

“The Kentucky Lottery would not have the success we do each year without the important role of our retailers,” says President and Chief Executive Officer Mary Harville. “Each retailer is a valued member of our team, and their success is our success, which is why we have such a robust incentive program for them.”

The Michigan Lottery offers retailers the opportunity to earn an extra 1% of qualified sales commission if they meet and exceed sales projections based off the previous year’s sales. All retailers are eligible to participate in the printed product incentive program (for instant games and pulltabs), and there is a separate incentive program specifically for Club Keno retailers, based on the sales of non-jackpot draw games.

There is also a Cashless Bonus incentive, providing retailers an additional 1% of qualified sales commission if they accept credit and debit cards for lottery purchases.

These incentives motivates retailers to place lottery products in high traffic and highly visible locations, because the additional earnings are endless.

The incentive programs offered by the Montana Lottery on traditional lottery products focus on instant games and Treasure Play (Montana’s version of Fast Play). For instant games, each retailer has its own quarterly sales goal based on previous-year sales. Current year sales are compared to that base year sales, and the incentive is determined from the difference. It’s a complicated system and it depends on each sales agent’s capacity, so the bonus potential varies from agent to agent.

For Treasure Play, if a retailer meets the minimum year-over-year quarterly growth requirement and has achieved sales greater than the minimum quarterly sales requirement, then the retailer is eligible to receive a bonus check for a percentage of the quarterly growth. Retailer bonus checks are capped at 5% of their quarterly Treasure Play revenue.

New Hampshire Lottery retailers have the opportunity to earn an additional 5% of any increased ticket sales (excluding Keno) when comparing current quarter sales vs. the same quarter the previous year. There is also a monthly retailer contest that awards one book of $5 tickets to a retailer in every territory in the state (13 territories). To be automatically entered into this contest, retailers must quickly activate their initial shipment of games, add them to their merchandiser, and encourage the sale and cashing of the new games within 24 hours. The goal of this program is to motivate retailers to get the new games out for sale in a timely manner.

Additionally, 4.5% of iLottery net gaming revenue is divided among all retailers who sell scratch tickets in a given quarter. Each retailer receives the same percentage of that 4.5% of revenue as their percentage of the Lottery’s total instant ticket revenue.

The Ohio Lottery launched its Retailer Incentive Program in 2017. Over a seven-year period (31 quarters completed as of March 29, 2025), retailers have generated $3.09 billion in additional sales, earning $109.6 million in incentive bonuses on top of their commissions.

Retailers sign a yearly agreement to participate in the incentive program, which offers a two-tier bonus system, based on a percentage of sales increase from the same quarter the previous year. Retailers agree to support best practices, including the prompt activation and display of new scratch-offs, to qualify for the quarterly bonus.

Over the years, there has been significant improvement in timely scratch-off activation. After the program started, approximately 60% of retailers activated one book of each new game released within the first five days of game launch. Today, activation has risen to almost 85% by the Friday of delivery week. Buy-in has grown as retailers have seen the program’s benefits.

More than 9,200 eligible retailers participate. On average, 37% of these retailers earn a quarterly bonus, with an average bonus of $1,086 per retailer. Some retailers have earned as much as $18,000 in a single quarter. Yet there’s room for improvement – another 30% meet the necessary sales criteria each quarter but fail to activate at least one book of each new tickets by the Friday of delivery week; that disqualifies them from a bonus. With just a little more effort, there is ample opportunity for retailers to earn even more extra money.

Incentives for Pennsylvania Lottery retailers include a sales growth incentive, best practices initiatives and quarterly bonus earnings. The sales growth incentive provides for an additional bonus of 0.75% commission if quarterly sales exceed the previous year’s quarter by up to 2.99%, and an additional bonus commission of 1.5% if quarterly sales are up by 3% or more. Best practices incentives vary by retailer category (Level 1 – quarterly average sales of $75,000 or more, Level 2 – quarter average sales of less than $75,000, and Level 3 – a recruitment initiative for prospective social environments). Quarterly bonus earnings are based on quarterly promotions that offer incentives through sales of specific traditional lottery products.

Level 1 best practices include increasing counter facings, creating designated lottery space or winner awareness area, increasing indoor and outdoor signage and conducting second-chance drawings. Bonuses range from $100 in lottery coupons or promotional tickets for a second-chance drawing up to a $1,000 bonus for increasing counter facings. Level 2 best practices offer $100 in lottery coupons or promotional tickets for either an Ask for the Sale Initiative or conducting a second-chance drawing. The Level 3 recruitment program offers $500 for each installed monitor.

After the Texas Legislature authorized an additional one-half percent allocation of gross sales (over and above the standard 5% commission) for retailer sales performance commissions beginning with the FY2010/2011 biennium, the Texas Lottery developed a same-store sales growth program that incentivizes retailers based exclusively on quantifiable sales performance.

The Retailer Cash Incentive Program (RCIP) allows for implementation of a primary program, traditionally 13-17 weeks in duration, while simultaneously conducting a six-week secondary program that includes a drawing for 250 cash prizes of $1,000 each and the opportunity to earn packs of scratch tickets for incremental sales of specific scratch games. Primary programs offer retailers the opportunity to earn cash for meeting their individual goal plus additional money and drawing entries for incremental sales above goal. Over 700 drawing prizes range from $500 to $100,000.

Both the primary and secondary incentive programs have a cap on the amount incentive payments that can be made during each period, in order to meet the allocated program budget each year. From inception of the program in September 2009, through FY 2024, the agency completed 44 primary RCIP and 23 secondary programs. Qualifying retailers have generated more than $590.59 million in incremental revenue for the state and have received more than $310.25 million in incentive payments.

Big Splash in Virginia

While the Virginia Lottery offers between six and ten individual corporate account incentives annually, tailored to address specific opportunities and strengthen relationships with individual retail partners, the big news is the recent development of an annual statewide retailer incentive program that in FY24 replaced numerous smaller incentives that were previously executed throughout each fiscal year. Developed with the help of feedback from other lotteries with similar programs, the intent was to engage retailers with meaningful incentives that would drive behavior change and help meet the Lottery’s annual instant ticket sales goals each year.

Key objectives for the new program included meeting or exceeding quarterly instant sales goals, improving the execution and maintenance of best practices, and growing lottery playership and engagement among retailers and players alike. To qualify for the incentive, retailers had to meet specific requirements during each quarter, such as maintaining “active” status, keeping out-of-stock and out-of-service rates below 4%, and activating and selling new instant games within the first two days of each monthly launch.

If retailers met these qualifiers, they could receive additional commission incentives based on their performance relative to their goals. The results of this program were impressive. The Lottery exceeded its FY24 instant sales goal by $79 million, achieving $1.314 billion in sales, which translated to an additional $25.7 million in profit. The cost for the statewide retailer incentives were $4.1 million, and other retailer incentives cost $1.6 million. This meant that while the annual incentive budget was exceeded by some $900,000, the additional profit more than made up for it. Additionally, retailer out-of-stocks decreased from 6.6% to 4.0%, and day-one activations improved from 56% to 70%.

Incentives for All Reasons

Whatever a lottery's goals are, incentive programs can help realize those goals. Of the programs summarized above, Pennsylvania’s incentives include one designed for social space recruitment for monitor games. The Missouri Lottery is another with a focus on new Keno retailers. Its Club Keno “9-Week Quick Start Program” is a performance-based incentive that returns the average of the first nine weeks of Keno sales to the retailer as a credit once the initial nine weeks our over. During that time, the Lottery’s IGT Keno Sales Reps (KSRs) visit the stores weekly to educate players and bartenders, as well as post winner awareness, jackpot flyers and point-of-sale materials. Throughout the process, the KSRs and lottery sales reps work together to coordinate an event to drum up support and awareness for the game.

Whether lotteries are zeroing in on specific products or are including several products in their incentive programs, it’s clear that all of these programs can significantly increase revenue for lotteries’ most important partners and increase both awareness and sales of all lottery products at the same time.