Kentucky Lottery says iLottery costs will rise as sales grow; committee approves $11 million contract increase

Kentucky Lottery executives described a contract amendment that increases payments tied to the state's iLottery platform, saying the change reflects growing sales and vendor fees that scale with net sales.

T. H. Morris, the Lottery's executive vice president, and other lottery staff described a recent platform upgrade and rising player volume. "When our platform first launched in 2016, we were fairly small in total sales volume," an executive said; as sales increased, so did prize and vendor expenses. The contract structure pays vendors fees based on net sales to cover services such as geolocation, cashless payments and identity verification.

Committee members asked whether the projected $11,000,000 increase is proportional to expected revenue gains and urged the lottery to explain to the public how increased sales and vendor fees affect the overall return to the Commonwealth. Lottery staff said higher sales produce more revenue for state programs even after vendor fees increase.

The committee moved and approved the contract amendment on a roll-call vote.