The quick answer is yes, lottery retailers who sell winning lottery tickets do receive some monetary compensation. However, the amount they get is usually a very small percentage commission on the winnings, and does not make them instant millionaires like the lucky ticket buyers.
Lottery Retailer Commissions
When a customer buys a lottery ticket at a store, that store is acting as an agent or retailer for the state’s official lottery organization. The store purchases batches of lottery tickets for resale from the lottery, and gets to keep a small part of the revenue from ticket sales as commission. This commission often ranges from 5-7% of the ticket price.
If one of those resold tickets later turns out to be a jackpot winner, the store also gets a commission on those winnings. However, this percentage tends to be much smaller, usually around 1% of the prize money. So while 1% of a multimillion dollar lottery prize is still a significant amount, it is nowhere close to the full jackpot amount that the winning ticket holder receives.
For example, if a winning Powerball ticket worth $100 million was sold at a particular store, that retailer would likely receive around $1 million as commission from the lottery organization. That’s a nice bonus, but a far cry from the nine-figure grand prize that the actual ticket buyer takes home.
Other Bonuses and Incentives
In addition to sales commissions, some lotteries also have programs that reward retailers for selling major winning tickets. For instance, the New York Lottery gives out “retailer bonuses” when a ticket purchased at a specific store matches 5 out of 5 numbers. The bonus amount depends on the game, but can be as high as $10,000 for a jackpot-winning Powerball ticket.
State lotteries want to encourage retailers to push lottery ticket sales, so they offer incentives for stores that sell big winners. These bonuses generate local publicity and increased foot traffic that benefits the business. Lotteries may also give out plaques or certificates to commemorate major prize winners from a particular store location.
That said, the main financial reward for retailers still comes from sales commissions. Unless explicitly stated by the rules of a certain lottery game, stores do not receive anything additional beyond their standard small percentage of large prizes.
Other Benefits for Retailers
Aside from the direct monetary compensation, retailers can gain various other benefits from selling major winning lottery tickets:
- Increased customer traffic and lottery ticket sales – Publicity surrounding a big winner draws more players hoping to get lucky
- Higher overall store profits – More foot traffic means more sales of other items as well
- Branding and marketing opportunities – Stores mention their connection to jackpot winners to promote their business
- Displaying winners’ name and photo – Adorns the store with aspirational stories that attract players
In essence, retailers that sell winning tickets gain prestige and free marketing. Their store becomes known as the lucky place to buy lottery tickets, even if the financial impact is negligible compared to the jackpot.
Winning Retailer Stories
Here are some real-world examples of lottery retailers who benefited from selling major winning tickets:
- A Florida supermarket known as Publix #343 sold a winning Powerball ticket worth $590.5 million in 2013. The store received a $100,000 bonus from the state lottery.
- An Exxon gas station in Chicopee, Massachusetts sold a $758.7 million Powerball ticket in 2017 and earned a $50,000 retailer bonus.
- A Detroit liquor store sold a Mega Millions ticket worth $1 billion in 2018, the largest jackpot in history at the time. The retailer commission was likely around $1 million.
These stores received nice bonuses, publicity, and long-term rises in customers. But their rewards paled in comparison to the massive lottery winnings that ultimately went to the ticket buyers.
The Retailer’s Role
It’s important to understand the lottery retailer’s role in this process:
- They facilitate lottery ticket sales as an agent of the state lottery.
- They earn a very small commission percentage on ticket sales.
- They may get a small commission percentage on any major prizes.
- Their compensation is modest relative to the actual jackpot amounts.
So while retailers benefit to some degree from selling winning tickets, their financial gain is usually marginal. The overwhelming majority of lottery winnings ultimately go to the ticket holder rather than the store. Retailers make modest commissions, but they do not actually “win” or keep the jackpot funds themselves.
Can Retailers Buy Tickets at Their Own Stores?
In most states, lottery retailers and their employees are prohibited from purchasing lottery tickets directly from the store where they work. This policy aims to avoid potential conflicts of interest and fraudulent activity surrounding high-value winning tickets.
However, in some states, retailers can buy tickets as long as they do it when they are off duty and not working. Policies vary, but the general concern is that retailers should not be able to print and purchase tickets for themselves on the job. They are usually limited to buying them while off duty at other locations.
Notable Cases of Retailer Fraud
There have been some cases where lottery retailers themselves tried to cheat and claim prizes from tickets they purchased illegally:
- In 2003, a clerk at a Nebraska convenience store falsely claimed a $1 million jackpot. He was caught and had to forfeit the winnings.
- An Indiana gas station clerk was convicted of lottery fraud in 2013 for buying and trying to cash a $1 million ticket during his work shift.
- In 2019, a North Carolina retailer was sentenced to jail for purchasing winning scratch tickets from his own store and claiming $300,000 in prizes.
Situations like these demonstrate why most lotteries prohibit retailers from buying tickets at their own stores. Oversight helps ensure fair play and prevent fraud surrounding high-value winning tickets.
Oversight of Lottery Retailers
To summarize, lottery retailers:
- Act as commissioned sales agents for the state lottery.
- Get a very small percentage of large prizes as commission.
- Gain publicity but do not personally win jackpots.
- Are subject to rules restricting them from buying tickets at their own stores.
- Can face prosecution if caught falsely claiming prizes.
While selling a major winner benefits retailers indirectly through commissions and publicity, their financial gain pales in comparison to the actual jackpot. Lotteries enforce rules to prevent retailer fraud and ensure equitable play.