Highlights

  • The Lottery Corporation reported FY26 Revenue of AUD 3.58 billion and EBITDA before significant items of AUD 736.1 million.
  • Historically low major-jackpot activity weighed on Lotteries, while Keno revenue and EBITDA continued to grow.
  • Digital share of eligible Lotteries turnover increased to 46.6%, reinforcing digitalisation as a major strategic priority.
  • Management has entered FY27 with a refreshed operating model focused on participation, customer registration, product innovation and technology.

The Lottery Corporation Limited (ASX:TLC) occupies a distinctive position in Australia’s gaming and entertainment landscape, operating a portfolio of lottery and Keno brands supported by long-duration licences, extensive retail distribution and an expanding digital customer base.

The company’s operations include major games such as Powerball, Oz Lotto, Saturday Lotto, Weekday Windfall, Set for Life and Instant Scratch-Its, alongside Keno services offered through licensed venues. This mix gives the Business exposure to both jackpot-led participation and more frequent base-game activity.

Unlike many consumer businesses, lottery performance can vary substantially depending on the size and frequency of jackpots. Large jackpots tend to increase customer engagement and turnover, while unusually subdued jackpot cycles can create difficult year-on-year comparisons. That dynamic was particularly evident in FY26, making underlying participation trends, pricing initiatives, digital engagement and cost control important considerations when assessing the company’s performance.

The company’s August 2026 full-year update therefore provided investors with more than a snapshot of annual earnings. It also outlined a strategic reset intended to position the business for a more digitally led phase of growth.

FY26 Results

The Lottery Corporation released its FY26 results on 19 August 2026 for the year ended 30 June 2026. Group revenue before significant items was AUD 3.5825 billion, down 2.7% from AUD 3.6827 billion in the comparable period.

EBITDA before significant items came in at AUD 736.1 million, representing a decline of 1.8%, while EBIT before significant items declined 4.2% to AUD 622.3 million.

Net profit after tax before significant items was AUD 342.5 million, down 6.3%. Including significant items, reported NPAT was AUD 284.6 million compared with AUD 365.5 million in FY25.

The softer headline result needs to be viewed against unusual jackpot conditions. Management described FY26 as an especially unfavourable period for Powerball and Oz Lotto jackpots, estimating the combined jackpot outcome as approximately a one-in-45-year event.

There was no AUD 100 million Powerball jackpot during FY26 for the first time since FY21 and no AUD 50 million Oz Lotto jackpot for the first time since FY17. The company estimated that these jackpot outcomes reduced revenue by approximately AUD 350 million.

The impact was partly offset by pricing changes in major games and continued participation in base games. Powerball underwent a price change in November 2025, while FY26 also captured the full-year effect of the Saturday Lotto change introduced in May 2025.

The company reported price retention of 63% for Powerball and 100% for Saturday Lotto, illustrating the importance of pricing and product management in helping offset jackpot volatility.

Digital Expansion

Digitalisation continues to sit near the centre of The Lottery Corporation’s longer-term growth strategy.

Digital share of Lotteries turnover, excluding products that are not available digitally, increased to 46.6% in FY26 from 45.7% in the previous corresponding period. The increase was achieved despite the weaker jackpot environment, which is relevant because major jackpot games typically carry a higher digital mix.

For management, the opportunity extends beyond shifting existing transactions from physical retail outlets to digital channels. Digital registration provides a direct customer relationship and creates opportunities to improve engagement, product discovery, subscriptions and personalisation.

The company has identified more than four million existing unregistered customers as a significant opportunity. Bringing more of these customers into its retail and digital membership ecosystem is intended to lift registered active customer numbers and support a deeper relationship with players.

FY27 priorities include improving number-selection experiences and draw reveals, expanding social play and digital gifting, and developing additional auto-play Options intended to encourage subscriptions.

The Lottery Corporation is also planning a new greenfield app targeted for launch in the first half of FY28. Management sees digital as the group’s primary growth engine and innovation platform, suggesting that customer experience and technology execution will become increasingly important measures of progress.

Keno Momentum

Keno provided a different performance profile during FY26.

Revenue from the division increased 3.0% to AUD 364.3 million, while EBITDA advanced 6.2% to AUD 109.5 million. Its EBITDA Margin improved to 30.1% from 29.2% in the previous corresponding period.

Retail Keno turnover continued to grow, supported by activity across licensed pubs and clubs and changes to in-venue Marketing and product presentation. New terminal deployment also contributed to the development of the customer proposition.

Keno is strategically important because it provides Diversification away from the jackpot cycles influencing the core Lotteries operation.

The next stage involves further digitisation of the venue experience. Management plans to introduce Bring Your Own Device capability, expand new terminal installations and develop cashless payment options.

The company nevertheless faces a regulatory consideration around online Keno. At the time of the FY26 result, proposed amendments to the Interactive Gambling Act were before Federal Parliament. The company said online Keno represented approximately 2% of group turnover and contributed around AUD 25 million of EBITDA in FY26.

Growth Priorities

The August results also provided a clearer view of management’s priorities under Managing Director and CEO Wayne Pickup.

The Lottery Corporation has introduced a leaner operating model and refreshed its broader strategy around the proposition “Where Australia Comes to Play.” The focus is on growing participation and engagement while improving customer experiences across Lotteries, Digital and Keno.

Product innovation remains one lever. Set for Life is scheduled to undergo a refresh involving an increase in subscription price from 60 cents to 70 cents and the addition of upfront prizes from September 2026, subject to regulatory approvals.

Retail infrastructure is also being modernised. After completing new terminal deployment in Queensland, New South Wales and the Australian Capital Territory, the company expects to substantially complete the Victorian rollout.

Artificial intelligence is another developing area. TLC plans to use AI in areas such as jackpot optimisation, while continuing to invest in digital and customer capabilities.

At the same time, management is maintaining attention on expenditure. FY27 operating expenses are expected to be between AUD 305 million and AUD 315 million, subject to jackpot outcomes, while Capital Expenditure is expected to be approximately AUD 100 million.

Licence Position

A major strategic development during FY26 was the 40-year extension of the Victorian lotteries licence.

Management described the extension as materially strengthening portfolio duration and certainty. Long-term licences are a central element of The Lottery Corporation’s business model because they provide visibility over the period during which the company can operate its products in key jurisdictions.

The company expects to make a AUD 1.145 billion payment associated with the Victorian licence extension, which will lift Leverage in the first half of FY27. At the end of FY26, net Debt to EBITDA stood at 3.1 times.

Despite the expected increase in leverage, the Board remains committed to maintaining a strong investment-grade Credit rating. S&P Global reaffirmed the company’s BBB+ credit rating in May 2026.

Capital management will consequently remain an important area for investors as TLC balances licence payments, technology investment, dividends and broader growth initiatives.

The Board maintained the FY26 total ordinary Dividend at 16.5 cents per share, fully franked, including a final dividend of 8.5 cents per share. From FY27, the company is changing its dividend policy to target 80%–100% of NPATA before significant items, rather than NPAT before significant items.

Final Takeaway

The Lottery Corporation (ASX:TLC) entered FY27 following an unusual operating year in which historically low major jackpots weighed on headline revenue and earnings.

However, the FY26 update also highlighted several underlying developments that extend beyond jackpot outcomes. Digital penetration continued to rise, Keno delivered revenue and EBITDA growth, major game price changes showed meaningful customer retention and management established a refreshed growth strategy.

Attention now shifts toward execution. Growing registered customers, delivering digital enhancements, refreshing products, modernising the retail network and maintaining cost discipline will be important in determining whether the company can convert its strategic reset into more sustainable growth.

The Victorian licence extension adds long-term certainty to the portfolio, although the associated payment will increase leverage. For investors assessing The Lottery Corporation, the balance between licence security, digital opportunity, jackpot variability, regulatory developments and disciplined capital management is likely to remain central to the company’s longer-term outlook.