Highlights

• FY26 EBITDA of $736.1 million (-1.8%) and Revenue of $3,582.5 million (-2.7%) impacted by an especially unfavourable jackpot period — a 1-in-approximately-45-year statistical outcome.

• Victorian lottery licence extended by 40 years, materially strengthening the portfolio duration and certainty of the business.

• Full-year Dividend maintained at 16.5 cents per share (fully franked), reflecting Board confidence in the Business health and growth outlook.

• New operating model launched and strategy reset to accelerate growth as a digitally-led entertainment platform.

The Lottery Corporation Limited (ASX:TLC) is Australia's largest lottery operator, holding long-term licences to operate lotteries across Queensland, New South Wales, Victoria, South Australia, and the ACT, including iconic brands Powerball, Saturday Lotto, Oz Lotto, and Keno. The Company distributes across more than 4,000 retail outlets and a growing digital channel (app and website), generating predictable, largely infrastructure-like cash flows underpinned by long-dated state lottery licences. Revenue is primarily determined by ticket sales, which are driven by jackpot sizes and base game participation.

Recent Development

Released on 19 August 2026, The Lottery Corporation reported FY26 revenue of $3,582.5 million (down 2.7%) and EBITDA of $736.1 million (down 1.8%), both impacted by an especially unfavourable jackpot period for Powerball and Oz Lotto — described as a 1-in-approximately-45-year statistical outcome in terms of combined jackpot game turnover. Variable contribution was $1,032.0 million (down 2.3%) and operating expenses reduced $11.2 million (down 3.6%) through disciplined cost management.

Despite the jackpot headwind, TLC demonstrated genuine underlying strength: healthy retention of price increases in Powerball and Saturday Lotto, continued growth in base games and Keno, and positive momentum in digital channels. The Victorian lottery licence was extended by 40 years — a landmark achievement that materially lowers Business Risk and extends the duration of the licence portfolio. The Board maintained the full-year dividend at 16.5 cents per share (fully franked), signalling confidence in the business. A new, leaner operating model and refreshed strategy centred on "Where Australia Comes to Play" were launched, positioning TLC as a digitally-led entertainment platform.

Sector Context

TLC operates in one of Australia's most defensible businesses — lotteries are government-regulated, licence-protected, and have natural Monopoly characteristics within each licensed jurisdiction. The jackpot mechanic (larger jackpots drive disproportionate ticket sales) creates inherent revenue Volatility year to year, but the long-term statistical mean tends to revert, making FY26's 1-in-45-year outcome a temporary headwind rather than a structural issue. The 40-year Victorian licence extension materially de-risks what was previously the Group's most imminent licence renewal risk. Digital penetration — growing share of sales through app and online — is the primary Long-term Growth driver, as digital channels typically attract higher spend per player and enable personalisation.

Risks and Uncertainties

Jackpot outcomes are inherently unpredictable — while FY26's 1-in-45-year adverse outcome statistically should not recur in the short term, lottery outcomes are by definition random. Any sustained period of poor jackpot runs (accumulated rollovers creating large jackpots) or conversely, very large jackpots that generate one-off spikes, can create revenue volatility that makes Earnings difficult to forecast. The transition to a new operating model carries execution risk and near-term cost investment. Regulatory Risk around gambling harm minimisation — particularly any restrictions on lottery Advertising or digital player spending — remains a structural consideration.

Catalysts to Watch

The natural reversion of jackpot outcomes toward the statistical mean in FY27 is the single most likely earnings tailwind — in a normal jackpot year, TLC's revenue and EBITDA would be materially higher than FY26. The digital channel growth rate and its contribution to overall sales will be closely monitored as the primary strategic execution metric. Progress on the new operating model's cost efficiency targets and any updates on the "Where Australia Comes to Play" digital entertainment platform strategy will indicate whether the refreshed approach is gaining traction. The Victorian licence extension's impact on Credit ratings and Capital Structure will be a positive longer-term catalyst.

Final Thoughts

The Lottery Corporation (ASX:TLC) navigated an exceptional one-year statistical headwind in FY26 with discipline — maintaining costs, the dividend, and growing base game participation and Keno while managing through the worst jackpot year in nearly five decades. The Victorian licence extension and new operating model position TLC well for a more favourable FY27, with jackpot mean-reversion the most likely near-term earnings catalyst.