Protecting Jobs, Supporting Education Funding Requires an Increase in Commission Rate for Lottery Outlets

Commission Rate has Never Increased Since Inception of Lottery in 1967

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ALBANY, NY (01/10/2022) (readMedia)-- Neighborhood food stores, taverns, newsstands and other establishments that sell New York Lottery tickets are seeking an adjustment to their compensation in order to protect jobs in their industry and keep generating billions in funding for New York's educational system.

Fourteen trade associations representing licensed lottery outlets have asked Gov. Kathy Hochul to include in her state budget a plan to gradually increase lottery agent commissions from the current 6 percent of their sales to 7 percent over the next four years.

It would be the first adjustment to the commission rate since New York's lottery began in 1967. Over that time span, these 14,600 "traditional lottery sales agents" – bodegas, convenience stores, grocery stores, newsstands, taverns, restaurants, liquor stores, service stations and other outlets – have built the sales of traditional lottery games from $53 million to nearly $8 billion today, delivering more than $3 billion in funding for education last year alone.

Operators are dealing with unprecedented change across their various industries as a result of the pandemic and public policy initiatives in New York. Additionally, record high inflation has pushed retail prices to their capacity. The sharp growth in expenses across the board requires the State to increase operators' commissions in order to protect jobs and retain their ability to provide funding for education.

In their letter to Governor Hochul, the lottery agents emphasized that the revenue should not come from existing lottery proceeds earmarked for education. Rather, there will be sufficient gains in revenue generated by new digital forms of gaming over the next few years to fund the multi-year increase in lottery commissions without an impact on the crucial education funding provided by gaming operations.

Jointly requesting the budget allocation for higher lottery agent commissions were the following groups:

Asian American Retailers Association

Bodega and Small Business Association

Empire State Restaurant and Tavern Association

Food Industry Alliance of New York State

Long Island Gasoline Retailers Association

National Supermarket Association

New York Association of Convenience Stores

New York City Newsstand Operators Association

New York State Association of Service Stations and Repair Shops

New York State Liquor Store Association

New York State Restaurant Association

United Bodegas of America

United Franchisees of Long Island and New York

Yemeni American Merchants Association

"The iconic sidewalk newsstands in NYC have been devastated by the lack of foot traffic due to the pandemic. They desperately need this increase to keep their mostly immigrant businesses open," said Max and Robert Bookman, Counsel to the New York City Newsstand Operators Association.

"The National Supermarket Association is proud to join this coalition in calling on Governor Hochul to increase lottery agent commissions in the upcoming state budget. This modest proposed increase will go a long way in ensuring that lottery outlets such as independently-owned supermarkets can continue serving as a neighborhood outlet for lottery sales while at the same time supporting critical educational funding across New York State," said Nelson Eusebio, Director of Government Relations for the National Supermarket Association.

"Retail food stores across the state have been proud partners of the State's Gaming operations for decades, and it is long overdue that the commission rate for lottery retailers is increased," said Michael Durant, President & CEO of the Food Industry Alliance of New York State. "We urge Governor Hochul to include this sensible and modest increase in her executive budget proposal."

"The pandemic has caused tremendous disruption to the restaurants and taverns of New York State. Unprecedented inflation is causing rapid increases to the cost of food and materials, business has been severely depressed, and the rise of new variants continues to put businesses at risk. Increasing the commission rate for lottery sales is an overdue, but necessary, means to help sustain these small businesses," said Scott Wexler, Executive Director of the Empire State Restaurant & Tavern Association.

"From Buffalo to Montauk and from Staten Island to Plattsburgh, service station convenience store operators are a lifeline for many on the State's roads," said Wayne Bombardiere, Executive Director of the New York State Association of Service Stations and Repair Shops. "A marginal increase in NYS Lottery commissions is fair and well deserved for the services, security and availability they provide – often 24 hours a day and 7 days a week."

"Our member neighborhood businesses – many of them family owned and operated – have proudly supported public education for the past 55 years by providing adult New Yorkers with quick, convenient, year-round access to New York Lottery tickets," said Jim Calvin, President of the New York Association of Convenience Stores. "An adjustment in lottery compensation will preserve jobs in our industry and enable our members to keep delivering the nation-leading lottery sales performance New York's education system deserves."