New York Retailers Call on State to Increase Lottery Commissions
NEW YORK — A group of 14 trade organizations, including the New York Association of Convenience Stores, sent a letter to New York Gov. Kathy Hochul in an effort to increase lottery commissions by 1 percentage point over a four-year period in the state for its 14,600 licensed agents.
The letter alleges that under the New York Lottery system, sales agents are compensated in the form of a commission set by the Lottery Division, which was fixed at a rate of 6 percent of all ticket sales in 1967 and was never adjusted. Lottery sales volume has steadily risen since 1967, the letter states, but additional commission income to lottery sales agents has been far outstripped by sharp growth in their operating expenses.
"For example, a national survey of convenience stores shows that from 2010 to 2020 alone, core operating expenses rose 43 percent," the letter noted. "The upward pressure is worse than the national average in New York, where the minimum wage increased more than 80 percent from 2010 to 2020."
When costs rise in other segments, retailers can either absorb it, raise their retail prices, or cut expenses. But in the case of lottery sales, agents are forbidden from selling lottery tickets for more than face value, the associations wrote. The letter proposes a modest, gradual adjustment.
"Elevate their commission from 6 percent to 7 percent, phasing in the increase over a four-year period. That would equate to less than a 0.02 percent annual rate of increase over the 50-plus years since the rate was originally set," they said. "With the recent introduction of new digital forms of gaming over the next few years, the state can afford to increase commissions for traditional lottery sales agents while still generating higher revenue for education and other vital programs and services.
"Without new revenue, that will force retailers to cut expenses, the largest segment of which is labor. The typical U.S. convenience store employs 16 people full and part-time. Given New York's convenience store count of 8,000, this financial dilemma could impact the income of as many as 128,000 New Yorkers employed in convenience stores, not to mention those employed by other lottery sales agents," the letter continued. "An adjustment in lottery compensation, however, will preserve these jobs and enable our members to keep delivering the nation's leading lottery sales performance New York's education system deserves."
Lottery sales have increased from $53 million in 1967 to $8 billion today, with $3 billion being earmarked for education in 2020, according to the Lottery Division's fiscal year 2020 financial report.
In 2017, New York State Sen. Tony Avella (D-Queens) proposed a measure to increase New York lottery commissions from its current 6 percent to 8 percent. However, the measure was not adopted.