CHICAGO, July 14, 2026, 14:11 (CDT)
- Ticket sales in May dropped 0.3% from last year to $320.1 million. Prize expense climbed 7.4%.
- Operating income dropped 26.2% to $52.0 million as the portion of sales going to winners rose by 5.3 percentage points.
- State filings indicate the lottery would have needed to generate roughly $123.8 million in operating income for June to meet its $851 million target for the fiscal year.
Illinois Lottery faced a big jump in June, needing about $123.8 million in operating income to hit its fiscal 2026 plan. That’s more than double what it made in May. A spike in prize costs hit the bottom line despite steady sales. The June financials aren’t out yet. The problem is on the payout side, not revenue.
The gap is key since the lottery’s private-management report had warned earlier that it would miss both its $851 million operating-income goal and the minimum net-income number set in the Allwyn Illinois contract for a second year in a row. Allwyn’s management deal runs out in October 2027. The state is working on a solicitation for whoever comes next. The shortfall comes while Illinois weighs the next operator agreement.
Ticket sales in May totaled $320.1 million, basically flat from $321.1 million last year. Prize expenses rose to $235.3 million, up from $219.1 million a year ago. Operating income dropped to $52.0 million, down from $70.4 million. The change was in margin, not customer count.
| May performance | 2026 | 2025 | Change |
|---|---|---|---|
| Ticket sales came in at | $320.1m | $321.1m | -0.3% |
| Prize expense was | $235.3m | $219.1m | +7.4% |
| Payout ratio moved to | 73.5% | 68.2% | +5.3 pts |
| Operating income dropped to | $52.0m | $70.4m | -26.2% |
| Instant-ticket sales totaled | $183.9m | $191.7m | -4.1% |
| Fast Play sales reached | $49.9m | $46.5m | +7.5% |
The payout ratio climbed to 73.5% from 68.2%, meaning winners got around $5.28 more back for every $100 of ticket sales compared to May 2025. The higher payout shaved the lottery’s operating-income margin to 16.2%, down from 21.9%. Timing played a role here.
There was a change in the sales mix. Instant-ticket sales dropped 4.1% to $183.9 million. But all other lottery games together saw sales climb 5.2% to $136.2 million. Mega Millions came in up 16.4%. Pick 4 added 8.7%. Fast Play was up 7.5%. The mix matters here, more than the total sales line.
Pick 4 caused the biggest jump in costs, with prize expense up $12.6 million from last year and making up about 77% of the lottery’s total increase in May prize payouts. The payout ratio climbed to 82.2%, up from 35.3%. On May 3, a drawing with 7-7-7-7 paid over $7.1 million to more than 3,300 winners, which was a major factor. The monthly hit came more from volatile prizes than from soft sales.
| Fiscal 2026 operating-income bridge | Amount |
|---|---|
| July through March, first three quarters | $618.5m |
| April | $56.7m |
| May | $52.0m |
| Total through May | $727.2m |
| Plan for full year | $851.0m |
| Needed in June to finish plan | $123.8m |
June’s target is 138% higher than May’s operating income and roughly 87% more than the average monthly result over the last 11 months. The private-management report already flagged that the year’s plan would be missed, but new filings lay out just how wide the gap is. The math doesn’t allow for an ordinary June.
Digital sales are again showing that revenue gains don’t always mean higher profits. In the period through March, iLottery sales climbed 6.6% to $571.1 million, beating plan by 1.5%. But about 65% of those sales came from Fast Play, which made up just 42% of gross gaming revenue—measured as sales minus prizes—according to the management report. The data suggest conversion is more important than just growing the channel.
The Belleville News-Democrat reported on July 13 that there are 10 unclaimed Illinois prizes of at least $100,000, adding up to $2.575 million. That’s just 1.1% of the prize expenses from May, and roughly 5% of operating income. Illinois rules let expired, unclaimed prize money be shifted to special prize pools, and the rest goes to the Common School Fund instead of to operator profits. The $2.575 million in unclaimed prizes is minor compared to the usual monthly payout changes.
Illinois Lottery Director Harold Mays said in March the operation was sticking with “responsible growth and innovation.” Keith Horton, interim CEO of Allwyn North America, said the focus is “sustainable, responsible growth.” But Mays’s own numbers put those words to the test, as higher sales end up swamped by prize costs. Illinois Lottery
But June may still look very different. Jackpot cycles, payout timing and when expenses hit can all swing the monthly numbers. The May results are unaudited, on an accrual basis, and as of Tuesday afternoon, June data wasn’t up. If June sees better sales or fewer prize payouts, the gap could shrink. A heavy payout month could make it worse. The full-year numbers will show if May was a blip or signals a real conversion issue.
