Kansas Lottery reports lower FY25 traditional sales, growth from iLottery and vending machines; sports wagering and funds detailed
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Summary
Director Dorel told the Committee on Federal and State Affairs that Kansas Lottery traditional sales fell to about $297 million in FY25 from $337 million a year earlier, while new iLottery and vending initiatives and sports-wagering receipts helped other revenue streams; committee members pressed on retailer impacts, gray machines, and how funds are allocated.
Director Dorel, identified in committee materials as the director of the Kansas Lottery, briefed the Committee on Federal and State Affairs on the agency’s fiscal results, new products and channels, and how gaming-related revenues are distributed.
Dorel said traditional lottery net sales in fiscal year 2025 totaled about $297 million, down from $337 million in FY24, and attributed most of the decline to fewer large jackpot runs in FY25. He told the committee recent multibillion-dollar jackpots late in calendar 2025 — including an $1.8 billion jackpot won on Christmas Eve — have since helped boost sales.
The Lottery director outlined three business silos under the Lottery umbrella: traditional products (scratch tickets and draw games), state-run expanded gaming (four state-owned casinos), and sports wagering. He reported combined draw-game sales (Powerball, Mega Millions, Kansas Cash) were about $101 million in FY25 versus $135 million in FY24, and said the Lottery paid out more than $210 million to players and nearly $17 million in retailer commissions during FY25.
On digital expansion, Dorel said the Lottery launched e-instant games on an iLottery platform in February and recorded roughly $32–33 million in iLottery sales during the first months after launch. Committee members asked about projections; Dorel pointed to testimony that estimated roughly $26 million for FY26 (noting staff later clarified that the FY26 figure did not count early iLottery activity for the FY25 total). He said iLottery revenue is treated as part of traditional-lottery distributions and flows into the same statutory channels (economic development, juvenile detention, correctional institutions building, and other uses shown in the Lottery’s distribution tables).
The director described a strong push to increase self-service vending machines and other retail options to meet changing player preferences. He said the Lottery finances and owns the vending machines and has installed more than 200 machines (the transcript lists both 200 and 390 in successive lines). Retailers have asked the Legislature to lift a statutory two-machine-per-location limit in some cases; Dorel said the agency is focused on placing machines by quality and location rather than sheer numbers. He also noted Walgreens is planning to enter the lottery retail channel and that the Lottery is coordinating on how that will be implemented.
Committee members repeatedly raised retailer concerns that iLottery might cannibalize in-store foot traffic. Dorel said industry evidence from other states shows iLottery often increases retail visits for prize claims and related activity, and he said the Lottery is planning retailer-facing promotions and omnichannel products linking online and in-store experiences. He acknowledged anecdotal retailer concerns and said some changes in foot traffic are likely attributable to broader economic trends and pay-at-the-pump behavior rather than iLottery alone.
Dorel addressed unregulated ‘gray’ gaming machines in retail locations — devices that may be skill-based, chance-based, or a hybrid — and said the Lottery neither regulates nor earns revenue from those machines. He said some machines are likely illegal under gaming-device definitions and that growth in these units is a concern for both casinos and the Lottery. He also recalled that original legislation included a $750,000 allocation for a white-collar crime unit tied to enforcement of gray-machine activity; he said some enforcement language was later stricken, leaving only the funding element.
On expanded gaming, the director reported about $92 million in state revenue from casinos in FY25 and cumulative receipts exceeding $1.15 billion since casino openings. He detailed revenues by gaming zone (examples cited: Southeast ~$40.5M, South Central ~$164M, Northeast ~$168M, Southwest ~$45.9M in FY25) and said most zones were up year-over-year for the first half of FY26.
On sports wagering — created in the 2022 session and referenced in testimony as governed by Senate Bill 84 — Dorel said the state retains 10% of the remaining net sports-wagering revenue (90% goes to facility managers). He explained statutory allocation: the first $750,000 of the state’s receipts fund a white-collar crime unit, followed by a distribution where a portion goes to the problem gaming and addictions fund, a share goes to the State Gaming Revenues Fund (and then to designated programs), and a significant portion is directed to the "Attracting Professional Sports Teams to Kansas" fund. Dorel cited specific dollar figures distributed in the most recent cycle (for example, the director listed approximate dollar allocations that were recorded in the committee materials).
Committee members asked whether Missouri’s recent launch of sports wagering (December) is affecting Kansas; Dorel said it is too early to measure the impact and staff are tracking data to report by midyear. On tribal and municipal gaming, Dorel said tribal compacts and municipal licensing can alter local market dynamics, potentially affecting state-owned casino revenues, but he noted those negotiations and compact decisions are outside the Lottery’s direct control.
Throughout the briefing, Dorel offered to provide follow-up materials on several counts, including the details of the attracting-professional-sports fund and specifics of contracts and expenditures related to any professional-team agreements. The committee thanked the director and moved to a separate briefing on the Economic Development Initiatives Fund.
