Powerball jackpots to get ‘bigger and more regular’ for Aussies according to one group of financial analysts

Bigger and more regular Powerball jackpots could be on the way soon, now that The Lottery Corporation, which runs the game, has more money in its coffers than expected.

Analysts at investment bank Citi have upgraded their stock rating on the company, which is listed on the Australian Stock Exchange (ASX).

To offset a potential decline in sales, the analysts expect The Lottery Corporation (TLC) to offer larger Powerball prizes and more often and increase the chance of winning a larger amount.

The law governing the games requires TLC to set aside a portion of its sales — about 2.5 percent for Powerball — into a prize reserve fund, the Australian Financial Statement reported.

If the jackpot rolls over for a few weeks because no one has won it, this reserve fund becomes larger than necessary because no top prize is paid out.

Bigger and more regular Powerball jackpots could be on the way soon as The Lottery Corporation, which runs the game, has more money in its coffers than expected. A Powerball winner is pictured

The excess money gives the Corporation flexibility over how high the jackpots can get from week to week.

There have already been two huge jackpots this year Powerball reached $200 million in February And $150 million last month.

“Our analysis indicates that after a good year for jackpots, Lottery Corp will regularly skip steps in the sequence to increase the likelihood of generating large jackpots,” Citi’s Adrian Lemme and James Wang wrote in a note to investors.

In layman’s terms, this means they expect TLC to offer bigger prizes more regularly.

Citi estimates that TLC will see a 4.4 per cent increase in sales to $4.1 billion in the year to June 30, with a 7 per cent increase in net profit after tax to $422.4 million.

When Powerball revenue grew 19 percent in 2021 and 33 percent in 2023, TLC increased the prize pool to encourage customers to buy more tickets.

The law governing the games requires The Lottery Corporation to set aside a portion of sales — about 2.5 percent for Powerball — into a prize reserve fund. A Powerball ticket is pictured

The Citi analysts predict a 4 percent decline in Powerball revenue in the next fiscal year, meaning the jackpots will likely be higher.

Mr Lemme and Mr Wang said the performance of Powerball, The Lottery Corporations’ most popular game, was well reflected in TLC’s share price.

That stock closed Tuesday at $4.97, down about 1.8 percent over the past year, and not much higher than when the company was spun off from Tabcorp in 2022.

Daily Mail Australia has contacted the Lottery Corporation for comment.