Lottery sales commission doesn’t reflect cost of doing business, retailers say

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When electricity and heating prices rise, or when payroll costs go up, Brian Mongi and his store managers can adjust the prices of products within the 23 area Quicklee’s locations so profit margins align with goals.

“But if you look at our store, the only thing I can’t control is the cost of a lottery ticket,” said Mongi, general manager of Avon-based Quicklee’s.

That’s why members of the New York Association of Convenience Stores NYACS) are asking the state to implement a 1 percent boost in the commission paid to lottery sales agents.

Agents have received a 6 percent cut of gross sales since New York implemented the lottery in 1967. The NYACS wants the 1 percent bump to be phased in over four years, with one-quarter increases each year.

Most importantly, the group says, the increase would not need to come from lottery profits, which were designed to aid education in New York. In 2021, the share of lottery profits shared by Monroe County school districts was just shy of $181.9 million, according to the NYACS.

“We would never ask Gov. (Kathy) Hochul or the legislature to take funds earmarked for education,” Bill Adams, president of the New York State Association of Service Stations & Repair Shops, Inc., said at a Friday morning news conference at Quicklee’s on Buffalo Road in Gates.

“But we believe the increase came from new gaming opportunities like sports betting and new casinos downstate.”

Mangi said his employees process between 300 and 800 lottery transactions a day, depending on store location and the size of jackpots. And while stores have lottery vending machines to sell scratch-off tickets, he said the machines still require service of some sort “at least four times a day,” be it reloading tickets, doing inventory or tending to a malfunction.

He also said his employees strive to provide a balance between moving the customer line while still ensuring quality customer service, which isn’t always easy with multiple lottery transactions.

“Our 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 convenient, year-round access to New York Lottery tickets,” NYACS president Jim Calvin said.

“There are legitimate costs in selling lottery tickets. An adjustment in lottery compensation will preserve jobs in our industry.”

New York Lottery officials say the 6 percent commission still provides agents with significant money.

“We have the greatest respect and appreciation for Lottery’s 15,000 agents, without whom the New York Lottery would not be as successful,” a lottery spokesperson said in an email. “Any change in the agent compensation structure must be carefully evaluated.

“While the  commission percentage has not changed over the years, the volume of play per transaction has substantially increased over time.  Thus, an agent is likely realizing a greater margin per transaction than they have previously realized. Last year alone, the sale of Lottery tickets generated some $459 million in retailer commissions.”

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