If you are lucky enough to have purchased a winning lottery ticket from a store in California, you may be wondering how much of a bonus the retailer gets for selling you that fortunate ticket. The amount a retailer receives for selling a jackpot winning ticket depends on a few factors, but they can stand to gain a nice chunk of change off your good fortune.
California Lottery Retailer Commissions and Bonuses
In California, lottery games are run by the California State Lottery. Retailers who sell lottery tickets in California receive a commission on every ticket sold and have an opportunity to earn bonuses when they sell winning tickets. Here is a breakdown of the standard commissions and bonuses:
- Retailers receive a 5% commission on every ticket sold at their location.
- For selling a ticket that wins a jackpot prize, retailers receive a bonus of 0.5% of the prize amount, up to a maximum of $1 million.
- For selling a ticket that wins a non-jackpot prize between $10,000 and $1 million, retailers receive a bonus of 1% of the prize amount.
These bonuses are in addition to the standard 5% commission retailers already make on all ticket sales. This means California lottery retailers have a financial incentive to sell as many tickets as possible in hopes of selling a big winning ticket.
Jackpot Bonuses
Jackpot prizes are defined as prizes starting at $1 million or more for games like Powerball and Mega Millions. For a retailer selling a jackpot winning ticket, the .5% bonus they receive can add up quickly. Here are some examples:
- Powerball jackpot of $150 million = $750,000 bonus for retailer
- Mega Millions jackpot of $500 million = $2.5 million bonus for retailer (maxed at $1 million bonus)
- SuperLotto Plus jackpot of $20 million = $100,000 bonus for retailer
As you can see, selling a ticket that hits a massive lottery jackpot can earn the retailer a life-changing amount of money themselves thanks to California’s generous retailer bonus system. With the Powerball and Mega Millions jackpots frequently climbing into the hundreds of millions, retailers in the state likely dream of selling the next big winning ticket.
Non-Jackpot Prizes
For smaller prize wins between $10,000 and $1 million, retailers in California earn a flat 1% bonus on the amount won. Here are some examples:
- $100,000 prize = $1,000 bonus
- $500,000 prize = $5,000 bonus
- $750,000 prize = $7,500 bonus
These smaller wins may not earn retailers the huge bonuses that massive jackpot wins bring, but they can still add up over time and deliver a nice extra income stream for retailers who sell a steady volume of winning tickets.
Impact on Retailers
The retailer bonuses given out by the California Lottery for selling winning tickets can have a major financial impact on local retailers across the state. Stores that sell big winning tickets see the most direct benefit, but all retailers have an incentive to sell as many lottery tickets as possible with the chance at earning bonuses.
Some retailers become hugely popular and renowned thanks to selling major winning tickets. For example, Dixon Landing Chevron in Milpitas sold a $522 million Mega Millions ticket in 2019, earning the store owner a $1 million bonus. Stores like this receive publicity and increased customer traffic after selling big winners.
The California Lottery retailer program is designed to motivate and reward retailers around the state for driving lottery sales. The program has contributed to explosive growth in lottery revenue over the years, benefiting public schools and all retailers along the way.
Claiming Retailer Bonuses
For retailers, collecting their bonuses for selling winning lottery tickets requires taking a few simple steps:
- When a major winning ticket is sold, the retailer will be notified by lottery officials to begin the bonus claim process.
- The retailer must complete and submit a retailer bonus claim form to the lottery.
- The retailer needs to provide valid tax identification to have bonuses properly reported to the IRS.
- After processing, the lottery directly deposits the bonus into the retailer’s bank account.
Retailers have no need to follow-up or inquire about bonuses – the state lottery actively handles the entire process and ensures retailers get paid in a timely manner.
Selling Tickets and Earning Commissions
Aside from potential bonuses, retailers earn an ongoing 5% commission on every lottery ticket sold at their business. Here are some key things retailers should know about earning sales commissions:
- Commissions are calculated based on net sales after accounting for winning payouts.
- Commissions are paid weekly based on reconciled sales and payout data.
- Retailers must have an active, valid lottery contract to receive commissions.
- Sales commissions are paid automatically – no action needed from retailers.
- Lottery sales are exempt from sales tax in California.
With over $8 billion in annual lottery ticket sales in California, a 5% commission on all tickets sold provides retailers with substantial income on top of their regular business proceeds. Lottery sales have an outsized impact on a retailer’s bottom line.
Maximizing Lottery Commissions and Bonuses
Retailers looking to take full advantage of the California Lottery incentive program should focus on:
- Volume – Sell as many lottery tickets as possible to maximize commissions.
- Variety – Offer a wide range of scratchers and different lottery games.
- Promotion – Use point-of-sale displays and signage to promote lottery products.
- Training – Ensure staff are trained to encourage and enable lottery sales.
- Incentives – Motivate staff to sell more lottery with sales incentives.
Retailers who make lottery ticket sales a priority can see the commissions and potential bonuses add up over time. With the right strategy, the lottery can become one of the most profitable sections of any retailer’s business in California.
Lottery Retailer Opportunities
Becoming a California Lottery retailer provides small businesses, supermarkets, gas stations, convenience stores, and many other types of stores an opportunity to earn substantial commissions and bonuses over time. The state is always looking to expand its retail network to enable further growth of lottery sales.
Basic requirements to become a California Lottery retailer include:
- Having a suitable retail business location and type of business.
- No criminal history or legal issues for the applicant.
- Retailer location meets security standards.
- Applicant passes a credit check.
- Business must maintain lottery sales thresholds.
Retailers interested in joining the lottery’s network can visit the California Lottery website to submit an application online. By becoming a lottery retailer, any eligible business can start benefitting from this commission and bonus based partnership.
The Takeaway
Succeeding in selling a major winning lottery ticket comes with significant financial rewards for California retailers. Thanks to generous commissions and bonus structures, retailers have the chance to gain life-changing sums of money themselves by providing lucky tickets to their customers. By actively promoting lottery ticket sales, retailers across California can reap the ongoing rewards of participation in the state lottery system.