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Ninety Years Young

Puerto Rico’s traditional lottery was launched in 1934; 56 years later, it was joined by the modern Lotería Electrónica.


By Patricia McQueen

May 27, 2024

NASPL Insights Online




There are a number of major lottery anniversaries across North America this year, and perhaps none are more historic than the celebration of 90 years of legalized lottery play in Puerto Rico. The U.S. territory actually has two types of lotteries. The traditional lottery (Lotería de Puerto Rico) launched with weekly drawings on May 31, 1934, patterned after Spanish and South American passive lottery models using street vendors to sell pre-printed game tickets. Much more recently, Lotería Electrónica (“Additional Lottery” as defined by the law) was created in 1989, with its first daily numbers drawing (Pega 3) held in November 1990.





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“A lot of our fellow directors from other NASPL jurisdictions don’t know that we have two kinds of lotteries,” notes Lorna Huertas Padilla, Assistant Secretary of the Lottery Bureau (part of the Treasury Department) – essentially the chief executive overseeing both the traditional and electronic lotteries. She has held that role since December 2020, having previously served as the operational director for the traditional lottery. She’s proud that sales of both lotteries combined increased by more than 26% from FY21 to FY23, from $603.6 million to $763.9 million, with combined contributions to good causes growing from $156.7 million in FY21 to $193.7 million in FY23. “That’s great for us on this little island.” Importantly, each lottery has its own dedicated players and both grow independently of the other.

 

The recent sales trend is a welcome recovery after a series of natural disasters, followed by the COVID-19 pandemic, took a heavy toll on Puerto Rico’s people and economy, and lottery sales were of course impacted as well. Back-to-back hurricanes hit the island in September 2017. First it was Irma, then Maria, whose catastrophic impacts left much of the island’s power grid down for months, with almost 3,000 lives lost. Then in January 2020, a 6.4 magnitude earthquake caused significant damage and power outages, and was part of an “earthquake swarm” with thousands of smaller earthquakes reported over several months. The island’s people are nothing if not resilient.

 



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Traditional Lottery

The roots of Puerto Rico’s traditional lottery date back to the early 1800s. Still under Spanish control, Puerto Rico at times offered draw lotteries patterned after those in Spain. However, they never really gained momentum until officially legalized in 1934, more than three decades after the island was ceded to the U.S. at the end of the Spanish-American war in 1898. Puerto Rico officially became a U.S. territory in 1917, and in 1947, the island’s government further codified the lottery, creating a mechanism that established the lottery as it is known today.



There are three types of drawings under the traditional lottery umbrella. “We celebrate a drawing every week during the whole year,” notes Huertas Padilla. There are 47 weekly “ordinary” drawings, each with 200,000 tickets that generate $4.1 million in sales. There’s a special “extraordinary” drawing for Mother’s Day week – it’s the largest of the traditional drawings, with 400,000 tickets and $13.2 million in sales. Finally, a newer series of drawings, called Billetazo, are held four times per year (in February, July, September and December). The 200,000 tickets in each of these four drawings generate $6.2 million. For 2024, the September Billetazo draw will honor the Lottery’s 90th anniversary.

 

Tickets for these drawings are printed at the Lottery’s own facilities and distributed through a network of some 4,000 street vendors. These are individuals who purchase tickets from the Lottery and sell them directly to their customers. “We sell every ticket, so that’s great response from our citizens.”



Lotería Electrónica

The “additional” lottery launched in 1990 as Lotería Electrónica is similar to other North American lotteries, with a portfolio of numbers-based games, including Powerball, plus scratch tickets. As noted, Pega 3 was the first to market in November 1990. Pega 2 and Pega 4 were added in 2002, and all three games are currently offered twice daily, at 2pm and 9pm. A Wild Ball option was introduced in 2022.

 

Puerto Rico launched its first lotto-style game in July 1991 with Loto. That game has undergone a few revisions over the years, with add-ons that provide both incremental revenue and added value for players with opportunities to win more or bigger prizes. The current version is Loto Cash, a 1-of-35 plus 1-of-10 matrix. The base game of $1 can be enhanced with a $1 option to match a second set of numbers and/or a $1 multiplier option. As its name implies, all-cash jackpots start at $500,000.

 

Scratch tickets were introduced in December 2009, and are currently offered at the $1, $2, $3, $5, $10 and $20 price points. Top prizes range from $1,000 up to $250,000. Bingo games are popular, as are games with multipliers; there’s also a current $2 family that features notable landmarks around the island.



The last of the current Puerto Rico-only games currently offered is Kino, launched in 2016. Drawn every four minutes, Kino is particularly popular in sports bars.

 

And then there’s Powerball, added to the island’s portfolio in October 2014. It didn’t take long to produce big winners. On November 22 that year, there was a $2 million second-tier prize winner, and two jackpot winners followed suit within the next few months. A Puerto Rico ticket shared a $564.1 million jackpot with North Carolina and Texas on Feb. 11, 2015, and a single ticket scored a $50 million prize on April 18, 2015.

 



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That exciting start is likely a good reason why Powerball quickly became Puerto Rico’s second-highest product line behind the three Pega games. A strategic marketing plan has made the territory one of the industry leaders in the add-on options Power Play and Double Play, ranking among the top 10 Powerball jurisdictions in Power Play sales and number two for Double Play sales. Although players can certainly buy only the base game for $2, marketing materials in Puerto Rico promote it as a $4 game, with both Power Play and Double Play. “Everybody plays Powerball with a $4 play, and this little island is competing well with the bigger lotteries,” marvels Huertas Padilla.

 

Marketing Strategies

That positioning of Powerball and its add-ons is just part of an overall marketing plan that has led to a sales rebound across games, building both the traditional and electronic lotteries back as part of the island’s general recovery from the downturn caused by external forces. “The sales and marketing strategies that we’ve established are the key,” says Huertas Padilla. “We saw the difference in our marketing from 2021 to now, and we are continuing to see that kind of improvement for both lotteries.”





For the traditional lottery, with tickets sold through thousands of street vendors, the marketing call to action is for everyone to look for their local vendor. That has really helped those vendors, each with their own areas of coverage, increase their sales. Perhaps more importantly is the renewed focus on the traditional lottery as an important part of Puerto Rico’s unique culture and heritage. “It’s a 90-year-old lottery, so we want to emphasize our love for this kind of lottery.” Recent ticket art reflects that love, showcasing different aspects of life on the island with new colors and a new look and feel.

 

In contrast, the general marketing theme for the electronic lottery is a call to action to play – so you can win! “Everyone can win, so we emphasize buying tickets for the different games,” explains Huertas Padilla. Scratch tickets can offer winning experiences at any time, and Pega 2/3/4 games are drawn twice daily. There are also promotional partnerships with retailers, perhaps in-store events or activities that add more fun to lottery play. A relatively new strategy for both lotteries is to have a presence at sporting events, to show support of sports and to introduce more fans to lottery games. Lotería Electrónica ticket sales are typically arranged in partnership with a local retailer, who sets up a booth at the venue, while traditional lottery tickets are sold through a participating vendor.

 



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Puerto Rico Lottery Bureau

Sales and Contributions Summary

Traditional Lottery Sales

 FY21 

 FY22 

 FY23 

Ordinary

$104,113,555

$200,734,729

$188,521,362

Extraordinary

                  16,253,794

                  15,996,150

                  16,341,370

Billetazo

                  16,063,964

                  24,600,000

                  32,800,000

Total Traditional

136,431,313

241,330,879

237,662,732





Electronic Lottery Sales

 FY21 

 FY22 

 FY23 

Pega 2/3/4

280,534,396

296,985,645

296,011,491

Powerball

                  82,519,959

               103,548,010

               122,199,624

Loto Cash

                  35,247,682

                  39,896,174

                  38,125,512

Kino

                          609,554

                          610,767

                          583,645

Instant Scratch Games

                  68,276,003

                  66,431,873

                  69,288,984

Total Electronic

               467,187,594

               507,472,469

               526,209,256





Grand Total Sales

$603,618,907

$748,803,348

$763,871,988





Contributions to Good Causes

 FY21 

 FY22 

 FY23 

Traditional Lottery

$6,750,000

$6,750,000

$6,750,000

Electronic Lottery

               149,954,039

               153,820,573

               186,986,416

Total Contributions

$156,704,039

$160,570,573

$193,736,416



Responsibility and Good Causes

As with any lottery, for Puerto Rico it’s very important to emphasize responsible gambling. By law, some lottery proceeds help fund the Compulsive Gambling Assistance Program, which provides free counseling, treatment, rehabilitation and recovery services to people (and their families) who experience problems related to any form of gambling. A helpline is included on all lottery marketing and promotional materials. “We talk a lot about that,” emphasizes Huertas Padilla. “We try to engage the people of Puerto Rico so they know that if they have a problem, help is available.”




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With most people safely enjoying lottery games, revenues from those games provide important funding for good causes throughout the island. Another of the Lottery’s marketing campaigns focuses on this message: “When you play lottery games, everybody in Puerto Rico wins.” It’s all about the people and organizations who receive lottery proceeds – lottery revenues help support infrastructure, health, education, housing, social programs, sports and culture. “Our efforts to increase sales help us give more money each year, and our contributions to the Treasury help social programs that could otherwise not be funded. When citizens buy tickets, they are contributing to these programs and helping to pay for many public works.”

 

And there are a lot of good causes to support! Specific programs receiving lottery funds include housing rental subsidies for senior citizens; social benefit programs such as the Health Insurance Administration, Compulsive Gambling Program, and Catastrophic Illness Fund; the Municipal Revenue Equalization Fund for infrastructure works, road improvements, social programs and administration; the University of Puerto Rico Scholarship Fund; and the Department of Recreation and Sports to promote sports and recreational activities, with an emphasis on activities for people with disabilities, high-performance athletes, and programs for the development of sports in minor categories and adaptive sports programs.


 



Looking Ahead

On the immediate horizon is a big party planned in September, celebrating the 90th anniversary. The focal point is the special September 24 Billetazo drawing honoring every traditional street vendor in Puerto Rico. “Ninety years is a lot of people and a lot of tickets,” exclaims Huertas Padilla. “It will be amazing.”

 

While lottery sales recovered nicely from recent challenges, there is more work to be done. She’s happy with the current product mix for the time being, although there have been discussions about possibly bringing Mega Millions to the island. First on the agenda, though, is to focus on improving Loto Cash and better secure its place in the portfolio.

 

“Our main goal is to maintain the stability in this industry and we are looking forward to still increasing our sales, but most of all to continue establishing the credibility and the sense of belonging from our players. Our players, and our employees, are a big part of our industry.”

 

Huertas Padilla and the entire Puerto Rico Lottery Bureau team look forward to welcoming other North American lottery directors at the NASPL Directors’ Meeting in June, bringing 90 years of history to life.







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