The Lottery's (ASX:TLC) updated dividend framework should keep leverage within range, although higher NIC drag on cashflow sees limited improvement in dividend yield, Jefferies said in a note on Tuesday.

It secured an agreement with the Victorian state government for a 40-year extension of the public lottery license. The license is extended to June 30, 2068, with the company paying an upfront premium of AU$1.15 billion to the state. The payment will be entirely made in the first half of fiscal year 2027.

The analysts expect the firm's focus to be on organic growth opportunities, and it is likely to target additional revenue opportunities, such as portfolio enhancement, going forward.

The investment firm retained a hold rating and cut the price target to AU$5.60 per share from AU$6 per share.