The Kentucky Lottery today announced Fiscal Year 2011 sales of $772.3 million (including $53 million in free tickets). This is $200,000 less than the $772.5 million in lottery tickets sold last year.
Dividends to the General Fund however rose 2% to $204.8 million (versus $200.7 million in FY10). Unclaimed prizes, which are directed by law to the KEES scholarship reserve fund, dropped to $7.5 million in FY11 versus $13.6 million in FY10.
At a meeting of the Kentucky Lottery Corporation’s (KLC’s) board of directors, Senior Vice President of Finance & Administration & CFO Howard Kline said scratch-off ticket sales rebounded in FY11 after a decline in the previous year. “Sales of scratch-offs rose 4.1% to $477.6 million, which is an $18.8 million increase,” he said. Sales of pull-tab tickets ended in December 2010, and realized $1.8 million in sales for the fiscal year. Pull-tabs accounted for $12.4 million in sales in FY10.
“Sales for our more profitable online games – such as Powerball, Mega Millions, Pick 3 and Pick 4 – dropped $8.4 million, or 2.7%. Powerball sales alone for the year were down more than 27% to $72 million, due in large part to the lack of big jackpots.” Kline said. “Increases in sales of Mega Millions and our scratch-off tickets helped offset the online sales loss.” Sales of Mega Millions increased to $33.5 million. This number exceeded the budgeted expectations by $8.5 million
KLC President and CEO Arch Gleason told the board that changes in the Powerball game slated for January – including raising the price per play to $2 – should help the decline. “Players tell us time and time again that they like playing for large jackpots, and the changes being made should hopefully help those jackpots rise faster,” Gleason said.
The percentage of sales returned to the Commonwealth in FY 11 was 29.5%. The state’s budget requires the KLC to return at least 28% of sales.
Operating expenses for the year once again decreased to $30 million, which is $2.2 million less than the previous year. This is the lowest amount of operating expenses since FY 1991, when sales were only $211.9 million. In addition, according to Kline, operating expenses have been cut 25.8% during the last five years.
Kline also said cash prizes paid to players were $422.4 million - or 58.7% of sales - during the year, and retailers received approximately $47.3 million in commissions.
“Our sales have remained consistent in light of a poor economy, our costs are well under control, and we’ve more than met our percentage return obligation to the Commonwealth,” said board chairman Keith Griffee. “All in all it’s been a good year.”
During the meeting, the board:
- Approved amending the current online systems, equipment and related services contract to add dual comm communications services to 1000 high-volume KLC retailers, and;
- Approved rules and regulations for 6 scratch-off tickets and a promotional feature for the Pick 4 game.
The next meeting of the KLC Board of Directors will be September 23rd. The meeting will begin at 9:30 a.m. ET, and will be held at KLC headquarters at 1011 West Main Street, Louisville. Committee meetings will begin at 8:30 a.m. ET.
