The Kentucky Lottery today announced Fiscal Year 2013 sales of $846.6 million (including $35.8 million in free tickets). This breaks the old sales record established in FY12 of $823.5 million by 2.8%.
These sales also led to record-breaking proceeds returned to the Commonwealth. A total of $223.8 million was earned for scholarship and grants programs funded by the Kentucky Lottery, breaking the old record set last year of $216.4 million. This is a 3.4% increase. Unclaimed prizes, which are directed by law to the KEES scholarship reserve fund, were $9.2 million versus $8.3 million in FY12. In addition , the Commonwealth received $3.6 million in taxes withheld from prizes.
Cash prizes paid to players were $494.9 million, up from the $459 million mark in FY12.
Scratch-off ticket sales also rose to a record level of $522.2 million versus $505.9 million last year. Draw game sales rose to $324.4 million (their second-highest level in KLC history) from last year’s 317.6 million. Retailers also enjoyed record-breaking commissions of $52.2 million, up from FY12’s $50.9 million figure.
Lottery CFO Howard Kline told the board a variety of factors led to the record-breaking sales in FY13. “We saw $5 scratch-off tickets as our biggest seller for the year, and our $20 tickets saw the largest percentage sales jump with a 12.3% increase,” Kline said. “We revamped our entire scratch-off ticket program last year with a number of changes. These included reducing the number of free tickets offered as prizes instead of a cash prize equal to the purchase price of the ticket, and reconfiguring some of our prize levels. As a result, we saw sales of this product line rise to historic levels.”
Kline also said the increase in draw game sales was primarily driven by a record-breaking $590.5 million Powerball jackpot in May.
Even though sales rose by more than $23 million, operating expenses for FY13 ($26.4 million) were actually $800,000 lower than the previous year, according to the KLC’s Vice President of Finance Rick Kelley.
The board also approved the corporation’s operating budget for FY14. The budget includes a sales projection of $903 million, a 6.6% increase over FY13’s sales mark and the first time lottery sales in Kentucky would surpass the $900 million mark. This includes $875 million in sales from traditional lottery scratch-off and draw games, and an additional $28 million from the launch of the new Keno game with sales set to start in November.
Anticipated dividends to the Commonwealth are expected be $227 million, consisting of $218 million for scholarships, grants and higher education programs and $9 million in unclaimed prizes to the KEES scholarship reserve fund. Gleason said overall profits could reach $230 to $235 million depending on actual results, including proceeds from Keno.
Executive VP and COO Marty Gibbs reported to the board that Keno retailer recruitment is well underway, with a goal of approximately 400 new and existing retailers selling the game at the time of its launch.
In other business, the board approved:
The retailer sales incentive program for FY14;
The FY14 internal audit plan;
A one year lease extension of the Prestonsburg regional office, and;
Rules and regulations for 11 scratch-off tickets.
The next meeting of the KLC’s board of directors will be September 20. The meeting will begin at 9:30 AM EST, and will be held at the KLC headquarters at 1011 West Main Street in Louisville. Committee meetings will begin at 8:30 AM EST.