New York Lottery Posts Record Financial Results

With a 10th consecutive year of record sales, the New York Lottery today announced full-year, pre-audit results for fiscal year 2009-2010, which ended March 31, 2010. The increases in sales and profit came from both the Traditional Lottery and Video Gaming businesses. In total, the Lottery produced $2.67 billion in profit from $7.8 billion in sales and "net win." All of the Lottery's profit goes to funding K-12 education in New York State, and the Lottery's earnings represent over 12 percent of total state funding to local school districts.

Total sales and "net win" increased $158.2 million or 2.1 percent over the prior year; profits increased $122.9 million or 4.8 percent over the prior year.

The Traditional Lottery business includes draw games such as Mega Millions, daily Numbers and Lotto, and scratch-off tickets such as Win-for-Life and Cashword. Traditional Lottery games generated sales of $6.78 billion and profits of $2.17 billion, increases of $86.0 million (1.3 percent) and $87.4 million (4.2 percent), respectively. The profit increase was driven primarily by higher sales of Mega Millions, Win 4, and new games Powerball and Sweet Million, offset by declines in Quick Draw, Take 5 and scratch-off games. The increased profit also includes a $63 million investment gain in the annuity fund portfolio.

In the Video Gaming business, which includes casinos in Yonkers, Saratoga and six other locations, "net win" (total bets less prizes) totaled $1.04 billion; up $72.2 million or 7.5 percent over the previous fiscal year. Profit was $493.4 million, an increase of $35.5 million or 7.8 percent, which came primarily from growth at Yonkers.

"We're quite proud of our ability to increase profits yet again under such extraordinary economic conditions," said New York Lottery Director Gordon Medenica. "We know how important the Lottery's funding of education is to the schoolchildren of New York. More than ever in these difficult fiscal times, we appreciate the enthusiasm of our players who enjoy the fun and entertainment of playing Lottery games while contributing to such a worthy cause."

Traditional Lottery:

Within the Traditional Lottery business, draw games' sales were up 4.7 percent, mainly from Mega Millions (up 19.5 percent), Win 4 (up 3.5 percent) and the introduction of Sweet Million in September and Powerball in February. Lotto, a game with a statutory low prize payout percentage (40 percent vs. 50 percent for most other draw games), has been declining for several years, but held steady this year due to sustained jackpot roll ups. Quick Draw was down 3.0 percent due to game maturity and ongoing restrictions on retailer expansion. New York's daily Numbers game was down a marginal 0.6 percent while Take 5 sales continued their downward trend this year (down 6.7 percent versus a year ago) due to game maturity and cannibalization from a greater number of high jackpots for both the Lotto and Mega Millions games. Sales for scratch-off games were down 1.5 percent, due to a shift in sales mix toward lower priced games. Traditional Lottery profit was also favorably affected by the increase in draw game sales, which have a higher profit margin, versus the decline in scratch-off games.

Video Gaming:

Within the Video Gaming business, "net win" was up substantially at all casinos with the exception of Monticello Casino and Raceway, which was down 5.6 percent due to increased competition from Pennsylvania casinos. Empire City at Yonkers saw its "net win" increase 11.2 percent to $554.2 million. "Net win" increased at Batavia Downs Casino (9.6 percent), Fairgrounds Gaming and Raceway (7.9 percent), Finger Lakes Gaming and Racetrack (7.7 percent), Tioga Downs Casino (4.3 percent), and Vernon Downs Casino (2.9 percent). Saratoga Gaming and Raceway, the oldest of the state's casinos, posted a 1.0 percent increase in "net win."

Where Lottery Money Goes:

Overall, 96 percent of the Lottery's record $7.8 billion in combined sales and "net win" was returned to New Yorkers in the form of prizes, aid to education, and commissions to retailers:

• Prizes paid totaled over $4.0 billion in Traditional Lottery games.
• Commissions paid to over 16,500 Traditional Lottery retailers and 8 Video Gaming facilities totaled $875 million. The Lottery paid $406 million in commissions to Traditional Lottery retailers and $469 million in commissions to Video Gaming facilities.
• The entire operation of the Lottery, including advertising, marketing, printing, systems, telecommunications, finance and administration, is funded from less than 4 percent of sales.

About the New York Lottery and Education Funding:

Lottery revenue is distributed to local school districts by the same statutory formula used to distribute other state aid to education. It takes into account both a school district's size and its income level; larger, lower-income school districts receive proportionately larger shares of Lottery school funding.

The New York Lottery continues to be North America's largest and most profitable Lottery, earning more than $39.3 billion in education support statewide since its founding over 40 years ago. The Lottery contributed nearly $2.67 billion in fiscal year 2009-2010 to help support education in New York State, which was over 12 percent of total state education funding to local school districts.

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