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September 18, 2009
The Virginia Lottery today announced it exceeded its projections by raising more than $439 million in profits for Fiscal Year 2009 (FY2009). By law, all of that profit goes to Virginia’s K-12 public schools.
“We are pleased that we were able to surpass our goal in fulfilling our mission to raise money for K-12 public education,” said Virginia Lottery Executive Director Paula I. Otto. “We are proud of the positive contribution made by the Lottery to the Commonwealth, even in a year of economic uncertainty.”
The $439.1 million in profit represents the amount earned for the Lottery Proceeds Fund during the fiscal year, which ran from July 1, 2008, through June 30, 2009. It is a decrease from the record-setting $455.3 million in FY2008. Nevertheless, it represented the third-best performance in the Lottery’s 20-year history. The top two performing years were FY2008 and FY2006.
“This shows that even in a year of steep economic challenges, an organization selling an entertainment product using a business-world model can do well,” said Otto. “It also shows that lotteries are not recession-proof.”
Sales and Prizes
The profit for FY2009 was driven by sales of $1.366 billion. Of that amount, the vast majority – $781 million – went right back to players in the form of prizes. Those prizes ranged from $1 all the way up to the biggest winning ticket of the year: a $75.6 million Mega Millions jackpot. It was one of nine occasions during the past year in which a single ticket in Virginia won a prize worth $1 million or more.
Fun and Games
The Lottery’s 20th Birthday Celebration, which lasted throughout FY2009, was marked by a number of special events. A Birthday Raffle was held, in which Rebecca Jackson of Roanoke won the $1 million top prize. The Lottery’s first game, Match 3, made a return with an exciting twist: a second-chance drawing in which 20 players won scholarships from the Virginia College Savings Plan. Each scholarship had an initial value of $50,000.
Other highlights of the year included a New Year’s Raffle in which four lucky winners won $1 million each. The Lottery’s partnership with Bass Pro Shops produced one of the Lottery’s most popular scratch games. The Bass Pro Shops game included second-chance drawings, in which four Virginia Lottery players won exciting outdoor adventures.
The two most exciting moments of the year came shortly after 11:00 p.m. on May 1 and again two weeks later at the same time on May 15. That’s the moment when Lottery officials discovered that a Mega Millions ticket purchased in Virginia had matched all six numbers to win the jackpot. The first of those winners, Joe Denette of Spotsylvania County, won $75.6 million. He chose to take the cash option of $47.8 million, which he received in a presentation in Victory Lane at Richmond International Raceway. The other jackpot-winning ticket, worth $19 million, was claimed by Joe and Sue Claffey of Rappahannock County. They chose to take the cash option of $11.5 million.
Among other major winners during the year: Five Virginia Lottery players won the top prize in the Win For life game. Each will receive $1,000 each week for the rest of his or her life. Of those five, two bought their winning tickets using subscriptions, in which players can purchase tickets for multiple drawings directly from the Virginia Lottery.
Retailer Commissions
Lottery retailers across the Commonwealth earned $76.9 million in commissions by partnering with the Virginia Lottery. Retailers earn 5 percent for every ticket they sell, 1 percent for every ticket they cash and a bonus for selling an unusually large winning ticket. For example, the store that sold Joe Denette his Mega Millions jackpot winner, Joyful Convenience Market in Spotsylvania County, received a $50,000 bonus from the Virginia Lottery.
Operating Expenses
The cost of running the Lottery does not come from tax dollars – it comes from Lottery ticket revenue. In FY2009, the Lottery kept its operating expenses to just 5.4 percent, which is far below the 10 percent allowed by Virginia law.
“We worked hard to identify areas in which cuts could be made, so resources could be put in areas to generate maximum revenue for the Commonwealth,” said Otto. “The Virginia Lottery is run in a prudent manner.”
Cost-Savings for the Future
Lottery officials are looking ahead to further reduce operating expenses in FY2010, which began on July 1. Those cost-saving measures include partial-elimination of paid television time for the daily draw show. This does not include Mega Millions drawings, which will continue to air. The daily drawings will continue to be held, but the Lottery will no longer pay television stations to show them, for a potential cost savings of approximately $2 million over the next two years. For players who wish to watch the drawings live, they will continue to be streamed live on the Internet. The winning numbers will also continue to be available after drawings via Twitter and RSS feeds. Other cost-saving measures are still under consideration.
“The Virginia Lottery has a hard-earned reputation for getting the most from each dollar invested,” said Otto. “We recognize that each dollar saved is another dollar for K-12 education in Virginia.”
Looking Ahead
The 2010 fiscal year is already shaping up to be one of the most interesting in the Lottery’s history. A new partnership with the Washington Redskins, forged during FY2009, has resulted in the Redskins Mania Scratcher game, with unprecedented prizes such as 20-year Redskins season tickets and trips on the team plane to Dallas for the Redskins-Cowboys game.
“As the Lottery embarks on its next 20 years, it faces the challenges of maintaining the high standards it has set through past performance,” said Otto. “The Lottery’s reputation for fun, integrity and innovation is a source of pride for Lottery employees – as it should be for all Virginians. The bar is set high.”
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