New York Lottery Announces Twelfth Consecutive Year of Record Sales and Earnings

May 2, 2012 Updated May 2, 2012 at 12:23 PM EDT

By WKBW News


New York Lottery Announces Twelfth Consecutive Year of Record Sales and Earnings

May 2, 2012 Updated May 2, 2012 at 12:23 PM EDT

(WKBW release) The New York Lottery on Wednesday announced full-year, pre-audited results for the fiscal year 2011-12, which ended March 31, 2011.

According to a news release:

Sales and net win for the period totaled $8.44 billion, producing a profit of nearly $2.9 billion for education. Substantial increases in casino net win (total bets less prizes) and profits were reported at all nine of the Lottery's Video Gaming casinos, led by the opening of Resorts World Casino New York City at Aqueduct in October 2011. The Traditional Lottery business benefited greatly from strong growth of the Powerball game, which implemented a strategic redesign that included a price increase (from $1 to $2), larger starting jackpots and faster roll-ups. In addition, a world-record setting jackpot ($656 million) for Mega Millions produced more than $67.4 million in profit in the weeks leading up to the close of the fiscal year.

All Lottery profits go to funding K-12 education in New York State. The Lottery's fiscal year 2011-12 profit of $2.9 billion represents nearly 15 percent of total state aid to local school districts.

Total sales and net win increased $571.3 million or 7.3 percent over the prior year; profits increased $234.1 million or 8.8 percent over the prior year. The figures exclude extraordinary items last year, which included a $380 million licensing fee from Resorts World New York in September 2010 and a one-time gain from investment bond swaps of $15.3 million in May of 2010.

The Traditional Lottery business includes draw games such as Powerball, Mega Millions, daily Numbers, and scratch-off games such as Win-for-Life and Cashword. Traditional Lottery sales increased 3.8 percent to $7.0 billion, a result of a $221.5 million increase in draw game sales (6.9 percent) and a $32.5 million increase in instant game sales (0.9 percent). Traditional Lottery growth was concentrated in Powerball, Quick Draw, daily Numbers and Win 4, while growth in instant games came primarily from higher priced ($10+) games.

The Video Gaming business line generated a record $1.4 billion in net win and $697.1 million in profit, with increases at all nine casinos. Resorts World alone contributed $253.3 million in net win and $116.8 million in profit with less than five months of full operation in Fiscal 2011-12. The year over year increase in net win from all nine casinos totaled $317.2 million or 28.6 percent, producing an increase in profit of $149.7 million or 27.4 percent.

New York Lottery Director Gordon Medenica said of the Lottery's strong showing in all business segments, "We're always thrilled to set a new record and continue as the nations largest and most successful Lottery. But most importantly, we are proud of the significant contribution we make to support New York's schools. We look forward to continuing our record of success in the future."

Traditional Lottery:

Within the Traditional Lottery business, draw game sales were up 6.9 percent, due mainly to the price increase of Powerball during the fourth quarter and the resulting higher jackpots, which generated $296.6 million in sales and $121.7 million in profit. As anticipated, sales for Mega Millions were up only slightly in the wake of the Powerball growth, but results for the two games combined still showed an increase of more than $95.5 million or 14.3%. Sales for Mega Millions picked up substantially during a roll up that started in late January and set a new world record of $656 million before being hit on March 30. Sales for Lotto, a game with a statutory low prize payout percentage (40 percent vs. 50 percent for most other draw games) continue to decline, down 7.8 percent from the previous year. Quick Draw sales increased 18.4 percent ($77.8 million) over the previous year due to extended hours of operation and more creative display designs. New York's daily Numbers and Win 4 posted gains of 3.1 percent and 4.8 percent ($26.1 million and $37.2 million), respectively. Take 5 sales were essentially flat (up 0.2 percent) due to game maturity and continued cannibalization from a greater number of higher jackpot games. Sales for scratch-off games have begun to rebound, increasing 0.9 percent or $32.5 million, attributable to the increased popularity of higher price point games and a revised strategy for new game launches and advertising support.

Video Gaming:

Within the Video Gaming business, net win was up substantially at all casinos, led by the opening of Resorts World Casino New York City, the first casino located within the five boroughs, as well as continued strong performance from Empire City Casino at Yonkers. Net win from the now fully operational Resorts World facility totaled $253.3 million. Empire City Casino at Yonkers Raceway, our largest contributor, saw its annual net win increase despite the opening of the newer Resorts World Casino, with a $14.7 million year-over-year increase. All other Video Lottery casinos posted excellent gains due to a full year of extended hours, the effective implementation of a new free play program and strong results from new electronic table games. Saratoga Casino and Raceway, the oldest of the state's casinos, posted an impressive 10.8 percent ($15.1 million) increase in net win. Hamburg Casino at the Fairgrounds saw its net win increase 17.0 percent ($11 million) over last year; Finger Lakes Casino and Racetrack grew by 6.0 percent ($7.1 million); Tioga Downs Casino increased net win 11.0 percent ($5.9 million); Monticello Casino and Raceway grew 7.9 percent ($4.6 million; Batavia Downs Casino saw an 8.9 percent increase ($3.4 million) and Vernon Downs Casino and Hotel grew 5.1 percent or $2.1 million.

Where Lottery Money Goes:

Overall, 96 percent of the Lottery's $8.44 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 more than $4.1 billion in Traditional Lottery games.

• Commissions paid to nearly 17,000 Traditional Lottery retailers and nine Video Gaming facilities totaled more than $1 billion. The Lottery paid $420 million in commissions to Traditional Lottery retailers and $617 million in commissions to Video Gaming facilities.

• The entire operation of the Traditional Lottery, including advertising, marketing, printing, systems, telecommunications, finance and administration is funded from just 3.3 percent of sales.