Following a trend set early in the fiscal year, Kentucky Lottery sales are ahead of last year’s pace – but behind their budgeted amount for the year.
At the Kentucky Lottery Corporation’s (KLC’s) board meeting, Vice President of Finance Rick Kelley reported sales from July through December of 2014 were $436.2 million. This is $15.8 million more than last year, but $13.5 million below budget.
Year-to-date draw game sales for the period were $142.8 million, which is $19.3 million less than last year and $21.7 million below budget. Kelley reported the main cause of the decrease has been dwindling sales of the Powerball game. Sales of the game in the first six months of the fiscal year were $29.6 million, a $15.5 million decrease from the same period last year and $16.4 million below budget. The KLC’s other multi-state game – Mega Millions – finished the period with $17.3 million in sales, down $5.3 million from last year and $4.2 million below budget.
Kelley said the Powerball sales decline mirrors a national trend, but that Kentucky is still performing better than other states. “We’re down 35.1 percent year-to-date when compared to last year for the game, but the industry as a whole is down 40 percent,” Kelley said.
Instant tickets however are performing better than expected. Scratch-off ticket sales for the period were $271.2 million, which is $19.1 million more than last year and $11.7 million higher than budget. Keno sales for the first six months of the fiscal year were $22.1 million, which were $3.5 million less than budget.
Year-to-date income before transfer of dividends was $110.4 million, $2.4 million less than last year and $8 million less than budget. “With Powerball being our most profitable game, loss of those sales are obviously going to affect our bottom line,” Kelley said.
The declines in Powerball and Mega Millions have caused the projection for overall sales for the year to be lowered. Kelley said overall sales are now projected to be down 3.5 percent to $902.5 million versus the budgeted $935 million.
“We’re projecting Powerball to be 27.8 percent below budget for the year, with $66.4 million in sales versus the $92 million budgeted for the game,” he said. “We also are projecting a 19.8 percent decline for the Mega Millions product.” Kelley said Mega Millions sales are projected to end the year at $34.5 million, lower than the $43 million budgeted for the game. Overall, draw games are projected to finish the year 14 percent lower than expected.
“Part of this shortfall however should be made up through the stronger-than-expected sale of scratch-off tickets,” said KLC President and CEO Arch Gleason. “We’re anticipating a strong showing from our instant tickets, projecting them to finish the year at $562.2 million, up 3.7% from the budgeted $542 million.”
“One large jackpot run for Powerball could help turn the tide for that game,” Gleason said. “Also, profitability for our Pick 3 has been lower than expected due to player’s great luck recently. For the year, the Pick 3 game has paid out $2.6 million more than expected.”
Kelley also announced that Kentucky Lottery retailers have now surpassed $1 billion in commissions since ticket sales started in 1989.
The board welcomed a new member. Lisa Haydon of Springfield, a retired social worker, was appointed to the board last week by Gov. Steve Beshear. Board member Ted Richardson was also reappointed to another term.
In other business, the board approved:
A lease agreement with Pinnacle Properties II for the Madisonville regional office and storage space, and;
Rules and regulations for 17 scratch-off tickets and one draw game.
The next meeting of the KLC’s board of directors will be March 27 at 9:30 a.m. EST, at the KLC headquarters, 1011 West Main Street in Louisville.
From the Kentucky Lottery