Lottery breaks sales and dividend records in FY15, proceeds to state come in less than budgeted


The Kentucky Lottery sales for Fiscal Year 2015 were $899.1 million (including $12.2 million in free tickets). This breaks the old sales record established in FY14 of $858.8 million by $40.3 million.

Those sales led to record-breaking profits returned to the Commonwealth. A total of $236.1 million was transferred to the state, breaking the old record of $225.3 million by $10.8 million. However, the lottery was $16.2 million below what was budgeted by the Commonwealth for FY15 dividends. Unclaimed prizes, which are directed by law to the KEES scholarship reserve fund, were $9.3 million (versus $8.3 million in FY14).

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There were $147,000 in prizes withheld to pay back child support claims, along with $372,000 in other related debts to the Commonwealth. The state also received an additional $2.5 million in taxes withheld from prizes.

Scratch-off ticket sales were key in the record-breaking performance, rising $39 million from FY14 to a record-breaking $560.5 million. This breaks the old record level set in FY13 by $38.3 million. Draw game sales held nearly steady at $338.6 million, rising $1.3 million from FY14’s level of $337.2. Keno sales showed the most dramatic increase of any draw game – 60.7 percent – to $47.3 million in its first full year of sales.

The multistate Powerball and Mega Millions games continued their declining performance from FY14, following the trend seen at lotteries across the nation. Powerball sales fell $14.6 million to $65 million, while Mega Millions sales decline $6.6 million to $33.2 million.

“The things we can control did extremely well last year,” said Executive Vice President and CFO Howard Kline. “It’s the things we can’t control – namely the Powerball and Mega Millions jackpots – that kept our dividends from rising to the level we’d hoped.”

Kline was optimistic looking forward. “We have terrific momentum going into the new fiscal year. Scratch off ticket sales for the first week of July were better than any week we saw in the first six months of the last fiscal year. Our scratch-off ticket sales in May and June were around 13.5 percent higher than the same time last year. We’re on the right track, and hoping for better jackpot performance from Powerball and Mega Millions.”

“For 17 out of the past 22 years, we’ve broken sales records. We’ve also broken dividend transfer records in 17 years out of the past 22,” said Kentucky Lottery President and CEO Arch Gleason. “I believe we’ll be among the best in the country for our scratch-off ticket sales increase for the last year, and Powerball and Mega Millions actually performed better in Kentucky than it did in many of our peer states. Looking forward, we have an aggressive budget ahead of us and it’s going to be a big challenge, but we’re off to a great start in the new fiscal year.”

The board also approved the corporation’s operating budget for FY16. The budget includes a sales projection of $972 million, an 8.1 percent increase over FY15’s sales mark. This includes $600 million in sales of scratch-off tickets and $369 from draw games.

According to the Kentucky Higher Education Administration Authority (which administers lottery-funded college scholarship and grant programs), from 1999 through 2014 the Kentucky Lottery has funded $2,209,374,268 in college scholarship and grant programs for 569,542 students. The lottery is the sole funding source for the KEES scholarship program, and also funds the need-based College Access Program and Kentucky Tuition Grants.

Since inception, the lottery has sold $16.42 billion in tickets, returning $4.4 billion to the Commonwealth. Winners have received $9.9 billion in prizes, and retailers have been paid $1 billion. Operating expenses have been held to 6.6 percent of sales (FY15 operating expenses were 4.9 percent of sales).

In other business, the board approved the FY16 retailer sales incentive, along with rules and regulations for 12 scratch-off tickets.

The next meeting of the KLC’s board of directors will be Sept. 25. The meeting will begin at 9:30 a.m., and will be held at the KLC headquarters at 1011 West Main Street in Louisville. Committee meetings will begin at 8:30 a.m.

From the Kentucky Lottery


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