Thanks to tightened controls, the V.I. Lottery has gone from losing nearly a million dollars in fiscal year 2009, to a $200,000 profit in FY 2010 and projects a larger 2011 profit, Executive Director Donald Francois told the V.I. Senate in budget hearings Friday.
"We are not asking for any funding," said Francois, who took over the top lottery slot last summer. The switch from loss to profit came about despite the fact the lottery’s revenues from selling tickets went down by 3.6 percent, he said,
Since he came on, the lottery has ended ticket sales to dealers the day before the drawing; begun securing unsold tickets in locked containers before the drawing; started cancelling unsold tickets; and reduced the cash prize payout from a maximum of $5,000 down to $1,200, he said. Also, it has moved into the Franklyn Building on St. Thomas, saving $8,000 a month, and moved some printing in-house, saving large sums as well, he said.
“We expect additional savings as a result of the proposed automation of the traditional lottery game and printing tickets only on demand,” he said.
While there is no appropriation, there is revenue from the sale of tickets and a budget for expenses. For 2011, the lottery projects operating revenues from ticket sales at $19.5 million; about three percent more than in 2010. The traditional lottery is expected to contribute $8.1 million; Southland Gaming of the V.I. should add $10.2 million and Caribbean Lottery Services another $1.1 million.
From the total, $7.4 million should go to pay prizes and another $280,000 to cover printing tickets and other costs of directly running the games themselves. Another $6 million will go to salaries and benefits and $1.6 million to administrative costs. All operating expenses come to $15 million, a 4.5 percent increase over last year.
After all the expenses are subtracted, an operating income should remain of $4.4 million. Much of that will be divvied up according to a legislated formula, with $1.7 million to the Educational Initiative Fund; another $1.7 million to the Pharmaceutical Assistance for the Aged; and $1.1 million to the GERS Retiree Bonus Program. If revenues and expenses follow the budget, once all the dust is settled, the V.I. Lottery should see a net profit of roughly $237,000, Francois said.
