FY18 budget calls for new sales record
LOUISVILLE, Ky. (Aug. 11, 2017) — Kentucky Lottery President and CEO Tom Delacenserie today presented expectations for fiscal year 2018, and his plans on how they would be met, to the Kentucky Lottery board of directors.
The final sales number for FY17 was $1,000,501,000, which was $3.2 million (0.3%) more than the previous year. Proceeds to the commonwealth were $247.7 million, a $5.3 million (2.1%) drop from the previous record-breaking year.
Executive Vice President and CFO Howard Kline said the reason for the decline was due to the high level of Powerball sales from the previous fiscal year.
“Powerball is our most profitable product,” said Kline. “The $1.6 billion jackpot we saw in FY16 added approximately $9 million dollars in net income for that year.”
Sales for July, the first month of FY18, were $80.1 million. That’s $2.1 million (2.6%) less than budgeted, and $4.7 million (5.5%) less than last year.
“July 2016 saw Mega Millions and Powerball jackpots both in excess of $450 million, which is why sales were less than the same period last year,” said Vice President and Corporate Controller Maggie Garrison. “However, the last three weeks of sales have been very solid, and having both Powerball and Mega Millions with large jackpots have helped us make up this gap. We are now performing as expected.”
For the first time in history, both Powerball and Mega Millions each head into the weekend with jackpots in excess of $350 million.
The board approved the budget for FY18, which anticipates $1,033,100,000 in sales and $252 million in proceeds to the commonwealth.
In presenting his first budget to the board, Delacenserie outlined a number of growth opportunities he plans to target during FY18. They include:
• Introducing “families” (like-branded groups at different price points) of scratch-off games;
• Adding 470 new ticket vending machines;
• Increasing product awareness at retail;
• Developing stronger corporate partnerships with chain operations, and;
• Tying retailer incentive to targeted sales growth.
“I’ve been very impressed with the team here in Kentucky, and feel like we’ve given them the tools they need to rise to the occasion of increasing our sales and dividends back to the commonwealth,” said Delacenserie.
In other business, the board approved:
• A contract with Ellipse Solutions LLC for implementation of finance and purchasing back-office systems and functions;
• Approval of the FY18 Retailer Incentive Plan;
• Approval of the FY18 Audit Plan, and;
• Rules and regulations for seven scratch-off tickets and eight Instant Play games.
The next meeting of the KLC’s board of directors will be Sept. 22. The meeting will begin at 10 a.m. at the KLC headquarters at 1011 West Main Street in Louisville. The Development Committee will meet at 3 p.m. Sept. 15. The audit committee meeting will begin at 8 a.m. Sept. 22, as well as the procurement committee at 9 a.m. that same day.