Lottery Brings In $280.2 Million For Education

Monday, December 21, 2009

The Tennessee Education Lottery closed out the fiscal year 2009 with a total return for education of $280.2 million, generating $265.5 million for the Lottery for Education Account and $14.7 million for the After-School Programs special account, according to an audit by the comptroller's office.

For the third straight year, the TEL achieved gross sales of over $1 billion.

Additionally, in comparison to fiscal year 2008, gross sales increased by $22.9 million.

Management attributes
this upward trend to the following factors:
• Ongoing success of the instant ticket marketing strategy which continued to include launches of spotlight games (Tennessee Millionaires’ Club and 5th Anniversary
Celebration) that helped to boost instant ticket game sales by $45.6 million (6%);
• TEL’s Play It Again second chance program continues to extend the sales period of our instant products, allowing our products to remain in the marketplace longer; and
• Experience of a full fiscal year’s sales activity for our in-state, online jackpot game, Lotto Plus — as compared to only four months of sales activity in fiscal year 2008 — which resulted in a $15.3 million increase in gross sales.

Fiscal year 2009 Cash 3 and Cash 4 sales remained relatively consistent with those of fiscal year 2008, experiencing a slight, combined decrease of 1%. Fostering this continuity was the implementation of two sales promotions, More Money and Lucky Sum, during fiscal year 2009.

Overall, management believes these marketing strategies were effective in their aims of increasing prize availability and maintaining prize payouts, the primary drivers of Cash 3 and Cash 4 sales.

Pick 5, another jackpot driven game, saw ticket sales decline by 39% in fiscal year 2009.

Management believes this decline reflects the residual impact of the fiscal year 2008 Lotto Plus launch on Pick 5 sales, officials said. More specifically, as player familiarity with Lotto Plus continued to grow, it was expected that many players would shift interest from Pick 5 to Lotto Plus (as it generally maintains a larger jackpot) and a corresponding sales decrease would occur. Nevertheless, consistent with fiscal year 2008, the success of Lotto Plus continued to diminish the lost sales of our Pick 5 game. Accordingly, when comparing the combined 2009 Pick 5 and
Lotto Plus sales to combined 2008 Pick 5 and Lotto Plus, an increase of 21% was realized.

Powerball sales decreased by 15% in fiscal year 2009. Powerball sales are impacted by the size of the jackpots. In fiscal year 2009 we experienced two jackpot cycles of $200 million and $220 million, compared to two jackpots of $279 million and $300 million in fiscal year 2008.

The Hottrax Champions game was discontinued in December 2008, due to declining sales and limited retailer support.

Total gross lottery ticket sales for the fiscal years ended June 30, 2009, 2008, and 2007 were $1.088 billion, $1.065 billion, and $1.058 billion, respectively. The following chart depicts the distribution of sales by product for the three fiscal years ended June 30.


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