Celebrating - Kentucky Lottery

FISCAL YEAR 2014 ANNUAL REPORT
Celebrating
25
years of winning
KENTUCKY LOTTERY CORPORATION
The KLC’s net income-which funds
college scholarships and grants
in the Commonwealth-reached a record
$226.1 million
in FY14.
We’re pleased to report FY14 proved to be another record-breaker in Kentucky Lottery history.
For the past 15 years, Kentucky Lottery proceeds have primarily gone to funding college
scholarships and grants. That’s especially why I’m pleased the Kentucky Lottery has enjoyed
yet another record-breaking year.
A clear goal of my administration has been to create a better educated workforce, which
in turn helps grow the level of economic prosperity for our entire state. By helping make
college more affordable, we will encourage Kentucky’s best and brightest students to stay in
the Bluegrass to pursue their degrees.
Data from the Kentucky Higher Education Assistance Authority proves this is happening.
There’s a special designation our state’s best and brightest students can achieve as a Jeff
Green Scholar. This means the student has a 4.0 GPA along with high college placement
exam scores.
These are the students every university wants to attract, and they are highly recruited
by some of the nation’s best colleges. But an interesting trend has developed – in large
numbers, they’re staying home in Kentucky to attend college. In fact, just last year, three out
of every four Jeff Green Scholars were enrolled in a Kentucky institution. This is an all-time
high, and I believe that speaks to the positive effects of the Lottery-funded scholarships
and grants.
Congratulations and thanks to the Kentucky Lottery’s board of directors, retailers,
management and staff for yet another record-breaking year.
Sales for the period were $858.8 million (including $15.6 million in free tickets). This breaks the old sales record
established in FY13 of $846.6 million by 1.4%.
Those sales led to record-breaking profits returned to the Commonwealth. A total of $226.1 million was sent for
the college scholarship and grant programs funded by the Kentucky Lottery, breaking the old record of $223.8
million. We paid record retailer commissions of $52.8 million last year.
And our players benefited as well, for the first time ever winning over a half billion dollars in a single fiscal year.
FY14 saw $523.8 million in prizes awarded.
All of this was accomplished with spending only 4.9% of sales towards our operating costs, a remarkable
number for an organization with over $850 million in annual sales.
However, even in light of this record-breaking performance, we were $4.5 million below what was budgeted by
the Commonwealth for FY14 dividends. We’ve started FY15 by taking steps to improve our sales performance.
Changes have been made to our scratch-off program which we feel will bolster sales. We also continue to recruit
new Keno retailers with the focus being on expanding sales of the game.
For 16 out of the past 21 years, we’ve broken sales records. We’ve also broken dividend transfer records in 16
years out of the past 21. While dividends may not have been quite where we wanted them for FY14, we continue
to work toward sales and dividend improvement. That’s what the Commonwealth expects from us, and that’s
what college students receiving our scholarship and grant funds expect from us.
Sincerely,
Arch Gleason
President and CEO
Kentucky Lottery Corporation
Keith Griffee
Chairman
KLC Board of Directors
Sincerely,
KLC Board of Directors
Steven L. Beshear
kylottery.com
(as of 6/30/14)
Keith Griffee
Chair
Jodie Haydon
Director
Benham J. Sims III
Director
June Hudson
Vice Chair
Ted Richardson
Director
Jan Buddeke
Director
Todd Hollenbach
Kentucky State Treasurer
David Ingordo
Director
2014 KENTUCKY LOTTERY ANNUAL REPORT
|
3
Celebrating
25
years of winning
O
n an early morning in Louisville on April 4th 1989,
then-Gov. Wallace Wilkinson stepped in front of
a huge wall of cameras and microphones at a
Thorntons gas station on Preston Highway. He
walked to the cash register, handed over $3 and bought the first
two tickets sold for the brand-new Kentucky Lottery.
Neither of the two tickets Wilkinson bought that morning turned
out to be winners. However, after more than $15.5 billion in sales
during the past 25 years, Kentucky Lottery players have received
over $9.3 billion in prizes – and the Commonwealth has realized
more than $4.1 billion in profits that have gone to fund college
scholarships, education, adult and early childhood literacy programs,
affordable housing and even bonuses for Vietnam veterans.
kylottery.com
“Thanks to our incredible network of retailers and the
confidence the people of Kentucky have shown in our games,
we’ve been able to achieve modest growth and support a
variety of programs in the Commonwealth over the past two
and a half decades”, KLC’s President and CEO Arch Gleason
said. “While the marketplace in which we operate gets tougher
every day, we’ll keep working hard to maintain our success.
Kentucky’s most deserving students are counting on it.”
Lottery proceeds in Kentucky began shifting to college
scholarship and grant programs in 1999. In FY14, the KLC
surpassed the $2 billion mark in scholarship and grant
funding and the $4 billion mark in overall proceeds returned
to the Commonwealth. To put this in perspective, lottery sales
“Thanks to our incredible network of retailers and the confidence
the people of Kentucky have shown in our games, we’ve been able
to achieve modest growth and support a variety of programs in the
Commonwealth over the past two and a half decades”
in Kentucky were predicted to net $65 million a year to the
state. FY14 sales netted $226.1 million.
“From every dollar of non-loan college student financial
aid awarded in our state, 95 cents of it comes straight
from Kentucky Lottery proceeds,” Gov. Steve Beshear said.
“The lottery directly helps young people in our state go to
college. By helping make college more affordable, we are
encouraging Kentucky’s best and brightest students to stay in
the Bluegrass to pursue their degrees. This leads to a better
educated workforce which in turn helps grow the level of
economic prosperity for our entire state.”
In the current state budget, lottery proceeds are dedicated to
the need-based College Access Program and Kentucky Tuition
Grants as well as the merit-based Kentucky Educational
Excellence Scholarship (KEES) program.
“Kentucky students are the real winners of the Kentucky
Lottery. Each year thousands of students are provided help
that enables them to continue their education”, the Kentucky
Higher Education Assistance Authority Executive Director
Dr. Carl Rollins said. “When our students win, the entire
Commonwealth benefits.”
2014 KENTUCKY LOTTERY ANNUAL REPORT
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5
Instant Tickets
The KLC introduced 62 new scratch-off games in FY14.
These included the KLC’s first $25 instant ticket to mark
the corporation’s 25th anniversary. This ticket completely
sold out in only 26 weeks. A new “family” of games where
taxes were pre-paid on all prizes was also introduced.
Tickets were launched for the $1, $2, $5 and $10 price
points with similar graphics and play styles – each sold out
quickly. A number of new licensed property games were
also launched that sold well. These included tickets from
Ghostbusters™, Betty Boop™, AMC’® The Walking Dead®,
Pink Panther™, Family Guy™ and Duck Dynasty®.
Sales of scratch-off tickets in FY14 were $521.5 million, a
$700,000 (or 0.1%) decrease from the previous year.
LOUISVILLE WOMAN AT THE RIGHT PLACE
AT THE RIGHT TIME - BUYS HER FIRST $20 SCRATCH-OFF
AND WINS $175,000
I
f it weren’t for Angela Yount having to go to
a Kroger store near her daughter’s house, she
might have never won $175,000. While waiting for a prescription to be filled, she bought
a $175,000 Stacks of Cash scratch-off ticket.
This was the first time Yount had ever purchased
a $20 ticket. “I just had a feeling,” Yount told
lottery officials, when deciding which one to buy.
After discovering she’d won, “I kept looking at it
and thinking, ‘Nah, there’s something wrong.’”
Yount had a difficult time containing her
excitement during her wait. When called to
the desk get her prescription, she couldn’t help
sharing her news. “I held up the ticket and said, ‘I
think I just won $175,000.’”
Yount, who is retired from Brandeis Mechanical,
planned to take a trip to the western U.S. with her husband and to help out her children.
CARROLL COUNTY WOMAN $150,000
RICHER AFTER BUYING SCRATCH-OFF
Peggy Clay, 60, of Ghent, stopped by her local Kentucky Lottery retailer
on her way home from work to pick up a scratch-off ticket. She’d decided on the $10 game $150,000 Richer! because it caught her attention.
While scratching off the ticket, Clay matched one of her numbers to a
winning number. She then scratched off the prize amount. “I saw the
15 and thought that was pretty cool. But then I kept on scratching
and the zeros just kept on going,” Clay told lottery officials.
After the store clerk confirmed that Clay had won the game’s top prize
of $150,000, Clay called her son Jeremy. “Remember when I told you
one day I was going to hit big?” she told him. “Well, I just did!”
Clay, who works for Universal Protection Services, planned to first buy
a reliable car with her winnings.
kylottery.com
FY14 A Record Breaking Year
● $858.8 million in overall sales
● $523.8 million in prizes paid
● $226.1 in record dividends to the Commonwealth.
The highest dollar sales of any
scratch-off ticket in Kentucky
during the year belonged to
the $20 game Kentucky Cash
Blowout, which garnered
$29,049,340 in sales. The
highest number of tickets sold
for a game – 8,001,061 – was
for the $1 game Wild 8’s.
● $52.8 million in retailer commissions
2014 KENTUCKY LOTTERY ANNUAL REPORT
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7
Draw Games
Draw games offered by the KLC in FY14 were Pick 3, Pick
4, Keno, Kentucky Cash Ball and 5 Card Cash. The KLC also
participated in the multistate games Powerball, Mega
Millions and Decades of Dollars.
K
launch
eno, a fast-paced draw game popular in social
settings, was launched in Kentucky in FY14.
Overall draw game sales for the year grew $12.9 million
(or 4%) to $337.3 million, the second-highest number in
KLC history. This growth was fueled primarily by the $29.4
million in new sales generated by the launch of Keno (see
page 8). The best-selling draw game was Pick 3, which saw
sales of $125.5 million.
Sales of the $1 game began Nov. 4 in nearly 400
retail establishments across the Commonwealth.
By the end of the fiscal year, 522 retailers were selling the game
including 250 Keno-only retailers in social establishments who
had never before sold lottery tickets. Sales of Keno were $29.4
million. This was $1.4 million more than budgeted.
Keno is played similarly to a lotto-style game in which
players try to match numbers drawn every five minutes.
Winning numbers are displayed on monitors at retailers.
They can also be found at www.kylottery.com, and tickets can
be checked by self-service ticket checkers located at retailers.
Keno was first offered by a U.S. lottery in 1991 and, since
that time, has grown to be available in 14 states (or 30% of
U.S. lotteries). It accounts for more than $3 billion in sales
annually across America.
“We felt Keno would be a great addition to our product
mix,” said Kentucky Lottery President and CEO Arch Gleason
on the day of the game’s launch. “It’s been a tremendous
effort to implement this initiative. To have nearly 400
retailers on board for our first day of sales is outstanding,
and I think players will really enjoy this exciting new game.”
EFFECTIVELY MANAGING
OPERATING EXPENSES
Operating expenses for FY14 were
$41.4 million, only 4.9% of sales.
kylottery.com
2014 KENTUCKY LOTTERY ANNUAL REPORT
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9
Powerball:
Powerball sales in Kentucky slumped $25.4 million (24.2%) to $79.6 million. This was due to a
lack of a sustained large jackpot run during the year, and was a trend seen by Powerball states
across the nation. Potential changes for the game are being considered for FY15.
While Kentucky did not have a jackpot winner in FY14, there were four players who won the
game’s second prize of $1 million or $2 million by matching the five white-ball winning numbers
but not the Powerball.
Mega Millions:
The Mega Millions game showed by far the largest increase in sales for any Kentucky Lottery game
in FY14. Sales were $39.8 million, a $12.7 million (or 46.9%) increase from FY13.
Played like Powerball (players select five white balls from 1 to 75 and one “Mega Ball” from 1 to
15), the game also has an add-on “Megaplier” feature which acts as a prize multiplier. Drawings
are held on Tuesday and Friday nights.
Several changes were made to the game in FY14, including a minimum jackpot increase from $12
million to $15 million, jackpots growing by at least $5 million after each drawing in which the
jackpot is not won, and increasing the second prize from $250,000 to $1 million for matching the
first five numbers.
While no one in Kentucky hit the Mega Millions jackpot in FY14, there was one player who won
the game’s second prize of $250,000 before the changes were made, and four other players who
won $1 million after the changes were in place.
Pick 3 and Pick 4:
Pick 3, which continues to be the most widely played KLC draw game, saw a slight decrease in
sales from the previous year. Sales for the game ended FY14 at $125.5 million, a $100,000 (or
0.1%) decrease. The KLC’s other daily draw game, Pick 4, saw sales rise $100,000 to $38.8 million.
This is a 0.3% increase from the previous fiscal year.
Kentucky Cash Ball:
ONE DOLLAR IS ALL IT TOOK FOR
BREATHITT COUNTY WOMAN TO WIN
$200,000 CASH
BALL PRIZE
M
ary Howard of Lost Creek played the Kentucky
Lottery’s Cash Ball game on a regular basis, usually
buying a $1 play for each drawing. Howard got the
surprise of her life in September 2013 when she
discovered she’d matched all five numbers to win the game’s top
prize of $200,000.
“The store called me to let me know that they’d sold a $200,000
Cash Ball ticket. They told me that there were three of us that
bought tickets at that store and that I needed to check mine,”
Howard told lottery officials.
Howard immediately went to the store to check her ticket. When
she scanned it using the self-ticket checker, it showed she’d won
$200,000. “I screamed ‘Yahoo’ and got very excited,” Howard said.
After leaving lottery headquarters with a check for $138,000 after taxes, Howard planned to buy a house and car.
PRODUCT SHARE - FY 2014
Kentucky Cash Ball sales in FY14 dipped slightly from the previous year’s mark. Sales of the game
dropped $500,000 to $10 million, a 4.8% decrease from FY13. During the year, three players
won the game’s top prize of $200,000 on a $1 wager, and two won $100,000 on a 50 cent wager.
Drawn six nights a week, Cash Ball is a four-plus-one number game similar in play to Powerball.
Decades of Dollars:
Decades of Dollars, a $2 multistate game played in Kentucky, Georgia, Virginia and Arkansas,
offered a top prize of $250,000 a year for 30 years. While Kentucky had no top prize winner of the
game in FY14, there were 83 other winners of the game’s $10,000 second prize.
Decades of Dollars sales for the fiscal year were $5.9 million. This is $200,000 (or 3.3%) less than
sales of the game in FY13. Sales of this game in Kentucky will end in FY15.
5 Card Cash:
Instead of the numbers players usually get for one of our draw games like Pick 3 or Powerball, the
5 Card Cash ticket contains five card symbols. Rather than trying to match numbers, players try to
match card symbols in order to win.
Sales of the game ended the year at $8.3 million. This was $3.1 million or 27.2% less than sales of
the game in FY13. There was one winner of the game’s top prize of $100,000.
kylottery.com
2014 KENTUCKY LOTTERY ANNUAL REPORT
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11
People Really
Do Win!
The KLC awarded $523.8 million in cash prizes in FY14, up $28.9
million (or 5.8%) from the previous year. That’s 61 cents for every
dollar spent by players. Since inception, Kentucky Lottery players
have won more than $9.35 billion in prizes!
Here are just a few of the players who shared in more than a
half billion dollars last year!
kylottery.com
2014 KENTUCKY LOTTERY ANNUAL REPORT
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13
KENTUCKY’S BEST AND BRIGHTEST
STAYING HOME
When the KEES, CAP and KTG programs were established, one of the primary goals was to encourage Kentucky’s best and
brightest students to stay in the Commonwealth to pursue their degrees. This in turn would potentially help create a
better educated workforce, which would then help grow the level of economic prosperity for our entire state.
Success
Data from the Kentucky Higher Education Assistance Authority shows this is happening. There’s a special designation our
state’s best and brightest students can achieve by being named a Jeff Green Scholar. This means a student has a 4.0 GPA
along with high college placement exam scores. These are the students every university wants to attract, and they are
highly recruited by some of the nation’s best colleges.
But an interesting trend has developed – in large numbers, they’re now staying home in Kentucky to attend college. In fact,
just last year, three out of every four Jeff Green Scholars were enrolled in a Kentucky institution. This is an all-time high.
Measuring
in Degrees
K
entucky Lottery proceeds have now surpassed
$2,200,000,000 for college scholarship and grant
programs.
Lottery dividends started being transferred away from the
Commonwealth’s General Fund on a gradual basis in FY99.
Through FY14, the $2,209,374,268 in proceeds have gone
to fund need-based and merit-based grants and scholarships,
along with a reserve fund for the programs.
All told, 569,542 students across the Commonwealth have
received a lottery-funded college scholarship or grant since
FY99. The awards are distributed by the Kentucky Higher
Education Assistance Authority (KHEAA).
Lottery revenue funds the need-based College Access Program
(CAP) and Kentucky Tuition Grants (KTG), along with the popular
Kentucky Educational Excellence Scholarship (KEES) program.
“KEES, CAP and KTG are 100% funded by the Kentucky Lottery,
without which many students would not be able to pursue
the career of their dreams,” said Dr. Carl Rollins, KHEAA’s
kylottery.com
executive director. “We are thankful for the lottery’s proceeds
and support their continued efforts to fuel imaginations and
fund education.”
In fact, 95 cents of every non-loan student aid dollar awarded
by the Commonwealth comes straight from the sales of
lottery tickets. And the results are tangible – according
to KHEAA, data from the KEES program indicates more
of Kentucky’s best and brightest students are staying in
Kentucky to attend college (see page 15).
All unclaimed Kentucky Lottery prize money goes into the
KEES Reserve Fund to help maintain the financial stability of
the program. Around $9 million annually is projected to go
into this fund, and it has received approximately $110 million
since this practice started in FY03.
The first $3 million in Kentucky Lottery proceeds each
year goes to the University of Kentucky’s “Read To Achieve”
program and the Collaborative Center for Literacy
Development, with a total of $45 million going to these
programs since FY00.
HOW LOTTERY PROCEEDS
MAKE A DIFFERENCE
Ernie Barrios
Junior, University of Louisville
Ernie Barrios was grateful to have a choice in where he attended
college after earning both a KEES and CAP grant. “I had a full ride
to another school but the funds I received from the Kentucky Lottery
allowed me to go to the school of my choice,” he said. The University
of Louisville junior is studying chemical engineering. “My scholarship
is one of the most important things that has happened to me,” the
Louisville native said.
2014 KENTUCKY LOTTERY ANNUAL REPORT
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15
STUDENT PROFILES
Kaitlin Lemaster
Sophomore,
University of
Kentucky
Ashley Wiseman
Senior, Murray State University
One Louisa student is making
her family proud as the first in
her family to attend college.
This is thanks to the KEES
funds Kaitlin Lemaster receives.
The University of Kentucky
sophomore is studying to
become a veterinarian with
hopes of helping animals on a
daily basis. “The KEES money
helps me a lot – it pays for
my books,” she said. “It really
relieves a lot of stress for me. I’m
just thankful for the extra help
to allow me to focus on school.”
Imagine not having the option of going to college. That’s
what Ashley Wiseman would have faced had she not
received a KEES scholarship. “I would not have been
able to go to Murray without the KEES scholarship,” the
Hickman native said. “It allowed me to be independent, I
didn’t have to take out student loans and work multiple
jobs while trying to work towards my degree.” Ashley is a
fifth-year senior studying youth & non-profit leadership.
Top Schools Where Grants
and Scholarships Were Used in FY14:
Omega Savage
Graduate, Spalding University
Recipients of Kentucky Lottery-funded grants aren’t
all recent high school graduates. Just ask Omega
Savage. She’s a Louisville mother of five and a
CAP grant recipient. The funds helped her become
a recent graduate of Spalding University with a
Master’s of Science in nursing. “I’m so appreciative
of the grant I received. It has a huge impact, not just
for me but for my entire family,” she said. Kentucky
Lottery funds are making a difference for more than
just one member of her family as they are helping
her daughter who is studying psychology, also at
Spalding. Robin Buck is receiving both KEES and
CAP grants towards her educational expenses.
SCHOOL
GRANTS / SCHOLARSHIPS
AMOUNT
University of Kentucky
13,884
$25,668,908
University of Louisville
9,741
$16,978,841
Western Kentucky University
9,113
$15,085,706
Eastern Kentucky University
9,481
$15,010,661
Morehead State University
5,450
$9,157,240
Top Counties Where Students
Received Grants and Scholarships in FY14:
COUNTY
GRANTS / SCHOLARSHIPS
AMOUNT
Jefferson
19,670
$31,391,734
Fayette
7,257
$11,746,093
Kenton
4,017
$6,580,163
Boone
3,527
$5,875,059
Warren
3,035
$4,998,391
kylottery.com
2014 KENTUCKY LOTTERY ANNUAL REPORT
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17
PROMOTIONS
There were 66 statewide promotions conducted by the KLC during FY14. Players could enter by going
to the KLC’s website and submitting information from non-winning scratch-off or draw game tickets.
Popular promotions included:
● A scratch-off promotion where players could enter $2 tickets for a chance to win a VIP Racing Experience at the Kentucky Motor Speedway.
● A multistate promotion with Powerball where players could enter to win a trip to the Pro Football Hall of Fame Tailgate Party in Cleveland and a visit to the Hall in Canton, OH.
● A scratch-off promotion where players could enter to win one of 25
$600 Christmas Cash prizes.
● A promotion with all Kentucky Lottery draw games and scratch-offs to RETAIL COMMISSIONS IN FY14 WERE A RECORD-BREAKING
celebrate our 25th anniversary where players could enter to win the grand prize of $25,000 or one of twenty-five $2,500 prizes.
$52.8 MILLION, BEATING LAST YEAR’S MARK BY $600,000.
● A scratch-off promotion where players could enter $1 and $2 tickets for a THE AVERAGE KLC RETAILER SOLD $301,350 IN TICKETS
chance to win a trip to Chicago, Il., and participate in the Warehouse Dash for merchandise.
AND EARNED $18,510 LAST YEAR.
● A draw game promotion featuring Kentucky Cash Ball and 5 Card Cash awarding one player the title of Festival Fanatic for the Kentucky
Derby Festival.
M
ore than $1.3 million was given away in FY14
through the Ultimate Second Chance promotion.
This program is designed to award a top prize for
a ticket from a drawing where only non-winning tickets are
eligible. There were 51 drawings conducted during the fiscal
year, with the largest prize awarded of $150,000. In total,
more than 11.2 million entries were submitted.
Winners of the Pro Football
Hall of Fame Promotion enjoyed
meeting nearly 100 Hall of
Famers in Cleveland, OH at
the Hall’s 50th Anniversary
Celebration.
The KLC’s Winner Wagon and the Mini Winnie
maintained a busy travel schedule in FY14. The
Winner Wagon participated in more than a dozen
fairs and festivals across the Commonwealth,
reaching more than 1.5 million people. The Mini
Winnie helped drive sales at more than 100 events
through FY14, including a tour across Kentucky
celebrating our 25th anniversary.
The second-chance promotion
for the 25th anniversary ticket
received more than 8 million
entries, the most entries for a
promotion in KLC history.
Here are just a few of our FY14
Ultimate Second Chance winners!
kylottery.com
The GET YOUR GAME ON promotion, which is
a discounted or free ticket offer, was conducted
during the third sales week of each month for
FY14. For the 12 total weeks of the promotions,
the KLC saw nearly 183,000 eligible transactions
purchased. Those translated into more than
$482,000 of sales attributable to the promotions.
2014 KENTUCKY LOTTERY ANNUAL REPORT
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19
The Right Way to Run a Business-
Corporate Social Responsiblity
NEW RESPONSIBLE PLAY
BILLBOARD CAMPAIGN LAUNCHED
A
total of 51 billboards went up in FY14 near major highways in the
Commonwealth with the Kentucky Lottery’s “Play Responsibly” message. The
boards shared contact information for the 1-800-GAMBLER program. Due to
positive response, the number of these billboards will be tripled in FY15.
Choices:
There’s Always a Right One
Worldwide Recognition:
1-800-Gambler:
The KLC remains certified at Level 3 of the World Lottery
Association’s (WLA’s) Responsible Gaming Framework.
The Kentucky Lottery was the first lottery in the United
States to achieve both Levels 2 and 3 of certification for
its responsible play programs. We are among only five U.S.
lotteries to be certified at Level 3.
Managed in conjunction with the KYCPG, the
1-800-GAMBLER hotline in staffed 24-7 by professionals
trained in problem and compulsive gambling issues.
Anyone with any sort of gambling problem can call
the number for information, guidance and referrals to
treatment programs and Gamblers Anonymous.
To receive this certification, WLA members must adopt
the organization’s responsible gaming principles. The
principles help lotteries assess their responsible gaming
programs and keep them on a course of continuous
improvement. They govern the protection of players,
cooperation with stakeholders, research, advertising, the
promotion of responsible gaming and the monitoring of
gaming activities.
The WLA represents more than 140 member lotteries from
76 countries and six continents.
Kentucky Council on
Problem Gambling:
The Kentucky Lottery is a founding member of the Kentucky
Council on Problem Gambling (KYCPG). The council was
formed in 1995 to educate the community about problem
and compulsive gambling, offer training to counselors
interested in treating gambling disorders and offer financial
assistance for treatment to those wanting help.
Responsible Gaming Education
Week and Problem Gambling
Awareness Week:
Hit Bottom?
Eight years ago, the KLC launched “Choices – There’s Always A Right One.”
The in-school addiction prevention exercise is designed to inform youths
about the dangers of addictions that can come from alcohol abuse, drugs and
gambling. The program is geared toward students in grades six through nine
and has been distributed to approximately 180 middle schools throughout
the Commonwealth. It has also been placed in each of the state’s 13 Regional
Prevention Centers which use it in community awareness presentations.
Have you ever lied to people important
to you about how much you gamble?
Do you feel the need to bet more and
more money?
‘Yes’ to either question indicates you
may have a gambling problem.
Help is Here.
Call 1-800-GAMBLER
(1-800-426-2537)
kygamblinghelp.org
RGEW Poster-BW.indd 1
kylottery.com
These events raise community
awareness of issues related
to problem and compulsive
gambling, as well as emphasizing
that there is help available
for those suffering from this
addiction. A KLC staff member has
been involved with the planning
and execution of the Responsible
Gaming Education Week campaign
for the 10 years it has existed.
Play Responsibly
Retailer Elements:
•
“Play Responsibly. Remember, it’s just a game.” This
message, including the 1-800-GAMBLER hotline number,
is placed on ticket vending machines, ticket dispensers,
all point-of-sale materials, game brochures, game cards,
television advertising, print advertising, and outdoor
and transit advertising. “Play Responsibly” appears on
instant scratch-off and draw games tickets and play
slips. The message is also used in all 30-second radio
spot advertising, and the logo is used on 30-second TV
advertising.
•
The KLC’s website contains “Play Responsibly”
information accessed directly from the home page. It
also contains links to the National Council on Problem
Gambling site and the 1-800-GAMBLER site.
•
Brochures with Gamblers Anonymous questions and the
1-800-GAMBLER hotline number are placed in all retailer
play centers. Stickers with the hotline number are placed
in various point-of-sale locations in lottery retailers.
•
Retailers are required annually to sign a form
acknowledging they have been informed of the KLC’s “Play
Responsibly” program, that materials with the 1-800-GAMBLER
hotline number are permanently located in their store, and that
they are aware of the KLC’s policy regarding the prohibition of
play by anyone under the age of 18.
6/24/2013 5:44:07 PM
2014 KENTUCKY LOTTERY ANNUAL REPORT
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21
Over the course of the fiscal year the KLC
Memoriam
The year 2014 sadly marked the
passing of Mary Robinson, a member
of the Kentucky Lottery family.
Mary worked as an external sales
representative in our Madisonville
office for more than two decades.
She was known and loved by
retailers all across western Kentucky.
Mary’s work directly helped generate
millions of dollars so that some
of our state’s best, brightest and
most deserving young people could
attend college. She will be missed as
both a co-worker and friend, and this
report is dedicated to her memory.
KLC
received numerous
requests from
charitable organizations
throughout the state in
need of support. More
than 70 entities were
supported through
items such as scratchoff tickets to be given
away as door prizes or
prize packages made up
of lottery- related items
to be raffled off at silent
auctions. Feedback from
organizations has always
been very positive, with
many of them saying the
lottery donation is one of
the most popular items
of their event.
Cares For The Community
F
or many years, KLC employees have been helping our community, and FY14 was no different.
Employees continued to reach out to many in need by supporting various charitable and
community-based organizations.
During the course of the year, employees personally raised funds for local schools, Big Brothers Big
Sisters and March of Dimes, just to name a few. Since the KLC cannot directly give to charitable
causes, employees have embraced corporate fundraising campaigns for the Metro United Way and
the Fund for the Arts; approximately $60,000 was contributed by employees to these two corporate
campaigns during FY14.
In addition to financial contributions, on a quarterly basis the KLC hosts a blood drive in support of
the American Red Cross. Lottery employees donated 103 units of blood in FY14. According to the
American Red Cross, that could help save the lives of more than 300 people.
In 2006, the KLC began a program called KLCares. The program focuses on serving the community
through group volunteerism. Thanks to the generosity of KLC employees and employees at GTECH,
10 families with a total of 27 children received toys and clothes at Christmas. Employees also
collected clothes, toys and toiletries for the KLC’s neighbors at the Healing Place, along with pet
supplies that were donated to the Humane Society.
KLC Recognized
20th Straight Year
for Financial Excellence
For two straight decades, the KLC has achieved the highest
form of recognition in the area of governmental accounting
and financial reporting. The KLC was once again awarded in
FY13 with the Certificate of Achievement for Excellence in
Financial Reporting from the Government Finance Officers
Association of the United States and Canada. The award
was designed to recognize organizations which demonstrate
a spirit of full disclosure and clearly communicate their
financial story. The KLC was the second lottery in North
America to receive this award, and only one other U.S. lottery
has received this designation more often than the KLC.
Financial Statements
Kentucky Lottery Corporation
Statements of Net Position
June 30, 2014 and 2013 (dollars in thousands)
ASSETS
Current Assets:
Cash and cash equivalents Investments at fair value, current portion
Accounts receivable, net
Prepaid PowerPlay License, current portion
Other
Total current assets
Noncurrent Assets:
Investments at fair value, less current portion
Prepaid PowerPlay License, less current portion Capital assets, net Deposits with Multi-State Lottery Association Total noncurrent assets
Total assets 2013
NET POSITION
Invested in capital assets
Unrestricted
Net position
Operating revenues: Instant Games
Draw games
Less instant tickets provided as prizes
Total operating revenues Direct costs:
Prize expense Instant games
Draw games Total prize expense
Commissions to retailers Vendor expense
Ticket costs
Total direct costs
Gross profit $13,030 13,929 29,347 67 703 57,076 $16,042
14,661
28,716
67
251
59,737
Operating expenses:
Advertising and promotion Salaries, wages and benefits Contracted and professional services Depreciation Other general and administrative Total operating expenses
21,013 314 7,098 5,631 34,056 91,132 34,280
381
6,631
5,594
46,886
106,623
Operating income
LIABILITIES
Current Liabilities
Accounts Payable, accrued expenses and
compensated absences, current portion 5,094 6,262
Due to the Commonwealth of Kentucky 246
3,481
Estimated prize liability, current portion
35,239
34,386
Total current liabilities 40,579 44,129
Noncurrent Liabilities
Accrued compensated absences,less current portion 996 973
Estimated prize liability, less current portion
22,778 32,639
Total noncurrent liabilities 23,774 33,612
Total liabilities
64,353 77,741
kylottery.com
2014
Kentucky Lottery Corporation
Statements of Revenues, Expenses
and Changes in Net Position
For the years ended June 30, 2014
and 2013 (dollars in thousands)
7,098 19,681 $26,779
6,631
22,251
2014 $521,558
337,301
(15,601)
843,258
2013
$522,226
324,440
(35,829)
810,837
342,365
181,419 523,784 52,765 7,432 6,661 590,642
319,299
175,613
494,912
52,172
7,096
6,753
560,933
252,616
249,904
8,948 13,178 2,046 1,221 1,926
27,319 8,705
12,857
1,788
1,276
1,760
26,386
225,297 223,518
(226,127)
801 (2,284) 210 (227,400)
(223,808)
141
(3,217)
208
(226,676) Change in net position (2,103)
(3,158)
Net position at beginning of year
28,882
32,040
Net position at end of year $26,779 $28,882
Non-operating income (expense):
Payments to the Commonwealth of Kentucky
Investment income Interest expense
Other income Total non-operating expense
The Corporation has adopted GASB Statement 31, which requires investments
to be presented at fair value, resulting in a decrease of income of approximately
$1,571 in 2014 and a decrease of income of approximately $3,158 in 2013,
when compared to the historical cost method.
The above financial information was derived from the annual audited financial
statements. The financial audit for the year ended June 30, 2014 was performed
by Crowe Horwath, LLP. A copy of the the complete annual report can be downloaded at www.kylottery.com or obtained by writing: Kentucky Lottery Corporation,
PR Dept., 1011 W. Main Street, Louisville KY 40202 or by calling (502) 560-1677.
$28,882
2014 KENTUCKY LOTTERY ANNUAL REPORT
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23
KLC Executive Staff
Arthur “Arch” L. Gleason, Jr.,
President & CEO
Margaret “Marty” Gibbs,
Executive Vice President & COO
Howard B. Kline,
Executive Vice President & CFO
Senior Vice Presidents:
Steve Casebeer,
Marketing & Sales
Mary Harville,
General Counsel &
Corporate Secretary
Bill Hickerson,
Security
Gary Ruskowski,
Information Technology
Celebrating
25
Gale Vessels,
Internal Audit &
Information Security
years of winning
Vice Presidents:
Rick Kelley,
Finance
Kate Leverette,
Marketing
For More Information:
Headquarters and
Louisville Regional
Office:
Bob Little,
Sales
1011 West Main Street
Louisville, KY 40202
(502) 560-1500
TH Morris,
Regional Offices:
Systems Development
Chip Polston,
Communications,
Government and Public
Relations
Brenda Wilkerson,
IT Operations
Church Saufley,
Human Resources
Bluegrass
Fortune Business Center
961 Beasley Street,
Suite 110
Lexington, KY 40509
(859) 299-0684
Western
114 Madison Square Drive
Madisonville, KY 42431
(270) 825-0205
Eastern
311 North Arnold Avenue,
Suite 501
Prestonsburg, KY 41653
(606) 886-9883
KYLOTTERY.COM