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Florida Lottery Overview

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Florida Lottery's History. In 1986, Florida voters approved the ... If the Lottery were a private company, it would rank #5 in the state of Florida. ... – PowerPoint PPT presentation

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Title: Florida Lottery Overview


1
Florida Lottery Overview
Florida Taxation Budget
Reform Commission Government Services
Committee November 1, 2007
Charlie Crist Governor
Leo DiBenigno Secretary
2
Florida Lotterys History
  • In 1986, Florida voters approved the
    constitutional amendment authorizing the
    lotterys creation (64 support, 36
    against).
  • The Department was established as a state agency
    in 1987 with the enactment of the Florida Public
    Education Lottery Act.

The first Florida Lottery ticket went on sale
January 12, 1988. First week sales exceeded 95
million!
Florida Lottery Page 1
3
Florida Lotterys Mandate
  • . . . to operate the state lottery. . . so as
    to maximize revenues for the Educational
    Enhancement Trust Fund in a manner consonant
    with the dignity of the state and the welfare of
    its citizens.
  • (Section 24.104, Florida Statutes)

Florida Lottery Page 2
4
Legislative Intent
  • That the lottery games be operated by
  • a department of state government that functions
    as much as possible in the manner of an
    entrepreneurial business enterprise.
  • (Section 24.102, Florida Statutes)

Florida Lottery Page 3
5
Statutory Exemptions
  • Chapter 24, Florida Statutes, exempts the
    Florida Lottery from the procurement guidelines
    described in Chapter 287 and personnel provisions
    in Chapter 110.

Florida Lottery Page 4
6
Entrepreneurial Success
Publix Supermarkets, Inc. JM Family
Enterprises, Inc. Southern Wine Spirits of
America Adventist Health System Florida
Lottery Brightstar Corporation

If the Lottery were a private company, it would
rank 5 in the state of Florida. Statistical
Source Florida Trend
Florida Lottery Page 5
7
Americas Top Corporations
Florida Lottery Page 6
8
National Ranking
From the New York Times, October 2007 . . .
Florida and California Lotteries have nearly
the same profit, even though California has twice
the population.
  • Justification Review
  • December 2004 by OPPAGA
  • . . Based upon four key performance measures
  • 1. Total transfers to the state
  • 2. Transfers to the state as a percentage of
    lottery revenue
  • 3. Per capita transfers
  • 4.Total expenses as a percentage of total
    transfers
  • the Florida Lottery ranks first in the nation.

Florida Lottery Page 7
9
Two-Fold Strategy

Greater Profits(EETF Transfers)
Florida Lottery Page 8
10
Comparison Sales
The Florida Lottery is ranked among the top five
in the domestic industry for total sales and top
15 for weekly per capita sales.

New York Lottery Massachusetts Lottery Florida
Lottery Texas Lottery California Lottery
In Billions
Florida Lottery Page 9
11
Total Net Sales
Florida Lottery Page 10
12
Net Sales from On-line Products
Florida Lottery Page 11
13
Net Sales from Scratch-Off Products
Florida Lottery Page 12
14
Larger Retailer Network
  • The Lottery continues to increase the number of
    Lottery retailers throughout the state.

Florida Lottery Page 13
15
Total Expenses
Operations 2
Prizes 59
EETF 31
Vendors 2
Retailers 6
Operations includes advertising, staff and all
office operations.
Operations includes advertising, staff and all
office operations.
Florida Lottery Page 17
Florida Lottery Page 14
16
Measuring Business SuccessThrough Employee
Efficiency
FY 2007 Contributions Per Employee
  • 1.26 Billion (EETF)
  • 440 Employees
  • 2.86 Million

11.3 Billion (Profit) 1.9 Million
Employees 5,947


Source Americas Largest Corporations, Fortune
500 magazine, April 30, 2007
Florida Lottery Page 15
17
Measuring Business SuccessThrough Profitability
FY 2007 Profits As a Percentage of Revenue
  • Revenue - 4.10 Billion
  • Profit - 1.26 Billion
  • 31

Revenue - 347.25 Billion Profit - 39.50
Billion 11
Source 20 Most Profitable Companies, Fortune
500 magazine, April 30, 2007
Florida Lottery Page 16
18
Lottery Structures
Of the 43 domestic lotteries, 40 are state
agencies and three are publicly-chartered
corporations. There are no U.S. lotteries that
are privately run at this time.
Florida Lottery Page 17
19
Looking Forward
  • Strengths
  • Flexible prize payout authority
  • Promotional capabilities thru On-line gaming
    system
  • Increased growth potential (up to 20,000 On-line
    terminals)
  • Reduction in costs, and possible added revenue,
    thru patent authority and
  • New Scratch-Off vendor contract.

Florida Lottery Page 18
20
Looking Forward
  • Weaknesses
  • Slower growth rate
  • Low market penetration
  • Low advertising budget
  • FLORIDA LOTTO slumping sales
  • Heavy reliance on jackpot rollovers and
  • Inability to replace aging infrastructure without
    legislative authority.

Florida Lottery Page 19
21
Looking Forward
  • Opportunities
  • Increase On-line sales and EETF transfers thru
    flexible prize payouts
  • Increase retailer base to improve market
    penetration
  • Offer new or enhanced game options
  • Maintain a competitive advantage in key areas
    and
  • Reintroduce ITVMs to increase Scratch-Off sales
    and market penetration.

Florida Lottery Page 20
22
Looking Forward
  • Threats
  • Insufficient advertising funding
  • Competition with expanded gambling in and around
    Florida
  • Policy constraints conflict with legislative
    intent, limiting the Lotterys ability to operate
    in the manner of an entrepreneurial business
    enterprise.
  • Annual authorization to update aging
    infrastructure
  • Inability to reinvest achieved efficiencies for
    future growth
  • Inability to support retail-industry
    trends/processes, limiting access to major retail
    chains.

Florida Lottery Page 21
23
Thank You
Leo DiBenigno Secretary
Charlie Crist Governor
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