FISCAL NOTE
FUND(S):
Lottery Fund
Sources of Revenue:
Special Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The bill as drafted will allow the Lottery to sell its TRAVEL product, a five minute KENO draw game, in its other traditional lottery locations. Currently, the product may only be sold in certain ABCA licensed, adult only environments. The program anticipates an increase in sales of approximately $3 million. After commissions, prizes, and administrative expense, the Lottery projects approximately $600,000 in additional revenue will be deposited to the Lottery Fund upon full implementation.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2014
Increase/Decrease
(use"-") |
2015
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
592,300 |
592,300 |
Explanation of above estimates (including long-range effect):
By allowing TRAVEL Keno sales at any traditional Lottery location without installing additional equipment, the Lottery projects an increase in sales of $3 million. Deducted from this gross figure are the following:
7% retailer commission
approximately 60% in player prize expense
4.23% vendor administrative fee
9.72% Lottery administrative fee, which includes advertising
After the deductions, net sales of approximately $600,000 will be deposited to the Lottery Fund.
Memorandum
The proposed legislation will NOT create any additional fees and/or expenses for licensed traditional retailers. The same licensing fees would be charged for retailers applying for a traditional lottery license. Any retailer applying for a traditional lottery license only would pay their current $50 bond fee, and those applying to be a “KENO” retail establishment will continue to pay the $100 bond fee (which covers their large wall monitor that shows the draw show and results). Only the KENO retail locations will have the large monitor for the draw show and results at their location. All others will simply be able to perform KENO transactions on their existing Lottery terminals.
This change will simply open access to the KENO product across ALL traditional lottery retail locations and subsequently increase declining revenues for this game – Creating a “KENO to Go” product.
Person submitting Fiscal Note: Kathy Lawson
Email Address: klawson@wvlottery.com