TABLE 1 Fiscal Year 1997 Revenues and Expenses | |
Total Revenues | $245,119,362 |
Less: Commissions to Sales Agents | (61,348,251) |
Net Revenue | 183,771,111 |
Less: Prize Costs | (92,796,572) |
Gross Profit | 90,974,539 |
Less: Operating Expenses | (19,634,096) |
Other Income | 1,416,336 |
Operating transfers to West Virginia | $72,756,779 |
Source : West Virginia Lottery Financial Statements, June 30, 1997
and Independent Auditors' Report.
Revenues of West Virginia Lottery: 1986-1997
(Figures in millions of dollars)
TABLE 2 Total West Virginia Lottery Sales | ||||
Fiscal Year | On-Line Games | Instant Games | Video Lottery | Total |
1986 | 0 | 53.0 | 0 | 53 |
1987 | 12.7 | 54.0 | 0 | 66.7 |
1988(1) | 21.9 | 34.0 | 0 | 55.9 |
1989 | 31.9 | 27.0 | 0 | 58.9 |
1990 | 43.1 | 23.9 | .023 | 67.023 |
1991 | 43.5 | 35.2 | 1.0 | 79.7 |
1992 | 45.1 | 44.4 | 3.9 | 93.4 |
1993(2) | 68.1 | 46.9 | 4.7 | 119.7 |
1994 | 84.2 | 52.5 | 5.6 | 142.3 |
1995 | 90.9 | 61.7 | 27.5 | 180.1 |
1996 | 86.4 | 76.7 | 47.2 | 210.3 |
1997 | 82.6 | 80.3 | 82.3 | 245.2 |
Total | 610.4 | 589.6 | 172.223 | 1372.22 |
(1) - Powerball began (on-line game) (2) - Keno began (on-line game)
Source: Appendix A
Graph Illustrations: Appendix B
ISSUE AREA 1: West Virginia Lottery's on-line games, 3-digit, 4-digit, Lotto,
Powerball, and Keno ranked 6th, 2nd, 18th, 5th, and 8th respectively, in average
annual percentage increase of per capita revenues among selected states.
The West Virginia Lottery operates a variety of on-line lottery games. On-line games
operate by a licensed sales agent selling tickets to the public with the use of computerized
terminals. The West Virginia Lottery then has a drawing at a designated time to determine the
winner which has the matching numbers. The three digit game began full operation in fiscal year
1987. It has been a consistent revenue source for the lottery. The average percentage annual
increase of per capita revenues since 1987 is 19.92%, which ranks sixth with the sixteen systems
compared. (See Table 3)
TABLE 3 3 Digit Game | |||
State | Beginning Year of Calculation | Annual Average % Increase/Decrease in Per Capita Revenues | Rank |
Virginia | 1989 | 119.90% | 1 |
California | 1992 | 48.63% | 2 |
Kentucky | 1990 | 42.12% | 3 |
Missouri | 1987 | 23.92% | 4 |
Georgia | 1994 | 20.40% | 5 |
West Virginia | 1987 | 19.92% | 6 |
Wisconsin | 1993 | 9.71% | 7 |
Pennsylvania | 1986 | 1.72% | 8 |
Delaware | 1986 | 1.66% | 9 |
Michigan | 1986 | 1.47% | 10 |
Ohio | 1986 | 1.27% | 11 |
District of Columbia | 1986 | .27% | 12 |
Rhode Island (1) | 1987 | -.56% | 13 |
Maine | 1986 | -.91% | 14 |
Indiana | 1991 | -1.34% | 15 |
Maryland | 1986 | -3.84% | 16 |
(1) - Rhode Island combines 3 and 4 digit revenues.
Source: Appendix A
The four digit game began full operation in fiscal year 1987. It has also been a consistent
revenue source for the lottery. The average percentage annual increase of per capita revenues
since fiscal year 1987 is 20.83%, which ranks second with the fourteen systems compared.
(See Table 4)
TABLE 4 4 Digit Game | |||
State | Beginning Year of Calculation | Annual Average % Increase/Decrease in Per Capita Revenues | Rank |
Kentucky | 1994 | 223.06% | 1 |
West Virginia | 1987 | 20.83% | 2 |
Ohio | 1986 | 11.77% | 3 |
Virginia | 1992 | 11.05% | 4 |
Pennsylvania | 1986 | 9.83% | 5 |
District of Columbia | 1986 | 9.73% | 6 |
Indiana | 1992 | 7.85% | 7 |
Delaware | 1986 | 7.50% | 8 |
Michigan | 1986 | 6.92% | 9 |
Maryland | 1986 | 3.80% | 10 |
Maine | 1986 | 3.36% | 11 |
Oregon | 1987 | 3.33% | 12 |
California | 1996 | -13.34% | 13 |
Wisconsin | 1994 | -15.88% | 14 |
Sources: Appendix A
Lotto has been in full operation since fiscal year 1987. It has had an average percentage annual per capita revenue increase of 3.38% and ranks eighteenth out of twenty-seven systems compared. This game style is the most difficult to evaluate due to the ever changing styles of lotto from system to system. The key here is that the lottery has maintained a steady revenue with lotto that has not decreased over time. (See Table 5)
TABLE 5 Lotto | |||
State | Beginning Year of Calculation | Annual Average % Increase/Decrease in Per Capita Revenues | Rank |
Nebraska | 1995 | 126.10% | 1 |
Montana | 1991 | 100.56% | 2 |
New Hampshire | 1992 | 63.83% | 3 |
Virginia | 1990 | 52.64% | 4 |
Colorado | 1989 | 46.38% | 5 |
Indiana | 1990 | 44.47% | 6 |
Iowa | 1986 | 38.78% | 7 |
South Dakota | 1994 | 34.58% | 8 |
Oregon | 1986 | 30.53% | 9 |
California | 1987 | 22.17% | 10 |
District of Columbia | 1986 | 19.55% | 11 |
Kansas | 1988 | 17.09% | 12 |
Kentucky | 1990 | 15.15% | 13 |
Idaho | 1994 | 10.77% | 14 |
Delaware | 1986 | 5.35% | 15 |
Vermont | 1986 | 4.74% | 16 |
Maine | 1986 | 3.90% | 17 |
West Virginia | 1987 | 3.38% | 18 |
Wisconsin | 1991 | 3.22% | 19 |
Missouri | 1987 | 2.89% | 20 |
Ohio | 1986 | .81% | 21 |
Michigan | 1986 | -4.65% | 22 |
Maryland | 1986 | -5.95% | 23 |
Connecticut | 1986 | -6.43% | 24 |
Georgia | 1994 | -10.18% | 25 |
Pennsylvania | 1986 | -11.30% | 26 |
Rhode Island | 1986 | -13.49% | 27 |
Sources: Appendix A
Powerball/Lotto America is a multi-state lottery system in which the lottery has been participating in since fiscal year 1988. It's revenues tend to fluctuate in relation to the jackpot size. The larger the jackpot, the higher the revenues. The per capita revenues from Powerball/Lotto America has had an average annual increase of 49.05% and ranks fifth out of eleven systems compared. (See Table 6)
TABLE 6 Powerball/Lotto America | |||
State | Beginning Year of Calculation | Annual Average % Increase/Decrease in Per Capita Revenues | Rank |
Delaware | 1991 | 57.51% | 1 |
Oregon | 1988 | 55.88% | 2 |
Indiana | 1991 | 50.96% | 3 |
Wisconsin | 1990 | 50.57% | 4 |
West Virginia | 1988 | 49.05% | 5 |
District of Columbia | 1988 | 48.59% | 6 |
Missouri | 1988 | 48.52% | 7 |
Kentucky | 1991 | 40.81% | 8 |
Rhode Island | 1989 | 38.58% | 9 |
Idaho | 1990 | 13.89% | 10 |
Nebraska | 1995 | -17.24% | 11 |
Sources: Appendix A
Keno is a game which is drawn every five minutes and played at adult environments. The lottery has been operating it since fiscal year 1993. It has had an average annual percentage per capita increase in revenues of 6.37% and ranks eighth out of the twelve systems compared. (See Table 7)
TABLE 7 Keno | |||
State | Beginning Year of Calculation | Annual Average % Increase/Decrease in Per Capita Revenues | Rank |
Massachusetts | 1993 | 435.10% | 1 |
Kansas | 1991 | 108.05% | 2 |
Georgia | 1996 | 81.36% | 3 |
New York | 1989 | 59.36% | 4 |
Maryland | 1993 | 28.63% | 5 |
California | 1993 | 20.54% | 6 |
Rhode Island | 1993 | 8.51% | 7 |
West Virginia | 1993 | 6.37% | 8 |
Oregon | 1992 | 5.14% | 9 |
Washington | 1993 | -4.84% | 10 |
Michigan | 1990 | -12.76% | 11 |
Colorado | 1992 | -16.42% | 12 |
Source: Appendix A
ISSUE AREA 2: West Virginia Lottery's instant game average annual percentage
increase/decrease of per capita revenues rank 17th with other systems
compared.
Instant games are printed tickets which the public purchases from licensed agents and
scratch off a latex material to reveal an underlying object or number which denotes whether the
ticket is a winner. Scratch-off instant tickets have been in operation since fiscal year 1986. They
have been consistent performers since the inception of the West Virginia Lottery. The
scratch-off annual average percentage per capita increase in revenues is 6.96% and rank
seventeenth out of twenty-eight systems compared. (See Table 8)
TABLE 8 Instant Games | |||
State | Beginning Year of Calculation | Annual Average % Increase/Decrease in Per Capita Revenues | Rank |
Georgia | 1993 | 636.91% | 1 |
New Mexico | 1996 | 82.76% | 2 |
Vermont | 1986 | 37.83% | 3 |
New Hampshire | 1986 | 35.57% | 4 |
Ohio | 1986 | 28.58% | 5 |
Maine | 1986 | 26.54% | 6 |
Delaware | 1986 | 24.09% | 7 |
Maryland | 1986 | 23.46% | 8 |
District of Columbia | 1986 | 20.61% | 9 |
Connecticut | 1986 | 18.16% | 10 |
Michigan | 1986 | 16.91% | 11 |
Kentucky | 1989 | 13.46% | 12 |
Rhode Island | 1986 | 8.86% | 13 |
Colorado | 1986 | 8.72% | 14 |
Oregon | 1986 | 8.01% | 15 |
Pennsylvania | 1986 | 7.29% | 16 |
West Virginia | 1986 | 6.96% | 17 |
Kansas | 1988 | 6.27% | 18 |
Wisconsin | 1989 | 4.82% | 19 |
Idaho | 1990 | 3.20% | 20 |
Iowa | 1986 | 2.87% | 21 |
Missouri | 1986 | 2.34% | 22 |
Indiana | 1987 | .99% | 23 |
Virginia | 1989 | -3.29% | 24 |
South Dakota | 1988 | -3.79% | 25 |
Nebraska | 1994 | -5.52% | 26 |
California | 1986 | -8.94% | 27 |
Montana | 1988 | -11.09% | 28 |
Sources: Appendix A
ISSUE AREA 3: West Virginia Lottery's video lottery system's average annual
percentage increase of per capita revenues ranks 3rd with other systems.
The West Virginia Lottery initiated the video lottery system in fiscal year 1990. Video
lottery is a self activated video version of lottery games which are keyboard operated. The
player places bets for the chance to be awarded credits for cash or replay as additional bets. The
video lottery per capita average annual increase in revenues is 121.94% and is ranked third out of
five systems compared. The increases are due to both increased numbers of video lottery
terminals, locations to play and increased popularity. (See Table 9)
TABLE 9 Video Lottery | |||
State | Beginning Year of Calculation | Annual Average % Increase/Decrease in Per Capita Revenues | Rank |
Delaware | 1996 | 233.72% | 1 |
Oregon | 1992 | 136.44% | 2 |
West Virginia | 1990 | 121.94% | 3 |
Rhode Island | 1994 | 60.88% | 4 |
South Dakota | 1990 | 27.63% | 5 |
Sources: Appendix A
Conclusion:
The West Virginia Lottery has a wide array of game styles to keep the revenues
consistently increasing. Video lottery shows the commission's initiative to give the public more
variety and excitement in their lottery experience. With the lottery industry consistently
changing and becoming more popular, it is easy to fall behind. But the past eleven years of the
West Virginia Lottery's revenue producing capabilities shows this not to be the case in
West Virginia. The lottery's per capita revenues have shown an increase since their
inception. Therefore, the Legislative Auditor's Performance Evaluation and Research Division
concludes that the West Virginia Lottery is performing at least average, and sometimes
above average when compared to other states.