Powerball helps boost lottery's fiscal year profits

The New Mexico Lottery announced record profits of $40.8 million on net sales of $147.1 million for the fiscal year ending June 30.

This was despite a decline in net ticket sales of .6 percent, or $900,000, due to a drop in sales for the Scratcher, Roadrunner Cash and the discontinued 4 This Way! games.

Lottery profits were up by $5.98 million, or 17.2 percent, from last year's total of $34.8 million. In fiscal year 2008, the lottery returned an average of 27.61 percent to state coffers, fulfilling a legislative mandate to return 27 percent per month of gross revenues starting July 1, 2007.

Content Continues Below

To gain that rate of return, the lottery made operational cuts that included reducing staff, eliminating retailer and sales staff incentives, reducing the Scratcher prize expenses and cutting the advertising budget by about $800,000. The cuts totaled $6.5 million.

Net ticket sales were $147.1 million, down from $148 million in the previous year. Scratcher sales generated record sales in 2007 with $91.4 million, then dropped 5.2 percent in 2008 to $86.6 million. Scratcher players claimed $53.8 million in prizes, representing about 62 percent of Scratcher ticket sales.

Powerball sales totaled $44.5 million, up from $42.6 million. Hot Lotto sales were $6 million, up from $3.5 million. Roadrunner Cash sales generated $6.5 million, down from $7.9 million. Pick 3 sales totaled $2.3 million, up from $2 million. The 4 This Way! game, which was discontinued in October, generated sales of $216,000, a big drop from the previous year when they reached $653,000.

A special New Year's Eve Raffle brought in $1 million in sales.

The Powerball game rang up several large jackpots over the year, which stimulated sales, said Tom Romero, NM Lottery CEO.

"Without those run-ups, our sales and profit situation would have been completely different," he said.

Romero said this was the lottery's most challenging year since it started in 1996.

Players claimed $23.4 million in prizes in 2008, with two New Mexico residents winning Hot Lotto jackpots.

Since 1996, the lottery has raised $361.7 million for education and more than 50,000 New Mexico students have attended college on Legislative Lottery Scholarships. Of that total, about $66.5 million was used for public school construction.

Starting in January, the lottery must return at least 30 percent of its gross revenues a month to the scholarship program. Officials say a transition to a new vendor will be instrumental in achieving this. In November, the lottery will upgrade its network of 1,100 retailers to a new gaming and communications system provided by Intralot, based in Greece with U.S. headquarters in Georgia.

Intralot won the contract after a competitive bidding process that included the then-current holder of the Lottery contract, Gtech Holdings Corp.

Over the seven-year contract, the lottery will pay Intralot a base price of 1.5 percent, or $18.2 million, on projected total net sales of $1.15 billion. If it achieves those sales, the lottery will save about $35.4 million over its existing contract rates.