Record Lottery Revenue, But It Missed Lottery Manager's Goal
$250 million in surplus revenue; GTECH has to pay fee because net income was less than guarantee
Aug. 19, 2014
(image courtesy of Hoosier Lottery)
The company managing the Hoosier Lottery set a record for revenue in their first full year, but it fell just shy of the revenue level it guaranteed the state.
GTECH generated $250 million in surplus revenue for the state for the 2014 budget year, a 12-percent increase over the previous year - a year in which GTECH gradually assumed marketing and sales operations after being hired by the State Lottery Commission. "We're very excited," said Sarah Taylor, the lottery's executive director of the record number. However, the net income figure of $254.4 million was below the $256 million that GTECH said it would generate this year, which mean the company had to pay a portion of that amount to help keep the lottery in the black. "There is a formula for a shortfall payment, but they made the $1.6 million payment, and we are whole to the state of Indiana, Taylor said.
Overall revenue for the lottery was more than $1 billion in fiscal 2014. Taylor says that is nine-percent higher than the previous record high from the 2012 budget year. As for where the money goes, "we give $30 million annually to the police and fire pension fund, $30 million annually to the teacher retirement fund, and all other revenue is put in the Build Indiana fund, which helps offset motor vehicle excise tax," Taylor said.
GTECH's ambitious revenue goal jumps to $320 for the current budget year. Taylor isn't worried about not making it, even though a company managed by GTECH was recently fired by the Illinois Lottery for failing to meet revenue predictions in that state. "We're very pleased on how the first year ended, we are looking forward to a long term relationship," Taylor said. Indiana's contract with GTECH runs for 15 years.
The company operating the Hoosier Lottery set a record for revenue in their first full year, but it fell just shy of the revenue level it guaranteed the state.