RD266 - 2016 Virginia Lottery Annual Financial Report for Year Ended June 30, 2016

Executive Summary:

Virginia Lottery ticket sales totaled $2,006.9 million for fiscal year 2016, the highest total ever for Virginia Lottery sales. Net proceeds totaling $588.2 million were earned for the Lottery Proceeds Fund, all of which are constitutionally mandated to support local K-12 public education. Highlights of the fiscal year include:

• Sales increased by $163.0 million (8.8 percent) from last year to a record $2,006.9 million.

• Net income was $588.2 million, an increase of $54.4 million, a new record level.

• Prize expense increased $91.7 million (8.2 percent) to a record total of $1,208.3 million.

• With the sales increase, retailers earned $8.8 million (8.4 percent) more than last year, with compensation paid to retailers totaling a new record of $112.7 million. Retailers earned, on average, 5.6 cents on each dollar sold, the same as last year.

Although by law, the Lottery may spend up to ten percent of sales on operating costs, which include all expenses except prizes and retailer compensation, these costs represented only 4.9 percent of sales for the fiscal year.