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OREGON STATE LOTTERY

OREGON STATE LOTTERY Terminology History Net Proceeds Traditional Video Transfers Issues LOTTERY TERMINOLOGY Revenue Game Other (interest and unclaimed prizes) Prizes Net Receipts = Game Revenue Less Prizes Expense Game Operating Contingency Reserves

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OREGON STATE LOTTERY

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  1. OREGON STATE LOTTERY • Terminology • History • Net Proceeds • Traditional • Video • Transfers • Issues

  2. LOTTERY TERMINOLOGY • Revenue • Game • Other (interest and unclaimed prizes) • Prizes • Net Receipts = Game Revenue Less Prizes • Expense • Game • Operating • Contingency Reserves • Net Proceeds = Net Receipts Less Expense

  3. LOTTERY HISTORY • 1984 Created by Initiative Petition • Traditional Games • Net Proceeds Dedicated to Economic Development • 1989 Legislative Action • Created Sports Action Lottery • Authorized Video Lottery (suspended by Governor) • 1991 Legislative Action • Implemented Video Lottery, prohibited private lotteries • Dedicated 2.5% of Net Receipts to counties • 1995 Referred Measure # 21 • Added “financing public education” as allowable use • Gave lottery bonds first claim on revenue • Dedicated 15% of net proceeds to Education Endowment Fund • 1998 Initiative Petition (Ballot Measure # 66) • Dedicated 15% of net proceeds to Parks, Beaches, and Watershed Protection

  4. Lottery History (cont.) • 1999 Legislature Action • Dedicated not less than 1% of Video net proceeds to Problem Gambling • 2002 (3rd SS) Legislative Referral • Converts EDF to Education Stabilization Fund (ESF) • Lottery Dedication Increased, Conditionally • If Fund Balance < 5% of GF, 18% to ESF • Else 15% to School Capital Matching Subaccount • Allows Appropriation of Principal, Conditional • 3/5 Vote Plus Specified Economic Conditions or Emergency

  5. Traditional Lottery Games2001-02 Net Receipts $113.2 million

  6. TRADITIONAL GAME REVENUE Million

  7. TRADITIONAL GAME REVENUE

  8. VIDEO LOTTERY REVENUE Million

  9. VIDEO LOTTERY REVENUE Million

  10. TOTAL LOTTERY REVENUE Million

  11. TOTAL LOTTERY REVENUE

  12. LOTTERY TRANSFERS

  13. 2001-03 LOTTERY $680.3 Million

  14. ISSUES • Line Games • Video Payout Percentage • Retailer Compensation • Lottery Expense • Advertising

  15. Line Games • Lottery Estimate as of February 2002 • 2003-05 $80 million • 2005-07 $80 to $130 million

  16. Video Prize Percent

  17. Annual Growth: Video

  18. Video Compensation Rates • Annual Net ReceiptsRate • Up to 200,000 35% • 200,000 to 400,000 30% • 400,000 to 600,000 25% • Over 600,000 20% • Average 32%

  19. Retailer Compensation

  20. Lottery Expense Percents

  21. Sales = f(Advertising) • Sales = -276 + 106 Ln(Adv.) + • 18 PPI + 5 DV • R-square = 0.994 • F of Ln(Adv) = 22.2

  22. Lottery Advertising

  23. Implications • A $1 Increase in Advertising • Adds $14.25 to Sales • Adds $3.13 to Transfers

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