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Virginia Lottery turns over more than a half-billion dollars to education

Aug 19, 2015, 9:05 am

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Virginia Lottery

For just the second time in its history, the Virginia Lottery has delivered more than a half-billion dollars to Virginia's K-12 public schools in a single fiscal year.  The Lottery announced today that profits for the 2015 fiscal year totaled nearly $534 million.

It wasn't just education in the Commonwealth that benefited. Players raked in a record $1.1 billion in prizes during the year, and retailers selling Virginia Lottery tickets earned nearly $104 million in commissions — a record. Many of those approximately 5,300 retailers are small independent businesses.

By law, every dollar of Lottery profits benefits K-12 education in the Commonwealth. Lottery profits make up approximately 8 percent of Virginia's K-12 education budget.

"With a combination of hard work by our team, sound business practices, new and exciting games and promotions, and, of course, a bit of luck, we increased our total sales for the year to more than $1.84 billion," said Virginia Lottery Executive Director Paula Otto. "That's good news for our schools and all Virginians, whether they play the Lottery or not."

The increase in total sales was driven by sales of Scratcher tickets, which surpassed $1 billion for the first time in a single fiscal year in Virginia.

"Many people don't realize that it's not those headline-grabbing Mega Millions and Powerball jackpots that make up the largest part of our sales," said Ms. Otto.  "It's the quiet and steady sales of Scratcher games. And this year we're proud to have broken the billion-dollar mark in that category for the first time in our history."

Along with schools, Virginia Lottery players won big in FY15. The Lottery paid out a record $1.1 billion in prizes. That includes the year's biggest winner, Andy Ciaccio of Herndon, who won $5 million with a Mega Millions ticket he bought in Warrenton. A total of 28 tickets won at least $1 million during the year. That's not including tickets winning a $1 million annuity where the winner elected to take a smaller cash option. Among the million-dollar winners was a Mega Millions ticket split by an office pool of eight people in Harrisonburg. That office pool is now known as the "Awesome Eight."

One of the most exciting times for Lottery players, retailers and employees is when the jackpot gets really large. That happened when the Powerball jackpot grew to $564 million for the February 11 drawing. Eleven tickets in Virginia each won $10,000 in that drawing. Sales of Powerball tickets in the Commonwealth from that jackpot alone generated $14.4 million in profit.

"While it's exciting to see those players who've been incredibly lucky, the fact is that a very large number of people win smaller amounts," said Ms. Otto. "Overall, 60 cents on the dollar goes right back to players in the form of prizes."

During the year, the Lottery's sales staff continued working to increase the number of retailers offering Lottery tickets to their customers. Stores benefit by earning a 5 percent commission for every ticket sold, a 1 percent cashing bonus for all prizes redeemed, various sales incentives and a bonus for selling tickets that win prizes of $20,000 or more. In addition, while that lottery jackpot may bring customers in the door, those customers often end up making other purchases as well.

The Lottery also continued its strategy of working to increase its customer base. Almost one-third of adult Virginians play at least one Lottery game in a typical month.

"Growing the number of people who play the Lottery in Virginia is more than just good business; it's the socially responsible way to build sales," said Ms. Otto. "We'd rather see a larger number of people buying a few tickets each, than the same people playing more."

There's one number that the Lottery worked to keep as low as possible: the cost of running the organization. In FY15, that number was kept to just 4.9 percent of sales, which is far below the 10 percent allowed by state law. The Lottery operates entirely on money generated by sales, not tax dollars.

During the year, the Lottery introduced new draw games like $1,000,000 Money Ball and Cash4Life®. Dozens of new Scratcher games were launched like $100,000 Home Changer, which featured a unique partnership with The Home Depot® for home makeover prizes, and 7-Eleven, a Scratcher game created in partnership with 7-Eleven stores that offered a top prize of $711 per day for a year.

Innovative promotions like eXTRA, in which players can enter non-winning tickets for the chance to win great prizes, have helped the Lottery change the perception from those "traditional" lottery games. The Lottery also continues to make extensive and innovative use of its website and social media channels to give players new ways to win prizes.

"It's all fun and games, but there's a much larger purpose," said Virginia Lottery Board Chairman Fred Helm. "The Lottery exists for one reason only: To help generate funds for education in Virginia. That's why the Lottery's mission is 'Contributing to Virginia's future, one play at a time.'"

There's one other way in which the Lottery contributes to education in the Commonwealth, and it may surprise some people. In FY15, more than $12.4 million in Virginia Lottery prize money went unclaimed by the winners.  By law, the Virginia Lottery gives all unclaimed prize money to the state's Literary Fund, which is used solely for educational purposes, such as upgrading technology in schools and teacher retirement funding.

In addition, the Lottery continued its acclaimed Super Teacher Awards, in which outstanding Virginia K-12 public school teachers are recognized in surprise presentations at their schools. The Super Teacher Awards consist of a $2,000 cash prize for the teacher and a $2,000 classroom credit from the Supply Room Companies. Along with the Virginia PTA, the Lottery presents the awards to eight teachers statewide.

In another unique way the Lottery benefits the Commonwealth, more than $1.8 million in unpaid taxes, fines and child support were collected from prizes. The Lottery partners with Virginia's Department of Taxation as part of the Set-off Debt Collection Act.

In the coming year, the Lottery plans to roll out new games, exciting promotions and unique ways of engaging with a new generation of Virginians.

"The Lottery has built a reputation over nearly 27 years for fun, innovation and integrity," said Ms. Otto. "Since 1999 we've generated more than $7.2 billion for K-12 public education in Virginia. The Lottery's employees across the Commonwealth are immensely proud of that."

In 2015, the Virginia Lottery was named a Top Workplace by the Richmond Times-Dispatch.

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