The books for fiscal year 2003 are closing at the Virginia Lottery, and the big winner is Virginia`s public schools (kindergarten through twelfth grade). Lottery profits, which are dedicated by constitutional mandate to support public education (K-12) in the Commonwealth, came to more than $375.2 million for the fiscal year that ended at midnight June 30, 2003.

Virginia Lottery Executive Director Penelope W. Kyle today presented a ceremonial check in the amount of $375.2 million to Lieutenant Governor Tim Kaine, who accepted on behalf of the Commonwealth of Virginia. The presentation was made at Maury High School in Norfolk.

"I commend the Lottery for their commitment to Virginia`s public schools," said Lieutenant Governor Kaine. "It cut costs, streamlined operations and is contributing a record amount to help meet the needs of our students and teachers. Lottery employees have made it a priority to put education first."

"This is an incredible number for us," said Kyle, who is also president of the Mega Millions Consortium. "The Lottery workforce had many goals throughout the year, but none more important than raising the maximum amount of money for Virginia`s public schools."

That performance has not gone unnoticed among Virginia`s educators.

"Norfolk Public Schools received $5.6 million in lottery funds," said Superintendent Dr. John O. Simpson. "Our district has taken advantage of the flexibility attached to this money to fund important initiatives such as elementary school teacher planning time and to augment capital improvement efforts like the construction of our new Norview High School."

"Funds from the Lottery have been a lifesaver for us," said Dr. Timothy Jenney, superintendent of Virginia Beach City Public Schools. "The money in recent years has allowed us to accelerate the renovation process for 17 of our elementary schools."

"We are delighted that Lt. Gov. Kaine and Penny Kyle are making the formal presentation of these funds here in Norfolk," said Norfolk Mayor Paul D. Fraim. "This funding is confirmation of the importance placed on education, and it will provide the Norfolk School System and schools throughout our Commonwealth much needed financial help as we all work together to provide our children with the best possible education."

RECORD SALES:

With the support of millions of players, the sales of Lottery tickets hit an all-time high. "There is no question that our players love Lottery games, and this year they told us that once again, purchasing more that $1 billion of Lottery products for the third consecutive year," said Kyle. The number represents a 2.5% increase from Fiscal Year 2002, which was a record at the time. Virginia`s public schools receive approximately one-third of the Lottery`s gross sales. That amount is shared by all Virginia schools districts.

"In Chesterfield County, Lottery funds help us service capital debt," said Chesterfield County Superintendent Dr. Billy Cannaday. "We have also used Lottery funds to support our efforts to recruit and retain highly qualified teachers."

Total Virginia Lottery sales for fiscal year 2003 came to $1,135,729,104. The sales figure is more than $27.6 million higher than last year, which was a record at the time.

Bedford County Public Schools Superintendent Dr. Jim Blevins says the funds received by his district are put to good use. "We have used our Lottery funds to create remedial learning programs during the school year and in summer school to increase SOL scores significantly," he said. "Lottery funds have helped us as we continue to meet all state requirements."

SCRATCH TICKETS REVEAL SUCCESS:

Virginia Lottery instant (scratch) tickets caught the eyes and interest of players who saw more than a million reasons to play. Scratch ticket sales were $543.4 million, surpassing last year`s record by more than $50 million.

"Scratch tickets in recent years have really become a hallmark product for the Virginia Lottery," said Virginia Lottery Board Chair Virginia Hall. "In my hometown of Danville, I know many of our Lottery retailers who are pleased with the incredible diversity of scratch tickets that the Lottery offers."

The Lottery`s Harley-Davidson(r) scratch game kick-started sales of scratch tickets, as players vied for cash prizes or a 100th anniversary classic edition Harley-Davidson(r) motorcycle.

"The prospect of a new Harley-Davidson(r) in the driveway spurred many people who had not previously played the Lottery to take a chance," said Ms. Hall.

Imagine winning $1000 per week for the rest of your life. Anthony Hart knows what it is like. He scratched to win that prize when he was home from college on spring break. Not bad, for the tender age of 21. The idea caught on as players made the Virginia Lottery`s Win For Life scratch game one of the year`s most popular. Win For Life, along with the Harley-Davidson(r) game and more than 50 other interesting scratch games helped fuel a 10.4% increase in scratch ticket sales.

PICK 4 PLAYERS PICK MORE:

Virginia Lottery players continue to show interest in the Lottery`s portfolio of daily games. In FY2003 the Lottery`s twice-daily Pick 4 game garnered extraordinary play as sales for that game hit a record.

"We believe many new folks are now playing Pick 4 because the game offers a top prize of $5000 twice daily," said Kyle. "Pick 4 sales have increased every year since the game began in 1991."

In addition to record Pick 4 sales, the Lottery`s other daily games, Pick 3 and Cash 5 continue to show strong sales.

RECORD FOR RETAILERS:

Folks who visit the Ninth Street Grocery in Roanoke know Bill Anderson as the friendly owner who cares about his customers and business. Lottery officials know him and all the other Virginia Lottery retailers in the Commonwealth as retail partners.

"We emphasize the lottery here at Ninth Street Grocery because it`s a valued part of our operation," said Mr. Anderson. "Prizes go to our players, commissions help my bottom line and Lottery profits help education. We consider that process win-win-win."

Ninth Street Grocery sits in the Roanoke City Public School District, which in 2003 spent lottery funds primarily on teacher salaries and also debt service on school construction.

The approximately 5000 Virginia Lottery retailers collected a record $63 million in commissions from Lottery games, which is an increase of 1.2% from fiscal year 2002.

It may be difficult to believe, but more than $12.3 million in prizes went unclaimed in FY2003. All unclaimed Virginia Lottery prizes go to the Literary Fund, which is used solely for educational purposes such as school construction, renovation, and teacher retirement funding. The Commonwealth also benefited from $675,355 recovered from winners through Virginia`s debt set-off program. That money was deducted from prizes won by people with outstanding debts to the Commonwealth.

A RECORD LOW: ADMINISTRATIVE COSTS

The successes of fiscal year 2003 were achieved while the cost of running the Lottery was kept to the lowest percentage in its history: just 6.1% of sales. The Lottery`s cost saving measures fell in line with moves by all state agencies to reduce operating costs in challenging fiscal times. The Lottery identified innovative ways to reduce costs for special dvents, publishing and streamlining Lottery ticket sales and delivery methods. The savings led to $4.5 million that went to the Lottery`s bottom line. By law, the Virginia Lottery is allowed to spend up to 10% of sales on administrative costs. However, by utilizing a variety of cost-saving measures and business practices, the Lottery was able to operate well below that ceiling.

"By running the Lottery for slightly more than 6 cents on the dollar, the Lottery was able turn over more money to our public schools," said Kyle. "All Virginians, even those who don`t play the Lottery, can be proud of that."

LOOKING AHEAD:

As the 2004 fiscal year begins, Virginia Lottery employees begin the task of building on the success of 2003, as well as a tradition that includes more than $4.5 billion raised by the Lottery for the Commonwealth of Virginia since the first ticket was sold in 1988.

"While this is a notable accomplishment for the Lottery, it should not overshadow the fact that Virginia has not met its promise to fully fund our public schools. Virginia must commit to providing the resources our students need to excel," said Kaine.

"We have our work cut out for us," said Kyle. "Each year the Lottery`s goal is to earn more money for Virginia`s public schools than we did the preceding year. $375 million has become the new benchmark that we will strive to exceed in fiscal year 2004."