The Virginia Lottery turned a record profit for the third consecutive year, topping $400 million for the first time since the lottery's inception 16 years ago, officials announced Wednesday.
Penelope W. Kyle, the lottery's executive director, presented a large ceremonial check for $408 million to Gov. Mark R. Warner at a news conference at lottery headquarters. The Virginia Constitution requires the state to use the money for public schools.
The profit for the fiscal year that ended June 30 was 8.8 percent greater than the previous high mark of $375.2 million established a year ago. Sales increased 11.1 percent to a record $1.26 billion, the lottery said.
"In many states, lottery profits have started to tail off," Warner said. "Our lottery, through creative marketing and through hard work, has set another record."
Warner praised lottery employees for spending only 5.4 percent of its revenue on operating expenses, the lowest percentage in the agency's history. By law, the lottery can spend up to 10 percent of its revenues on administrative costs.
Kyle said a few huge Mega Millions jackpots and an increased emphasis on marketing instant scratch tickets helped drive up profits last year. Scratch tickets accounted for $630.9 million in sales, and Mega Millions brought in $132 million--both records.
The only game that showed a decrease was Cash 5, which went from $28.4 million in fiscal year 2003 to $28 million last year.
The lottery also set records in prize payouts, $720.2 million, and retailer compensation, $70.7 million. Those figures were up 12.9 percent and 12.1 percent, respectively, from the previous year.
The agency's profit easily surpassed the $385 million it had projected for state budget purposes. Warner noted that the additional $23 million will not be added to the state's $13 million year-end surplus but will go directly to public elementary and secondary schools.
An additional $13 million in prize money went unclaimed and will go the Literary Fund, which provides low-interest loans for school construction.
Maybe VA Cash 5 needs a facelift.