BuSiNeSS PlAN - California Lottery

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Figure 4.8 – California Fig. 5.8 California Draw Game Sales: 1998-2006 1998–2006$1.6$1.62$1.53$1.71 $1.71$1.57$1.60$1.56$1.62$1.4$1.40$1.2Total Sales in Billions$1.0$0.8$0.6$0.4$0.2$01998 1999 2000 2001 2002 2003 2004 2005 2006Figures 4.7 and 4.8 show that draw game sales across the lotteryand California industry have been relatively flat over the last 10 years.Reliance on Lotto GamesOf the ten most populousstates, California is significantlymore reliant onlotto game sales. This hascertain disadvantagesbecause lotto game salesare subject to jackpot fluctuationand jackpot fatigue.Figure 4.9 shows that, of the ten most populous states, California is significantlymore reliant on lotto game sales. This has certain disadvantages becauselotto game sales are subject to jackpot fluctuation and jackpot fatigue.FigureFig.4.95.9 Performance– Performanceof Lotto Gamesof Lottoand Multi-StateGames andGamesMulti-State as Games a Percentage as a of Percentage Overall Sales of Overall SalesFiscal Fiscal year Year 2005–06 Comparison of of Ten Ten Most Most Populous Populous States States35%30%25%20%15%10%5%0%CA FL* IL PA NJ OH TX NY MI GA* Florida does not participate in Mega Millions or PowerballSource: La Fleur’s 2007 World Lottery Almanac– 50 –California Lottery 2007–2010 Business Plan
Pursuant to section 8880.64 of the Lottery Act, the CSL has supplementedScratchers prizes because it has proven to return $2 to our beneficiaryfor every $1 invested. On a marginal cost basis, both SuperLOTTO Plusand MEGA Millions can operate on 8% of their sales, leaving an identical8% of sales within the CSL’s 16% administrative spending allowance.Consequently, each game leaves about 8% of sales which can beallocated for Scratchers prizes. So if SuperLOTTO Plus and MEGAMillions fail to perform as expected, the CSL suffers a double hit: (1) welose the sales from the lotto sales shortfall, and (2) we lose the 8% ofsales that is used for Scratchers prizes.Accordingly, a 10% drop in lotto game sales causes a disproportionatelylarger drop in sales and contributions to education. With the uncertaintyassociated with projecting lotto game sales, the negative impacts areeffectively compounded, subjecting the CSL to unpredictable swingsin revenue.Daily Numbers Games AssessmentWhile lotto games comprise the large majority of the CSL’s draw gamesales, its daily games are relatively weak when compared to the industryas shown in Figure 4.10.Figure 4.10 – Performance of 3-Digit and 4-Digit NumbersGames Fig. as 5.10 a Performance Percentage of 3-digit of Overall and 4-digit Sales Numbers Gamesas a Percentage of Overall SalesFiscal Year 2005–06 Comparison of Ten Most Populous StatesFiscal Year 2005–06 Comparison of Ten Most Populous States35%30%25%20%15%10%5%0%MI NJ OH GA IL NY PA FL TX* CA** State has no 4-digit numbers gameSource: La Fleur’s 2007 World Lottery AlmanacCalifornia’s daily numbers game, Daily 3, accounts for a very smallpercentage of overall sales, at 4% of total sales. In sharp contrast,7 of the 10 state lotteries shown in Figure 5.10 have numbers gamessales which exceed 20% of total lottery sales.California Lottery 2007–2010 Business Plan – 51 –
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CommissionersJOHN MASS, of Los Ange
Page 6 and 7:
Introduction
Page 8 and 9:
IntroductionIn order to fulfill the
Page 10: focus on huge jackpots and more foc
Page 14 and 15: Figure 1.2 - 2004-05 K-12 Percent o
Page 16 and 17: 1.1% General Operating ExpensesGene
Page 18 and 19: SupermarketsAlthough supermarkets h
Page 20 and 21: handles all Spanish language advert
Page 22 and 23: Fantasy 5Value Proposition: The bet
Page 24 and 25: 1.6 Organizational Structureof the
Page 26 and 27: ITSD consists of four offices and t
Page 30 and 31: Integrity,Security,Honesty,and Fair
Page 32: The CSL not only employsinternal au
Page 35 and 36: Since its inception, the CSL has wo
Page 37 and 38: Last year, the California Problem G
Page 39 and 40: Marketanalysis
Page 41 and 42: EthnicityThe following charts show
Page 43 and 44: GenderThe household incomeof past m
Page 45 and 46: 3.2 Consumer ProductSales Compariso
Page 47 and 48: Technology TrendsAll of these techn
Page 49 and 50: are large, to maintain sales in lot
Page 51 and 52: IntroductionIn FY 05/06, the CSL re
Page 53 and 54: Figure 4.2 is a list of some of the
Page 55 and 56: Figure 4.4 - Overall PRIZE PAYOUTS
Page 57 and 58: Figure 4.5 shows that in terms of p
Page 59: Raffle GamesRaffle-style games are
Page 63 and 64: Fig. 5.12 CSL Scratchers Game Growt
Page 65 and 66: As shown in Figure 5.13, the lotter
Page 67 and 68: Fig. 5.15 Sales per RetailerFigure
Page 69 and 70: etailers with special “Check-a-Ti
Page 71 and 72: Gaming System ComplexityThe CSL’s
Page 73 and 74: Fig. 5.19 Budgeted Per Capita Adver
Page 75 and 76: There is an opportunity to reverse
Page 77: Public Relations and OutreachOur fr
Page 80 and 81: Ticket Dispenser RestrictionsThe re
Page 82 and 83: IntroductionA careful analysis of o
Page 84 and 85: Unfortunately, increasing jackpot s
Page 86 and 87: Key StrategicInitiatives
Page 88 and 89: Shift the Jackpot ParadigmOur strat
Page 90 and 91: 12. Recruit Non-traditional Retaile
Page 92: www.calottery.com600 North 10th Str
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