1. Presentation to California State Lottery Commission February 16, 2017
Director’s Comments
Presentation to California State Lottery Commission February 16, 2017
Director’s Report 6A

2. Overview General Business Update Agenda Consent Calendar Item
YTD Sales Update
Audited Financial Statements
Agenda Consent Calendar Item
Scratchers® Core Game Profile Template
Agenda Action Items
Hudson Alley Contract Extension
Microsoft Enterprise Agreement
Network Maintenance Contract
Telecommunications Contract
Lottery Investment Strategy and Investment Policy
Good morning Commissioners and welcome back to Sacramento.
For today’s director’s report, I will provide our year to date sales picture
As well as a few general information items of interest
After going over the voting item agenda,
Jim Hasegawa will provide research information about who plays the lottery

3. Sales Update

4. Powerball Draw Sales

5. Launch of our Second $30 Game
First $30 game introduced as part of our 30th Anniversary Celebration
Sold $300 million last fiscal year
“California Gold” launched on Jan 23
10” x 4” ticket on holographic paper
Top prize is again at $10 million
First 3 weeks of sales were over $48 million, very close to the pace of our first $30 game

6. Audited Financial Statements
State law requires the Lottery to engage an independent firm of CPAs to conduct an annual audit
KPMG LLP conducted the FY annual audit
No material issues found in the audit
$6.276 billion in sales, $3.956 billion in prizes, and $433.0 million to retailers
$1.587 billion to California public schools and colleges
The Lottery Act (Gov’t Code section ) requires us to bring on an independent CPA firm to conduct an annual audit of the Lottery’s financial statements.
Although the Lottery’s year-end financial statements are typically audited by October 15 of each year, there was again a delay in the fiscal year financial statements being audited due to the implementation of GASB 68.
You may recall that GASB 68 significantly revised how state and local governments account for and report pensions.
Although it became effective last year, there were some unique issues related to the second year of implementation that we dealt with.
Also, to complete the GASB 68 portion of our financials, we rely on various control agencies to provide pension data.
While we received this data significantly earlier than last year, the control agencies still have some kinks to work out in this process.
KPMG conducted the audit for the fiscal year and I am pleased to say that, once again, no material issues were found.
It was another historic year for the Lottery with sales of $6.276 billion, nearly $4 billion returned to our players in the form of prizes, and $433 million provided to our retailers in commissions, cashing bonuses, and other retailer incentives. These are each the highest respective levels in the Lottery’s 31-year history.
Most importantly, we generated a total of $1.587 billion in supplemental funding for California’s public schools, which is the highest contribution in Lottery history.