1. California State Lottery Commission
Proposed
Fiscal Year Budget
Presentation to
California State Lottery Commission
June 21, 2018
Item 9(e)

2. (Dollars in Thousands)
FISCAL YEAR
PROPOSED BUDGET
(Dollars in Thousands) FY FY
Year-End
% of
Proposed
Estimate
Sales
Budget
Difference
SALES:
Scratchers
$5,066,000
72.8 %
$5,150,000
72.6
$84,000
Powerball
543,000
7.8
513,000
7.2
(30,000)
Mega Millions
432,000
6.2
467,000
6.6
35,000
SuperLotto Plus
264,000
3.8
275,000
3.9
11,000
Hot Spot
286,000
4.1
310,000
4.4
24,000
Fantasy 5
168,000
2.4
173,400
5,400
Daily 3
149,000
2.1
151,400
2,400
Daily 4
30,000
0.4
30,200
200
Daily Derby
18,000
0.3
20,000
2,000
TOTAL, ESTIMATED SALES
$6,956,000
$7,090,000
$134,000 %
PRIZE EXPENSE:
$3,561,398
70.3
$3,625,600
70.4
$64,202
271,500
50.0
256,500
(15,000)
216,000
233,500
17,500
132,000
137,500
5,500
183,040
64.0
198,400
15,360
84,000
86,700
2,700
Other Daily Draw Games
98,106
49.8
100,397
2,291
2nd Chance - Scratchers
5,200
2nd Chance - Draw Games
3,900
Prize Expense Savings
(40,000 )
(50,000)
(10,000)
TOTAL, PRIZE EXPENSE
$4,515,144
64.9
$4,597,697
64.8
$82,553
NET SALES AFTER PRIZE EXPENSE
$2,440,856
$2,492,303
$51,447
ADMINISTRATIVE EXPENSES:
Sales
Retailer Compensation:
Commission
$410,071
5.9
$418,310
$8,239
Cashing Bonus
40,699
0.6
44,710
4,012
Special Handling
29,309
31,607
2,298
Incentives
2,968
0.0
4,328
0.1
1,359
Gaming Costs:
Gaming Contract (IGT)
113,016
1.6
107,345
1.5
(5,671)
Administrative Retailer Fees
(20,984
(21,749)
(765)
Gaming Monitor Fees
(556
(564)
(8)
Scratchers Ticket Costs
33,785
0.5
40,000
6,215
Scratchers Delivery and Support Costs
7,141
7,468
326
TOTAL, RETAILER & GAMING COSTS
$615,449
8.8
$631,455
8.9
$16,006
Operating Costs:
Personal Services
$92,275
1.3
$104,177
$11,902
Marketing Program
81,431
1.2
82,046
615
Contractual Services
18,129
22,086
3,957
Depreciation
18,394
19,145
751
Operating Expense
18,059
21,954
3,895
Reserve for Insurable Risk
5,000
Administrative Spending Reserve
35,837
Subtotal, Operating Costs
$228,287
3.3
$290,245
$61,958
TOTAL, ADMINISTRATIVE EXPENSES
$843,736
12.1
$921,700
13.0
$77,964
CONTRIBUTION TO EDUCATION
$1,597,120
$1,570,603
($26,517)
Unclaimed Prizes
Interest Income
8,131
TOTAL AVAILABLE FOR EDUCATION
$1,640,251
$1,613,734
($26,516)
WITH RESERVES
$1,654,571
$14,321
Attachment I
Proposed Fiscal Year
Budget

3. Sales FY 2017-18 FY 2018-19 Year-End % of Proposed Estimate Sales
Budget
Difference
SALES:
Scratchers
$5,066,000
72.8 %
$5,150,000
72.6
$84,000
Powerball
543,000
7.8
513,000
7.2
(30,000)
Mega Millions
432,000
6.2
467,000
6.6
35,000
SuperLotto Plus
264,000
3.8
275,000
3.9
11,000
Hot Spot
286,000
4.1
310,000
4.4
24,000
Fantasy 5
168,000
2.4
173,400
5,400
Daily 3
149,000
2.1
151,400
2,400
Daily 4
30,000
0.4
30,200
200
Daily Derby
18,000
0.3
20,000
2,000
TOTAL, ESTIMATED SALES
$6,956,000
$7,090,000
$134,000

4. Prize Expense FY 2017-18 % FY 2018-19 Year-End Proposed Estimate
Budget
Difference
PRIZE EXPENSE:
Scratchers
$3,561,398
70.3 %
$3,625,600
70.4
$64,202
Powerball
271,500
50.0
256,500
(15,000)
Mega Millions
216,000
233,500
17,500
SuperLotto Plus
132,000
137,500
5,500
Hot Spot
183,040
64.0
198,400
15,360
Fantasy 5
84,000
86,700
2,700
Other Daily Draw Games
98,106
49.8
100,397
2,291
2nd Chance - Scratchers
5,200
2nd Chance - Draw Games
3,900
Prize Expense Savings
(40,000 )
(50,000)
(10,000)
TOTAL, PRIZE EXPENSE
$4,515,144
64.9
$4,597,697
64.8
$82,553
NET SALES AFTER PRIZE EXPENSE
$2,440,856
$2,492,303
$51,447

5. Administrative ExpensesFY
Sales FY
Year-End
Proposed
ADMINISTRATIVE EXPENSES:
Estimate
Budget
Difference
Retailer Compensation:
Commission
$410,071
5.9 %
$418,310
$8,239
Cashing Bonus
40,699
0.6
44,710
4,012
Special Handling
29,309
0.4
31,607
2,298
Incentives
2,968
0.0
4,328
0.1
1,359
Subtotal, Retailer Compensation Costs
$483,047
6.9
$498,955
7.0
$15,908
Gaming Costs:
Gaming Contract (IGT)
113,016
1.6
107,345
1.5
(5,671)
Administrative Retailer Fees
(20,984 )
(21,749)
(765)
Gaming Monitor Fees
(556
(564)
(8)
Scratchers Ticket Costs
33,785
0.5
40,000
6,215
Scratchers Delivery and Support Costs
7,141
7,468
326
Subtotal, Gaming Costs
$132,402
2.2
$132,499
$98
TOTAL, RETAILER & GAMING COSTS
$615,449
8.8
$631,455
8.9
$16,006
Operating Costs:
Personal Services
$92,275
1.3
$104,177
$11,902
Marketing Program
81,431
1.2
82,046
615
Contractual Services
18,129
0.3
22,086
3,957
Depreciation
18,394
19,145
751
Operating Expense
18,059
21,954
3,895
Reserve for Insurable Risk
5,000
Administrative Spending Reserve
35,837
Subtotal, Operating Costs
$228,287
3.3
$290,245
4.1
$61,958
TOTAL, ADMINISTRATIVE EXPENSES
$843,736
12.1
$921,700
13.0
$77,964

6. SUMMARY OF FUNDING NEEDS BY OBJECTIVE (Dollars in Thousands)
Fiscal Year
SUMMARY OF FUNDING NEEDS BY OBJECTIVE
(Dollars in Thousands)
Attachment II
Objective
Positions
Cost
Create significant sales growth in Jackpot Games and Hot Spot $ 75
Improve the customer experience for players, retailers, and internal customers
30.0
3,174
Elevate perceptions about the Lottery to grow the future player base
455
Additional Personal Services, Operating Expenses, and Capitalized Items
3.0
1,106
Total FY Initiatives and Other Revisions
33.0
4,810

7. Distribution of Administrative Expenses
Fiscal Year

8. Contribution to EducationFY FY
Year-End
Proposed
Estimate
Budget
Difference
CONTRIBUTION TO EDUCATION
$1,597,120
$1,570,603
($26,517)
Unclaimed Prizes
35,000
Interest Income
8,131
TOTAL AVAILABLE FOR EDUCATION
$1,640,251
$1,613,734
($26,516)
WITH RESERVES
$1,654,571
$14,321