Arizona State Lottery,
A Component Unit of
the State of Arizona
Financial Statements as of and for the
Year Ended June 30, 2009, Supplemental
Schedule for the Year Ended June 30, 2009,
and Independent Auditors’ Report

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
TABLE OF CONTENTS

Page
INTRODUCTION SECTION — Letter of Transmittal

i–ii

INDEPENDENT AUDITORS’ REPORT

1–2

MANAGEMENT’S DISCUSSION AND ANALYSIS

3–6

FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2009:
Statement of Net Assets

7

Statement of Revenues, Expenses, and Changes in Fund Net Assets

8

Statement of Cash Flows

9

Notes to Financial Statements
SUPPLEMENTAL SCHEDULE FOR THE YEAR ENDED JUNE 30, 2009 —
Schedule of Gross Profit by Game for Games Expiring During the Year

10–14
15
16–21

January 15, 2010

Dear Arizona Lottery Commissioners:
The Arizona Lottery is pleased to submit its audited financial statements as of and for the year
ended June 30, 2009, as prepared by the Lottery Accounting Department and audited by
Deloitte & Touche LLP. The Lottery is responsible for the accuracy and completeness of all data
and disclosures in this report. To the best of our knowledge, the information presented is
accurate and complete in all material respects and fairly depicts the financial position of the
Arizona Lottery. This report includes a statement of net assets of the Arizona Lottery, the related
statement of revenues, expenses, and changes in fund net assets; the statement of cash flows;
footnotes related to the financial reports; and the supplemental schedule of gross profit by game.
The audit of the Arizona Lottery was performed under the authority of A.R.S. § 5-505 and
A.R.S. § 5-524, which require an annual audit of the Lottery.
The Arizona Lottery was created in 1980 when Arizona voters approved a ballot initiative adding
Title 5, Chapter 5 to the Arizona Revised Statutes. The Lottery began selling instant “scratchoff” tickets in July 1981 and during its 28 years of operation has offered a variety of instant and
online products. The Lottery operates as an agency of the State of Arizona and is reported as an
enterprise fund within the state’s Comprehensive Annual Financial Report. The fund is operated
in a manner similar to a private business enterprise.
In fiscal year 2009, the Arizona Lottery had revenues of $484.5 million from Lottery ticket sales,
2.5% more than last fiscal year, and an income before transfers of $128.0 million, 11.5% less
than last fiscal year. More than $282 million was paid to our players in prizes and our retail
partners received $32.5 million for sales commissions. In its 28 years of operation, the Lottery
has produced nearly $7.4 billion in Lottery ticket sales.
In fiscal year 2009, the Arizona Lottery made transfers to other State Funds of $30.9 million for
the Local Transportation Assistance Fund, $7.3 million for the County Assistance Fund,
$20.0 million for the Heritage Fund, $3.8 million for the Economic Development Fund,
$0.3 million

i

Arizona Lottery Commissioners
Page 2

for the Department of Gaming, $20.9 million for the Healthy Arizona Fund, and $43.2 million
was transferred to the State General Fund for allocation by the state legislature. In addition, from
the Lottery Prize Fund, over $2.7 million was transferred to the Court Appointed Special
Advocate (CASA). In total, $129.1 million was transferred to other State Funds for fiscal year
2009. In its 28 years of operation, the Lottery has returned over $2.3 billion to its beneficiaries.
Further financial results for fiscal year 2009 are detailed in Management’s Discussion and
Analysis, included in this report.

Sincerely,

Jeff Hatch – Miller
Executive Director

ii

INDEPENDENT AUDITORS’ REPORT
To the Commissioners of
Arizona State Lottery
Phoenix, Arizona
We have audited the accompanying statement of net assets of Arizona State Lottery (the “Lottery”), a
component unit of the state of Arizona, as of June 30, 2009 (with comparative totals as of June 30, 2008),
and the related statements of revenues, expenses, and changes in fund net assets and cash flows for the
year then ended (with comparative totals for the year ended June 30, 2008). These financial statements are
the responsibility of the Lottery’s management. Our responsibility is to express an opinion on these
financial statements based on our audit. The prior-year comparative totals information has been derived
from the Lottery’s 2008 financial statements and, in our report dated January 23, 2009, we expressed an
unqualified opinion on those financial statements.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the respective financial statements are
free of material misstatement. An audit includes consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Lottery’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the financial position of
the Lottery as of June 30, 2009, and the changes in its net assets and its cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States of America.
The accompanying transmittal letter is not part of the required basic financial statements. Such
information is the responsibility of the Lottery’s management. We have applied certain limited
procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the transmittal letter. However, we did not audit the information and we
do not express an opinion on it.
The accompanying required supplementary information, management’s discussion and analysis, is
presented on pages 3 through 6 and is not a required part of the basic financial statements, but is
supplementary accounting information required by the Governmental Accounting Standards Board. This
supplementary information is the responsibility of the Lottery’s management. We have applied certain
limited procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the required supplementary information. However, we did not audit the
information and we do not express an opinion on it.

Our audit was conducted for the purpose of forming an opinion on the Lottery’s basic financial
statements. The accompanying supplemental schedule is presented for purposes of additional analysis and
is not a required part of the basic financial statements. This supplemental schedule is the responsibility of
the Lottery’s management. Such information has been subjected to the auditing procedures applied by us
in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued our report dated January 15,
2010, on our consideration of the Lottery’s internal control over financial reporting and our tests of its
compliance and other matters. The purpose of that report is to describe the scope of our testing, and not to
provide an opinion on the internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.

January 15, 2010

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ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS
AS OF AND FOR THE YEAR ENDED JUNE 30, 2009

This discussion and analysis of the Lottery’s financial statements is a required component of financial
reporting under Government Accounting Standards and was prepared by Arizona Lottery Management. It
provides an overview of financial activities as of and for the year ended June 30, 2009, and should be read in
conjunction with the Lottery’s financial statements and notes to the financial statements.
This annual report consists of financial statements and accompanying notes that provide explanations and
details of accounting policies, account balances and activities. Account balances and activities are shown as of
and for the year ended June 30, 2009, with comparative totals for June 30, 2008. The statement of net assets;
the statement of revenues, expenses, and changes in Fund net assets; and the notes are presented using the
accrual method of accounting. Under this method, financial transactions are recorded when earned or incurred
regardless of when cash is received or disbursed. The statement of cash flows reflects cash receipts and
disbursements during the same 12-month periods.
The statement of net assets provides information about the assets and liabilities of the Lottery. Assets consist
of cash, substantially all held by the State Treasurer, amounts owed to the Lottery from licensed Lottery
retailers and other State agencies, ticket inventory, and property. Liabilities represent amounts owed by the
Lottery to vendors, to employees for wages and benefits, to prize winners, and to other State funds. Fund net
assets represent the portion of the Lottery’s assets that are not encumbered by liabilities. It serves as an
indicator of the net worth of the Lottery.
A summary of the financial results of operations for the 12-month periods is presented in the statement of
revenues, expenses, and changes in Fund net assets. Operating revenues include sales of Lottery tickets,
retailer licensing fees, and commissions earned on the sales of Lottery tickets at Lottery offices, and special
events. Direct costs and administrative expenses comprise the operating expenses section of this statement.
Direct costs are variable expenses that fluctuate with the level of sales. Marketing and overhead costs are
included in the administrative expenses category.
Nonoperating revenues consist of interest earned on prize fund cash investments from the State Treasurer and
interest credited to the Lottery’s Multistate Lottery Association (MUSL) unreserved account for interest
earned on prize reserves at MUSL. The transfers category includes transfers to other state funds as required
by Lottery statutes.
The statement of cash flows includes cash receipts and disbursements from operating, noncapital financing,
and investment earnings. This statement also includes a reconciliation of operating income presented on the
accrual basis of accounting to net cash provided by operating activities.
The notes to the financial statements present information on accounting policies, transfers and statutory
requirements, commitments, contingencies, and retirement benefits. These notes are an integral part of the
financial statements.

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Sales Activities
Revenues from the sale of Lottery products for the fiscal year ended June 30, 2009 were higher than Fiscal
Year 2008. As shown in the financial statements, sales increased 2.5% from the prior year, from
$472.9 million in Fiscal Year 2008 to $484.5 million in the current year. The increases in ScratchersSM,
Pick 5™, and Fast Play™ sales, and the introduction of the Cash 4™ game more than offset the decrease in
Powerball®, The Pick, Pick 3™, and Arizona Raffle™ sales.
The following table compares Lottery product sales between fiscal years. Sales are presented in millions of
dollars.
Product Sales

Scratchers (including economic development)
Powerball
The Pick
Pick 5
Arizona Raffle
Pick 3
Cash 4
Fast Play
Total

FY 2009

FY 2008

Difference

$278.9
117.3
45.5
17.0
11.2
9.4
3.0
2.2
$484.5

$252.0
130.4
52.6
14.2
11.9
9.5
1.8
$472.9

$26.9
(13.1)
(7.1)
2.8
(0.7)
(0.1)
3.0
0.4
$11.6

Percentage

10.7 %
(10.0)%
(13.5)%
19.7 %
(5.9)%
(0.1)%
100.0 %
22.2 %
2.5 %

Total Revenues
Nonoperating revenues for the year ended June 30, 2009, were approximately $752,100 as compared to
approximately $1,135,100 for the year ended June 30, 2008. Nonoperating revenue is comprised of interest
earned on invested cash and periodic recognition of commissions earned by the Lottery.
Total revenues were $485.8 million for the year ended June 30, 2009, as compared to $474.2 million for the
year ended June 30, 2008. As mentioned above, most of the increase was due to an increase in sales revenues.
Major Expenses
$332.1 million of the Lottery’s total operating expenses of $357.8 million for the year ended June 30, 2009
were incurred in direct support of the sales of Lottery games. These expenses include prize expense, retailer
commissions and incentives, purchases of Scratchers tickets, compensation to the vendor for Scratchers ticket
distribution, and compensation to the vendor who maintains and supports the online gaming system.
In comparison, $309.6 million of the Lottery’s total operating expenses of $329.6 million for the year ended
June 30, 2008, were game-related expenses.

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The following table compares the game-related expenses between fiscal years. All expenses are presented in
millions of dollars.
Game Related Expenses

Prize Expense
Retailer Commissions
Online System Expenses
Scratchers System and Distribution Expenses
Tickets Purchased
Total

FY 2009

FY 2008

$282.5
32.5
7.8
2.3
7.0
$332.1

$262.5
31.3
8.9
2.1
4.8
$309.6

Difference

$20.0
1.2
(1.1)
0.2
2.2
$22.5

Percentage

7.6 %
3.8 %
(12.4)%
9.5 %
47.9 %
7.3%

The increase in prize expense and retailer commissions is reflective of the increase in product sales. See the
product sales schedule above. The increase in tickets purchased is related to the higher number of Scratchers
games ended during the period and the inclusion of higher price point tickets that are costlier to print into the
sales mix.
The pricing in the Lottery’s contract with an outside vendor for online system expenses resulted in decreased
costs of approximately $1.1 million over last fiscal year.
Of the $25.7 million in Fiscal Year 2009 in other operating expenses, $15.7 million was used for advertising
and promotion and $6.1 million was used to compensate Lottery employees. In comparison, of the
$20.0 million in Fiscal Year 2008 other operating expenses, $10.8 million was used for advertising and
promotion and $6.1 million was used to compensate Lottery employees.
Transfers to Other State Funds
Note 3 to the financial statements details the amounts transferred to other State Funds. The Lottery transferred
$129.1 million to other State Funds. Although product sales increased by $11.6 million in this fiscal year, the
increase in advertising expenses and amounts paid to prize winners resulted in a decrease of $15.4 million in
the amount transferred to other State Funds. This year’s transfers were nearly $1.4 million above the
minimum transfers required in Lottery Statutes.
Other Financial Information
Statement of Net Assets

Current Assets
Capital Assets
Other Assets — Deposit
Total Assets
Current Liabilities
Net Assets

FY 2009

FY 2008

$43.7
3.8
8.3
55.8

$64.5
4.0
7.8
76.3

45.4

64.8

$10.4

$11.5

The Lottery’s total assets at June 30, 2009 were $55.8 million. Assets consisted of cash held substantially by
the State Treasurer of $35.5 million, receivables from Lottery retailers for the sale of Lottery products of
$5.8 million, Scratchers ticket inventory of $2.4 million, net investment in fixed assets of $3.8 million, and a
deposit with MUSL of $8.3 million.

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Comparable figures at June 30, 2008, were $76.3 million in total assets, including $55.8 million in cash held
by the State Treasurer, $5.2 million in receivables from retailers, $3.5 million in Scratchers ticket inventory,
net investment in fixed assets of $4.0 million, and a MUSL deposit of $7.8 million.
Total liabilities at June 30, 2009, were $45.4 million, consisting of $4.8 million in accounts payable and
accrued expenses, prize liabilities of $31.9 million, and amounts due to other State Funds of $8.6 million. All
of the Lottery’s liabilities were current liabilities.
The Lottery’s total liabilities at June 30, 2008, were $64.8 million, which consisted of $3.6 million of
accounts payable and accrued expenses, prize liabilities of $34.3 million, and amounts due to other State
Funds of $26.9 million. All liabilities were current liabilities.
Total net assets at June 30, 2009, were $10.4 million, which is $1.1 million less than the amount of total net
assets at June 30, 2008. $6.6 million of the Lottery’s total net assets are unrestricted.
BUDGETARY HIGHLIGHTS
The Lottery’s budget is set by the legislative appropriations process on a biennial basis. The budgets for
Fiscal Years 2008 and 2009 were set in the regular legislative session of 2007. The Lottery’s Fiscal Year
2009 budget was amended in the regular legislative session of 2008 and again in the first special session of
2009. The Lottery’s appropriation for sales-related expenditures is based on approved percentages of
projected revenues and is allowed to increase for these items without a supplemental appropriations request if
actual revenues exceed projected revenues. The appropriation does not include an amount for prizes because
Lottery statutes set this amount at “not less than 50% of the total annual revenues accruing from the sale of
Lottery tickets or shares.”
In the second regular legislative session of 2008 Lottery statutes were amended so that distributions to
beneficiaries are no longer derived from specific Lottery products. The legislation also removed the 4% cap
for advertising expenditures, limiting total expenditures to not more than 18.5% of revenues.
The Lottery’s appropriation was $80.3 million at the beginning of the year and increased to $80.5 million, as
actual revenues exceeded budgeted projections
CONTACTING THE LOTTERY’S FINANCIAL MANAGEMENT
This management’s discussion and analysis (MD&A) is designed to provide Arizona citizens, Arizona
government officials, our players, retailers, and other interested parties with an overview of the Lottery’s
financial activity for Fiscal Year 2009 and to demonstrate the Lottery’s accountability for the money it
received from the sale of Lottery products.
If you have questions about the MD&A or need additional information, contact the Arizona Lottery’s Director
of Audit and Accounting, 4740 East University, Phoenix, Arizona 85034.

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ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
STATEMENT OF NET ASSETS
AS OF JUNE 30, 2009
(With comparative totals for June 30, 2008)
2009

ASSETS:
Current assets:
Cash — substantially all held by the State Treasurer
Accounts receivable — net of allowance for doubtful accounts of
$145,000 and $145,000 in 2009 and 2008, respectively
Scratch ticket inventory
Total current assets
Capital assets:
Land
Land improvements
Buildings
Furniture, fixtures, and equipment
Construction in progress
Less accumulated depreciation
Total capital assets
Other assets — deposit — Powerball
Total assets
LIABILITIES — Current liabilities:
Accounts payable and accrued expenses
Prize liability
Due to other state funds
Total liabilities
NET ASSETS
ANALYSIS OF NET ASSETS:
Invested in capital assets
Unrestricted
NET ASSETS
See notes to financial statements.

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2008

$ 35,537,819

$ 55,850,443

5,783,197
2,367,733

5,172,990
3,514,250

43,688,749

64,537,683

937,830
330,865
3,648,272
2,466,217
52,680
(3,647,979)

937,830
330,865
3,602,783
2,376,841
45,489
(3,292,008)

3,787,885

4,001,800

8,329,576

7,747,729

55,806,210

76,287,212

4,839,693
31,930,197
8,645,397

3,644,267
34,273,436
26,879,603

45,415,287

64,797,306

$ 10,390,923

$ 11,489,906

3,787,885
6,603,038

4,001,800
7,488,106

$ 10,390,923

$ 11,489,906

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2009
(With comparative totals for the year ended June 30, 2008)

2009

OPERATING REVENUES:
Ticket sales:
Scratchers
Economic development
Powerball
The Pick
Pick 5
Arizona Raffle
Pick 3
Cash 4
Fast Play

2008

$ 262,695,972
16,228,385
117,238,451
45,489,149
16,996,584
11,184,560
9,409,924
3,036,194
2,206,885

$ 239,227,853
13,220,586
130,424,083
52,552,416
14,191,389
11,943,120
9,530,550

484,486,104

472,937,278

550,905

114,916

485,037,009

473,052,194

282,482,645
32,472,390
7,813,813
2,329,018
7,037,109

262,486,159
31,312,957
8,890,551
2,107,944
4,756,628

Total direct costs

332,134,975

309,554,239

Advertising and promotion
Wages and related expenses
Contract services
Depreciation
Administrative expenses

15,687,024
6,107,037
393,838
355,971
3,129,245

10,816,867
6,095,428
348,976
316,099
2,447,080

357,808,090

329,578,689

127,228,919

143,473,505

752,101

1,135,098

INCOME BEFORE TRANSFERS

127,981,020

144,608,603

TRANSFERS TO OTHER STATE FUNDS

129,080,003

144,500,971

Total ticket sales
Other operating revenues
Total operating revenues
OPERATING EXPENSES:
Direct costs:
Prize expense
Retailer commissions and incentives
Online system expense
Scratcher system and distribution expenses
Tickets purchased

Total operating expenses
OPERATING INCOME
NONOPERATING REVENUES — Interest earnings

1,847,281

CHANGE IN FUND NET ASSETS

(1,098,983)

FUND NET ASSETS — Beginning of year

11,489,906

11,382,274

$ 10,390,923

$ 11,489,906

FUND NET ASSETS — End of year
See notes to financial statements.

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107,632

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2009
(With comparative totals for the year ended June 30, 2008)

CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from retailers — net of commissions and incentives
Cash received from other sources
Cash payments for prizes and related taxes
Cash payments to suppliers of goods or services
Cash payments to employees
Net cash provided by operating activities
CASH FLOWS USED BY NONCAPITAL FINANCING ACTIVITIES — Cash
payments to beneficiaries per Arizona Statutes
CASH FLOWS USED BY CAPITAL FINANCING ACTIVITIES — Payments for
acquisition of capital assets
CASH FLOWS FROM INVESTING ACTIVITIES — Receipts of interest

2009

2008

$ 249,897,690
10,541,931
(93,272,517)
(34,056,699)
(6,128,575)

$ 262,696,646
10,412,785
(93,863,066)
(29,955,778)
(6,087,607)

126,981,830

143,202,980

(147,314,209)

(147,626,398)

(142,056)

(163,161)

161,811

586,441

NET DECREASE IN CASH

(20,312,624)

(4,000,138)

CASH — Beginning of year

55,850,443

59,850,581

CASH — End of year

$ 35,537,819

$ 55,850,443

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
Operating income

$ 127,228,919

$ 143,473,505

355,971

316,099
43,589

Adjustments to reconcile operating income to net cash provided by operating activities:
Depreciation
Loss on disposal of equipment
Changes in assets and liabilities:
Accounts receivable and due from other State agencies
Ticket inventory
Deposit — Powerball
Accounts payable and accrued expenses
Prizes and withholdings payable
Total adjustments
NET CASH PROVIDED BY OPERATING ACTIVITIES

(19,917)
1,146,517
(581,847)
1,195,426
(2,343,239)

(402,748)
431,924
(619,580)
(828,629)
788,820

(247,089)

(270,525)

$ 126,981,830

See notes to financial statements.

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$ 143,202,980

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEAR ENDED JUNE 30, 2009

1.

DESCRIPTION OF OPERATIONS
The Arizona State Lottery (the “Lottery”) was created by enactment of Title 5, Chapter 5 to the Arizona
Revised Statutes (ARS), which was an initiative measure approved by the voters of the state of Arizona
(the “State”) in 1980. The Lottery commenced operations in 1981. The Lottery is a component unit of
the State. The accompanying financial statements present information as to the transactions of the
Lottery.
The financial statements include prior-year comparative information, but the notes to the financial
statements omit prior-year information required for a presentation in conformity with accounting
principles generally accepted in the United States of America (“generally accepted accounting
principles”). Accordingly, such prior-year information should be read in conjunction with the Lottery’s
financial statements for the year ended June 30, 2008, from which the information was derived.
For the period July 1, 2008 through June 30, 2009, the Lottery held 118 instant games (games 453, 480,
490, 510, 515, 519, 522, 524-526, 530-531, 538, 540-542, 544-545, 548-635, 637-639, 642-644,
647-648, 651, 653, 660-661, and 673), four of which were Economic Development games (games 553,
572, 592, and 619). During 2009, the Lottery continued the “Pick 3,” “Pick 5,” “The Pick,” “Powerball,”
and “Fast Play” online games, continued the “Arizona Raffle” game, which was held two times in the
fiscal year, and introduced the “Cash 4” online game. As required, the Lottery has a deposit with
“Powerball,” a multistate online lottery game, of $8,329,576 at June 30, 2009.

2.

SIGNIFICANT ACCOUNTING POLICIES
The Lottery prepares its financial statements in accordance with generally accepted accounting
principles.
State Lottery Fund — The State Lottery Fund (the “Fund”), which is a component unit of the State,
accounts for revenues received from the sale of lottery tickets and the receipt of license fees. The Fund is
operated in a manner similar to a private business enterprise where the governing body has decided that
periodic determination of revenues earned, expenses incurred, and net income is appropriate for capital
maintenance, management control, accountability, or other purposes. Activities accounted for in the
proprietary fund follow all applicable Governmental Accounting Standards Board pronouncements, as
well as applicable Financial Accounting Standards Board pronouncements issued on or before
November 30, 1989. The Fund accounts for prize payments, operational expenses, including consulting,
promotional, and advertising expenses, and transfers of monies to other State funds. Receipts from each
type of lottery game are to be allocated as follows:
·

Not less than 50% of the total annual revenue from Lottery ticket sales is apportioned for the
payment of prizes to the holders of winning tickets for the period July 1, 2008 to June 30, 2009.

·

Not more than 18.5% is apportioned for payment of Lottery operating expenditures. Legislation
enacted in 2008 set this limit and also removed a 4% cap on advertising expenditures.

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In addition, State statute requires that 30% of all unclaimed prizes be transferred to the Court-Appointed
Special Advocate Account, a fund within the State’s General Fund.
Ticket Sales and Revenue Recognition — Revenue is recognized and the related direct expenses of
ticket sales are accrued based upon the known relationship of the amount of ticket sales to the amount of
prizes for each game. This method of measuring revenue is necessary in order to properly match
revenues and expenses.
Property and Equipment — Property and equipment of the Fund, which consists principally of
buildings, land, land improvements, and office furniture and equipment are stated at historical cost.
Expenditures for normal repairs and maintenance are charged to operations as incurred, whereas
expenditures for major renewals, replacements, and betterments are capitalized and depreciated.
Depreciation is provided for as follows:
Method

Buildings
Land improvements
Furniture, fixtures, and computer equipment

Straight-line
Straight-line
Straight-line

Estimated
Useful Life

40 years
20 years
5–7 years

Investment Income — Investment income from all investments is recognized in the Fund, which
includes invested cash held by the State Treasurer and invested prize reserves held by the Multistate
Lottery Association.
Ticket Inventory — Ticket inventory is stated at cost, which represents the amount incurred by the
Lottery for purchasing the tickets.
Cash — Substantially all the Lottery’s cash is held by the State Treasurer for pooled investment
purposes. Statutes require the State Treasurer to invest these pooled funds in obligations of the
U.S. government and are recorded at fair value.
Compensated Absences — Vacation leave vests with the employee as it is earned. Employees may
carry forward only the amount of vacation benefits equal to the maximum allowable accumulated credits
for the preceding calendar year. Accordingly, at June 30, 2009, the Fund’s accounts payable and accrued
expenses balance includes an accrual of vacation pay and related benefits of $308,411. Upon termination
or retirement, an employee will be compensated for accumulated leave up to a maximum of 240 hours,
dependent upon accumulated time and the individual’s benefits associated with their rank as defined by
State personnel rule #R2-5-403. Payment will be based on the individual’s rate of pay at termination or
retirement. Upon death, the same benefits shall be paid to the employee’s beneficiary.
Use of Estimates — The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

- 11 -

3.

TRANSFERS AND STATUTORY REQUIREMENTS
As required by ARS Section 5-505, the Lottery made transfers during the year ended June 30, 2009, as
follows:
County assistance fund
Court-appointed special advocate account
Department of gaming
Economic development commission fund
General fund
Healthy Arizona fund
Heritage fund
Local transportation assistance fund

$

7,267,500
2,722,803
300,000
3,792,900
43,225,100
20,897,400
20,000,000
30,874,300

Total transfers to other State funds

$ 129,080,003

These transactions met the minimum percentage requirements imposed upon the Lottery by statute.
4.

CAPITAL ASSETS
Capital assets activity for the year ended June 30, 2009, was as follows:
Beginning
Balance

Capital assets:
Land
Land improvements
Buildings
Furniture, fixtures, and equipments
Construction in progress
Total capital assets
Less accumulated depreciation for:
Land improvements
Buildings
Furniture, fixtures, and equipments
Total accumulated depreciation
Capital assets — net

5.

$

Increases

937,830
330,865
3,602,783
2,376,841
45,489

$

-

Decreases

Transfers

$

$

-

-

$

(45,489)

937,830
330,865
3,648,272
2,466,217
52,680

-

7,435,864

45,489
89,376
52,680

7,293,808

142,056

(330,379)
(1,479,707)
(1,481,922)

(486)
(110,718)
(244,767)

(3,292,008)

(355,971)

$ 4,001,800

$ (213,915)

Ending
Balance

-

(330,865)
(1,590,425)
(1,726,689)
$

-

$

-

(3,647,979)
$ 3,787,885

PRIZE LIABILITY
Prize liability activity for the year ended June 30, 2009, was as follows:
Balance
July 1, 2008

Prize liability

$ 34,273,436

Increases

$ 285,390,568

- 12 -

Decreases

$ (287,733,807)

Balance
June 30, 2009

$ 31,930,197

6.

COMMITMENTS
The Lottery enters into various contracts for goods and services during the normal course of its business.
All contacts and purchasing activity are subject to the Arizona State Procurement Code and the rules of
the Arizona State Procurement Office. All contracts have incorporated into them the “Standard Terms
and Conditions” as required by the Arizona State Procurement Office. These terms and conditions in all
the contracts allow for cancellation for lack of funding in the current fiscal year or next fiscal year. The
contract may also be terminated for the Lottery’s convenience at any time with no penalty when it is in
the best interest of the State.
Net rental expense for the year ended June 30, 2009, was $62,803.
Effective September 1, 2006, the Lottery entered into a five-year contract with G-Tech Services, Inc. for
computer processing services at a base contract rate of 3.8012% of online sales.

7.

CONTINGENCIES
Annuities are purchased for all prizes over $400,000 for which winners will receive the jackpot in
annual installments for The Pick online game. These annuities are purchased from qualifying insurance
companies, which have the highest ratings from among A.M. Best Company, Standard & Poor’s,
Moody’s, Duff & Phelps, or Weiss. The Lottery may incur future liabilities on these annuities.
Aggregate future payments to prize winners on existing annuities totaled approximately $76,105,470 at
June 30, 2009. Approximately $56,651,880 of the total aggregate future payments at June 30, 2009,
relate to annuities purchased from five separate insurance companies, of which approximately
$13,025,987 relates to a single insurance company.
Tort claims against the Lottery, its agents, officers, and employees who are acting in the scope and
course of their employment with the Lottery are covered pursuant to the State Risk Management statute,
ARS § 41-621. There is no limit to that coverage. Therefore, as to any claims based on tort, there is no
contingent liability to the budget of the Lottery.
The Lottery is involved in various legal proceedings, which arose in the normal course of business.
Management of the Lottery does not believe that the ultimate resolution of these matters will have a
material effect on the financial position, results of operations, or cash flows of the Lottery.

8.

RETIREMENT PLAN
Permanent, full-time employees of the Lottery are covered by the Arizona State Retirement Plan (the
“Plan”), a retirement plan administered by the Arizona State Retirement System (ASRS), which is a
multiple-employer, cost-sharing pension plan. The Comprehensive Annual Financial Report of the
ASRS can be obtained by accessing www.azasrs.gov. The Plan was established by the State to provide
benefits for employees of the State and employees of participating political subdivisions and school
districts. The Plan became effective on July 1, 1971. By actuarial computation, employee member
contributions to the Plan were fixed at 8.95%, 9.10%, and 8.60% of their compensation for the years
ended June 30, 2009, 2008, and 2007, respectively, with the contributions made through payroll
deduction. Employee contributions vest immediately. Total contributions to the Plan for the years ended
June 30, 2009, 2008, and 2007, by the Lottery’s covered employees were $384,476, $397,693, and
$382,129, respectively.

- 13 -

Matching employer member contributions were actuarially determined and fixed at 8.95 %, 9.10%, and
8.60% of the compensation of all employee members for the years ended June 30, 2009, 2008, and 2007,
respectively. Total matching contributions to the Plan for the years ended June 30, 2009, 2008, and
2007, by the Lottery were $384,476, $397,693, and $382,129, respectively. In the event the Plan’s
actuary determines that additional contributions are needed in order to amortize an unfunded accrued
liability, every employer member will be required to contribute the revised contribution percentage that
is set by the Plan.
All full-time employees of the Lottery are required to become members of the Plan. The Lottery’s total
payroll for employees covered by this Plan for the years ended June 30, 2009, 2008, and 2007, was
$4,410,518. Contributions to the Plan by the Lottery for its covered employees become fully vested
immediately after membership in the Plan. All required employer contributions were made to the Plan
within 30 days after June 30, 2009.
******

- 14 -

SUPPLEMENTAL SCHEDULE

- 15 -

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
SUPPLEMENTAL SCHEDULE OF GROSS PROFIT BY GAME
FOR GAMES EXPIRING DURING THE YEAR
FOR THE YEAR ENDED JUNE 30, 2009
Bingo
Game 480

TICKET SALES
DIRECT EXPENSES:
Commissions

$ 42,259,686

Super 7s Bingo
Game 490

100.00 %

$ 9,547,125

100.00 %

$50,000 Casino Action
Game 510

$ 5,422,920

100.00 %

2,746,880

6.50

620,565

6.50

352,490

6.50

21,848,256
3,012,300

51.70
7.13

4,709,915
1,233,710

49.33
12.92

2,304,742
1,198,450

42.50
22.10

Total prizes

24,860,556

58.83

5,943,625

62.26

3,503,192

64.60

Ticket purchases

767,825

1.82

162,071

1.70

170,524

3.14

28,375,261

67.15

6,726,261

70.45

4,026,206

74.24

$ 13,884,425

32.86

$ 2,820,864

29.55

$ 1,396,714

25.76

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

Naughty/Nice Crossword
Game 519

TICKET SALES
DIRECT EXPENSES:
Commissions

$ 3,606,430

100.00 %

Arizona Bingo
Game 522

$ 9,843,050

100.00 %

Fire’n’Ice
Game 524

$ 2,019,726

100.00 %

234,418

6.50

639,799

6.50

131,282

6.50

1,803,215
363,100

50.00
10.07

4,429,373
1,890,725

45.00
19.21

979,567
229,600

48.50
11.37

Total prizes

2,166,315

60.07

6,320,098

64.21

1,209,167

59.87

Ticket purchases

98,958

2.74

132,829

1.35

39,896

1.98

Advertising

90,308

2.50

2,589,999

71.82

7,092,726

72.06

1,380,345

68.34

$ 1,016,431

28.18

$ 2,750,324

27.94

639,381

31.66

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

Aztec Gold
Game 525

TICKET SALES
DIRECT EXPENSES:
Commissions

$ 3,279,780

Cash Cards
Game 526

100.00 %

$ 10,280,410

$

Cherub Slingo
Game 530

100.00 %

$ 10,116,168

100.00 %

213,187

6.50

668,227

6.50

657,553

6.50

1,618,025
390,150

49.33
11.90

2,748,982
3,329,575

26.74
32.39

5,462,731
905,300

54.00
8.95

Total prizes

2,008,175

61.23

6,078,557

59.13

6,368,031

62.95

Ticket purchases

58,217

1.78

73,782

0.72

154,745

1.53

2,279,579

69.50

6,820,566

66.35

7,180,329

70.98

$ 1,000,201

30.50

$ 3,459,844

33.65

$ 2,935,839

29.02

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

(Continued)

- 16 -

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
SUPPLEMENTAL SCHEDULE OF GROSS PROFIT BY GAME
FOR GAMES EXPIRING DURING THE YEAR
FOR THE YEAR ENDED JUNE 30, 2009
Two Much Fun
Game 531

TICKET SALES

$ 1,177,818

DIRECT EXPENSES:
Commissions

100.00 %

Win For Life
Game 538

$ 4,639,752

Crown Jewel 7s
Game 540

100.00 %

$ 11,351,835

100.00 %

76,558

6.50

301,584

6.50

737,871

6.50

618,354
72,280

52.50
6.14

1,995,093
613,433

43.00
13.22

5,335,362
1,972,869

47.00
17.38

Total prizes

690,634

58.64

2,608,526

56.22

7,308,231

64.38

Ticket purchases

44,418

3.77

73,211

1.58

175,032

1.54

811,610

68.91

2,983,321

64.30

8,221,134

72.42

366,208

31.09

$ 1,656,431

35.70

$ 3,130,701

27.58

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

Boot Loot
Game 541

TICKET SALES

$

One Word Crossword
Game 542

722,700

100.00 %

46,977

6.50

840,760

6.50

84,194

6.50

Prizes—low tier
Prizes—high tier

361,350
47,300

50.00
6.54

6,036,218
2,049,750

46.67
15.85

634,693
107,300

49.00
8.28

Total prizes

408,650

56.54

8,085,968

62.52

741,993

57.28

Ticket purchases

42,212

5.84

132,900

1.03

42,999

3.32

497,839

68.88

9,059,628

70.05

869,186

67.10

224,861

31.11

$ 3,875,124

29.96

426,105

32.90

DIRECT EXPENSES:
Commissions

Total direct expenses
GROSS PROFIT BY GAME

$

$ 12,934,752

Quick 7’s
Game 549

TICKET SALES

$ 1,231,905

DIRECT EXPENSES:
Commissions

100.00 %

$5,000 Spin
Game 544

$ 1,295,291

$

Line ’Em Up
Game 550

100.00 %

$

100.00 %

Black Jack
Game 551

677,269

100.00 %

$ 1,651,308

100.00 %

80,075

6.50

44,023

6.50

107,336

6.50

Prizes—low tier
Prizes—high tier

609,756
92,785

49.50
7.53

331,862
55,550

49.00
8.20

825,654
116,640

50.00
7.06

Total prizes

702,541

57.03

387,412

57.20

942,294

57.06

Ticket purchases

54,601

4.43

41,875

6.18

42,958

2.61

837,217

67.96

473,310

69.88

1,092,588

66.17

394,688

32.04

203,959

30.11

558,720

33.83

Total direct expenses
GROSS PROFIT BY GAME

$

$

$

(Continued)

- 17 -

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
SUPPLEMENTAL SCHEDULE OF GROSS PROFIT BY GAME
FOR GAMES EXPIRING DURING THE YEAR
FOR THE YEAR ENDED JUNE 30, 2009
Fabulous 5’s
Game 553 *

TICKET SALES

$ 5,276,465

DIRECT EXPENSES:
Commissions

Hot Streak
Game 555

100.00 %

$ 7,125,830

Gold Rush
Game 556

100.00 %

$ 4,577,235

100.00 %

342,972

6.50

463,179

6.50

297,521

6.50

2,384,435
742,050

45.19
14.06

1,871,956
2,423,640

26.27
34.01

2,061,587
677,900

45.04
14.81

Total prizes

3,126,485

59.25

4,295,596

60.28

2,739,487

59.85

Ticket purchases

71,321

1.35

78,936

1.10

71,456

1.56

3,540,778

67.10

4,837,711

67.88

3,108,464

67.91

$ 1,735,687

32.89

$ 2,288,119

32.11

$ 1,468,771

32.09

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

Sudoku
Game 557

TICKET SALES

$ 1,479,318

DIRECT EXPENSES:
Commissions

Deal or No Deal
Game 558

100.00 %

$ 5,973,690

100.00 %

$100,000 Taxes Paid
Game 562

$ 9,337,270

100.00 %

96,159

6.50

388,293

6.50

606,923

6.50

759,383
169,900

51.33
11.49

2,402,021
1,176,895

40.21
19.70

2,502,388
3,080,002

26.80
32.99

Total prizes

929,283

62.82

3,578,916

59.91

5,582,390

59.79

Ticket purchases

138,409

9.36

219,561

3.68

87,175

0.93

1,163,851

78.68

4,186,770

70.09

6,276,488

67.22

315,467

21.33

$ 1,786,920

29.91

$ 3,060,782

32.78

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

Double Wild 7’s
Game 564

TICKET SALES

$ 1,477,979

DIRECT EXPENSES:
Commissions

100.00 %

Double It!
Game 565

$ 1,002,803

Money Game
Game 567

100.00 %

$

975,815

100.00 %

96,070

6.50

65,183

6.50

63,429

6.50

679,870
168,525

46.00
11.40

491,373
83,250

49.00
8.30

492,788
65,500

50.50
6.71

Total prizes

848,395

57.40

574,623

57.30

558,288

57.21

Ticket purchases

72,683

4.92

58,386

5.82

45,645

4.68

1,017,148

68.82

698,192

69.62

667,362

68.39

460,831

31.18

304,611

30.38

308,453

31.61

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

* Portion of game designated for economic development

$

$

(Continued)

- 18 -

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
SUPPLEMENTAL SCHEDULE OF GROSS PROFIT BY GAME
FOR GAMES EXPIRING DURING THE YEAR
FOR THE YEAR ENDED JUNE 30, 2009
Ho Ho Dough
Game 568

TICKET SALES

$ 1,483,581

DIRECT EXPENSES:
Commissions

Holiday Fun
Game 569

100.00 %

$ 1,268,802

Jingle Bells
Game 570

100.00 %

$ 2,882,035

100.00 %

96,435

6.50

82,472

6.50

187,335

6.50

771,462
116,660

52.00
7.86

647,089
132,040

51.00
10.41

1,222,086
474,200

42.40
16.45

Total prizes

888,122

59.86

779,129

61.41

1,696,286

58.85

Ticket purchases

55,292

3.73

59,247

4.67

68,797

2.39

1,039,849

70.09

920,848

72.58

1,952,418

67.74

443,732

29.91

347,954

27.42

929,617

32.26

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

$

Loteria Arizona
Game 571

TICKET SALES

$ 1,330,944

DIRECT EXPENSES:
Commissions

100.00 %

$

Diamond Dazzler
Game 573

$ 2,245,555

100.00 %

Diamond Dazzler 2X
Game 574

$ 3,671,618

100.00 %

86,511

6.50

145,962

6.50

238,655

6.50

638,853
165,512

48.00
12.44

1,100,322
187,870

49.00
8.36

1,762,377
427,420

48.00
11.64

Total prizes

804,365

60.44

1,288,192

57.36

2,189,797

59.64

Ticket purchases

75,726

5.69

158,608

7.06

170,413

4.64

966,602

72.63

1,592,762

70.92

2,598,865

70.78

364,342

27.37

652,793

29.07

$ 1,072,753

29.22

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

$

Diamond Dazzler 2X
Game 575

TICKET SALES
DIRECT EXPENSES:
Commissions

$ 6,990,380

100.00 %

5 Times Lucky
Game 576

$ 2,673,042

Super Deuces
Game 578

100.00 %

$ 1,706,134

100.00 %

454,376

6.50

173,748

6.50

110,899

6.50

2,642,132
1,522,950

37.80
21.79

1,149,408
447,150

43.00
16.73

801,883
224,740

47.00
13.17

Total prizes

4,165,082

59.59

1,596,558

59.73

1,026,623

60.17

Ticket purchases

272,605

3.90

47,247

1.77

67,230

3.95

4,892,063

69.99

1,817,553

68.00

1,204,752

70.62

$ 2,098,317

30.02

855,489

32.00

501,382

29.39

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

$

(Continued)

- 19 -

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
SUPPLEMENTAL SCHEDULE OF GROSS PROFIT BY GAME
FOR GAMES EXPIRING DURING THE YEAR
FOR THE YEAR ENDED JUNE 30, 2009
Double Down
Game 579

TICKET SALES

$ 1,001,019

DIRECT EXPENSES:
Commissions

3s a Charm
Game 580

100.00 %

$ 1,149,637

Cash to Go
Game 581

100.00 %

$ 1,067,933

100.00 %

65,067

6.50

74,728

6.50

69,417

6.50

500,510
66,850

50.00
6.68

528,833
125,190

46.00
10.89

539,308
74,150

50.50
6.94

Total prizes

567,360

56.68

654,023

56.89

613,458

57.44

Ticket purchases

35,780

3.57

35,947

3.12

35,214

3.30

668,207

66.75

764,698

66.51

718,089

67.24

332,812

33.25

384,939

33.48

349,844

32.76

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

$

Lucky Cash
Game 582

TICKET SALES

$ 1,910,140

DIRECT EXPENSES:
Commissions

$

Super Score
Game 584

100.00 %

$

Wild Willie Slingo
Game 585

792,968

100.00 %

$ 3,512,649

100.00 %

124,159

6.50

51,543

6.50

228,325

6.50

897,766
245,200

47.00
12.84

356,836
106,210

45.00
13.39

1,896,830
316,350

54.00
9.01

Total prizes

1,142,966

59.84

463,046

58.39

2,213,180

63.01

Ticket purchases

43,785

2.29

24,427

3.08

78,291

2.23

1,310,910

68.63

539,016

67.97

2,519,796

71.74

599,230

31.37

253,952

32.03

992,853

28.27

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

$

Red White and Blue
Game 586

TICKET SALES

$ 1,437,464

DIRECT EXPENSES:
Commissions

100.00 %

$

Solid Gold
Game 587

$

Beat the Heat
Game 588

921,955

100.00 %

$ 1,022,223

100.00 %

93,435

6.50

59,928

6.50

66,446

6.50

639,671
232,020

44.50
16.14

460,978
66,700

50.00
7.23

511,112
67,840

50.00
6.64

Total prizes

871,691

60.64

527,678

57.23

578,952

56.64

Ticket purchases

54,317

3.78

37,912

4.12

37,363

3.66

1,019,443

70.92

625,518

67.85

682,761

66.80

418,021

29.08

296,437

32.15

339,462

33.21

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

$

$

(Continued)

- 20 -

ARIZONA STATE LOTTERY,
A COMPONENT UNIT OF THE STATE OF ARIZONA
SUPPLEMENTAL SCHEDULE OF GROSS PROFIT BY GAME
FOR GAMES EXPIRING DURING THE YEAR
FOR THE YEAR ENDED JUNE 30, 2009
10K Payday
Game 589

TICKET SALES

$ 1,621,052

DIRECT EXPENSES:
Commissions

100.00 %

105,368

6.50

697,052
266,500

43.00
16.44

Total prizes

963,552

59.44

Ticket purchases

43,355

2.67

1,112,275

68.61

508,777

31.39

Prizes — low tier
Prizes — high tier

Total direct expenses
GROSS PROFIT BY GAME

$

Pick/Pick Extra Drawings
January 1, 2008 to
December 31, 2008

TICKET SALES
DIRECT EXPENSES:
Commissions
Total prizes
Online system expenses
Advertising
Total direct expenses
GROSS PROFIT BY GAME

$ 52,305,175

100.00 %

DIRECT EXPENSES:
Commissions
Total prizes
Online system expenses
Advertising
Total direct expenses
GROSS PROFIT BY GAME

$ 14,892,468

100.00 %

Powerball Drawings
January 1, 2008 to
December 31, 2008

$123,151,314

100.00 %

3,399,809
26,868,154
2,057,130
1,211,777

6.50
51.37
3.93
2.32

967,988
7,614,123
582,928
33,151

6.50
51.13
3.91
0.22

8,004,816
61,575,657
4,836,629
1,316,737

6.50
50.00
3.93
1.07

33,536,870

64.12

9,198,190

61.76

75,733,839

61.50

$ 18,768,305

35.88

$ 5,694,278

38.24

$ 47,417,475

38.50

Pick 3 Drawings
January 1, 2008 to
December 31, 2008

TICKET SALES

Pick 5/Pick 5 Extra Drawings
January 1, 2008 to
December 31, 2008

$ 9,595,713

100.00 %

Arizona Raffle Drawings
January 1, 2008 to
December 31, 2008

$ 9,364,620

100.00 %

Fast Play Drawings
January 1, 2008 to
December 31, 2008

$ 2,552,660

100.00 %

623,710
4,797,856
376,048
28,151

6.50
50.00
3.92
0.29

608,701
4,792,848
367,387
2,258,384

6.50
51.18
3.92
24.12

165,060
1,481,127
100,678
580,605

6.47
58.02
3.94
22.75

5,825,765

60.71

8,027,320

85.72

2,327,470

91.18

$ 3,769,948

39.29

$ 1,337,300

14.28

225,190

8.82

NOTE: After the announced completion of ticket sales for each game, customers have a 180-day period in
which they can redeem their winning tickets. The above gross profit information includes games in which
the 180-day grace period expired during the fiscal year ended June 30, 2009.

- 21 -

$

(Concluded)