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Annual Report 2006

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Annual Report 2006 Annual Report 2006 Table of Contents OVERVIEW 5 Who We Are 5 Our Vision 5 Our Purpose 5 For further information please Our Values 5 contact: Highlights of the Year 6 CHAIRMAN’S INTRODUCTION 7 Jan Stewart CEO’s REPORT 9 Chief Executive Officer Lotterywest Stakeholders 19 Lotterywest OUR GAMES 20 Saturday Lotto 20 OZ Lotto 21 Postal Address: Powerball 22 Lotterywest Monday and Wednesday Lotto 22 PO Box 1113 Scratch’n’Win 23 Osborne Park Cash 3 24 Western Australia 6917 Soccer Pools 24 Super 66 25 OUR RETAILERS 26 Street Address: OUR PLAYERS 32 Lotterywest SUPPORT FOR OUR COMMUNITY 34 74 Walters Drive Lotterywest Community Grants 34 Osborne Park Perth International Arts Festival 38 Western Australia 6017 Western Australian Film Industry 38 Supporting our State’s Hospitals 39 Telephone: The Arts 39 + 61 8 9340 5100 Sports & Recreation 40 Facsimile: PLANNING AND BUSINESS DEVELOPMENT 42 + 61 8 9242 2577 Strategic Planning Framework 49 OUR PEOPLE 50 Email: [email protected] Our People Are Our Success 50 Website: www.lotterywest.wa.gov.au People and Communities 53 Our Organisation 54 CORPORATE GOVERNANCE 55 Lotterywest Board 55 Front cover - Image from Everyday People, Lotterywest Board Members 55 Lotterywest’s campaign which celebrates the joys of a lottery win - by our players and our community Corporate Governance Framework 58 2 of 119 Lotterywest Annual Report 2006 Table of Contents Audit Committees 58 Legislation Impacting on Lotterywest 59 Ministerial Directives 60 The Environment 62 Governance 64 The Regions 68 CERTIFICATION OF PERFORMANCE INDICATOR 69 AUDITOR GENERAL’S OPINION OF FINANCIAL STATEMENTS AND PERFORMANCE INDICATORS 70 PERFORMANCE INDICATOR TABLES 71 KEY PERFORMANCE INDICATORS (AUDITED) 72 CERTIFICATION OF FINANCIAL STATMENTS 73 INCOME STATEMENT 74 BALANCE SHEET 75 STATEMENT OF CHANGES IN EQUITY 76 STATEMENT OF CASH FLOW 77 NOTES TO THE FINANCIAL STATEMENT 78 OPERATING BUDGET FOR 2006/07 106 Notes to the Budget 107 FIVE YEAR SUMMARY OF FINANCIAL DATA 108 Direct Grants Summary 109 Direct Grants List 110 Reconciliation of Direct Grants 118 GLOSSARY 119 Lotterywest Annual Report 2006 3 of 119 4 of 119 Lotterywest Annual Report 2006 Annual Report 2006 Overview Who we are Lotterywest (the Lotteries Commission of Western Australia) operates according to the provisions of the Lotteries Commission Act 1990 (as amended), as a statutory authority responsible for selling lottery games and distributing the proceeds for the benefit of the Western Australian community Judy Elvidge, Tom Hendrych and Our Vision Mary Boksich from our Information Services team To be recognised as a key corporate citizen of Western Australia and a leader in the global lottery industry and in all areas of our business Our Purpose To provide funds and support to the community of Western Australia through excellence and integrity in our lottery business Our Values Rewarding – Those who come in contact with us value their experience with us and are enriched by those experiences Inspiring – We motivate and encourage ourselves and others to achieve greater things for the benefit of the community Trusted – All those who play our games or have business relationships with us know that our business dealings with them will be honest, reliable and trustworthy Engaging – We will actively seek partnerships and contact with others for mutual benefit Lotterywest Annual Report 2006 5 of 119 Highlights Total Sales OUR GAMES $550 • Total Sales of $546.37m • Increase of $26.26m on 2005 $500 • Oz Lotto re-launched and first ever $20m jackpot $450 • Monday and Wednesday Lotto launched in May Millions 2006 $400 • Changes to the price structures and prize payout 2002 2003 2004 2005 2006 for Scratch’n’Win tickets • Total annual sales per adult of $344.65 Total Funding provided to the Western OUR COMMUNITY Australian Community • A total of $166.21m was returned to the Western Australian community $200 – $81.83m returned to Hospitals $150 – $10.23m returned to the Arts $100 – $10.23m returned to Sports Millions $50 – $4m to the University of WA for the Perth $0 International Art Festival 2002 2003 2004 2005 2006 – $4m to Screenwest for the support of the Screen Industry in WA – $55.92m distributed to charitable and community groups • 1,268 grants approved to 1,165 different organisations Annual Lottery Sales per Capita (Adult) $360 OUR RETAILERS • 482 online retail outlets $320 • 81 Scratch’n’Win only outlets $280 • $44.47m paid to Retailers in commission $240 2002 2003 2004 2005 2006 6 of 119 Lotterywest Annual Report 2006 Chairman’s Introduction It has again been a privilege to chair the Lotterywest Board during a year of record sales and returns to our beneficiaries. The Board is very cognisant of the responsibilities it holds in overseeing the governance of this important Western Australian Statutory Authority. We have many stakeholders who have an interest in the way our business performs – the public of Western Australia, to whom we are accountable through the Minister for Government Enterprises; our players, who must be confident that our games are run with absolute integrity; our beneficiaries who are entitled to expect optimum funding and courteous service (while we must also be aware of our social responsibilities in the way our products are promoted); our retailers who represent us to our players and who rely on us to help ensure the success of their business; our business partners and suppliers; and finally, the staff of Lotterywest for whom we must ensure a rewarding, safe and enjoyable place to work. Clyde Bevan Chairman The Board, in all its deliberations, seeks to ensure that the interests of all these groups are carefully considered, and outcomes achieved which are fair and balanced for all concerned. We believe the results reported in this report demonstrate that we have achieved the right balance. During the course of the past year, the Board recommended to the Department of Treasury and Finance a business case for a considerable capital investment to replace the central gaming system and gaming terminals as well as Lotterywest’s business information systems. This followed a review by the senior management team which concluded that the now ageing technology which is needed to run the Lotterywest business must be replaced. This project, which is planned for completion in early 2008, will provide Lotterywest with the technological infrastructure to ensure its success for the next decade. It is a complex project, which like all of its kind, carries a degree of risk. The Board will fulfill its role in overseeing this project in the forthcoming year and is confident that the team at Lotterywest have the ability to ensure the project’s success. Lotterywest Annual Report 2006 7 of 119 While the strong economy of Western Australia remains a positive factor for the continued success of our business, there are other forces that have the potential to impact on our success. We continue to monitor carefully, for example, the global changes in the gaming market and the potential for competition from internet gaming. Our forecast for Lotterywest at this point is for continued growth, and consequently growth in our returns to our beneficiaries – many of whom are organisations serving the most disadvantaged of our community. Our aim is to continue to support them in their important work for our community. Again, my thanks go to my fellow Board members for their contribution during the past 12 months, and our congratulations go to the executive team and staff at Lotterywest for an excellent year’s work. I thank our Minister, the Hon Eric Ripper MLA, Deputy Premier; Treasurer; Minister for Government Enterprises; Minister Assisting the Minister for Public Sector Management, and his Parliamentary Secretary, the Hon Kate Doust MLC for their enthusiastic support and representation of Lotterywest during 2005/06. CLYDE BEVAN Chairman 8 of 119 Lotterywest Annual Report 2006 CEO’s Report CEO’s Report Playing games, competing with each other, and staking wages on those games, are documented as a unique feature of human behaviour as far back as archeological records can take us. History tells us there have been State authorised lotteries as early as the 15th and 16th century in Europe and the East, raising money for causes as diverse as the sewage system for London, orphanages in Portugal and the construction of the Great Wall of China. So there is nothing new about State authorised gaming. In recent years however we have seen the global gambling industry develop in a way never seen before, driven by the possibilities offered by modern technology, increased leisure time and booming economies in many parts of the Western world. The casino industry is expanding in almost every country, there are now electronic gaming machines (poker machines) in every state in Australia except Western Australia. Internet gaming now has an estimated global turnover of $15 billion and sports betting has extended far beyond horse racing to include the opportunity to bet on virtually every Jan Stewart kind of sporting event in the world. CEO It is in this competitive environment that most State authorised lotteries in the world are already at a mature stage of development and are working to maintain growth, while upholding standards of corporate social responsibility. The total global turnover of traditional lottery games – ie. Lotto and numbers games, Keno, sports lotteries, draw lotteries, and instant lotteries, is now reported to be $182.4 billion (La Fleur’s magazine reporting to 2005 world wide lottery sales). We at Lotterywest are pleased to report a sales growth of 5% for the 2005/06 financial year. Lotterywest Annual Report 2006 9 of 119 Lotto remains the world’s favourite lottery game (as it is for Western Australia), whilst recent figures internationally show an 11% average fall in Lotto sales, it now represents 42% of total global lottery sales.
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