2014 ANNUAL REPORT Benefiting Education and Institutions Since 1970 Table of Contents
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2014 ANNUAL REPORT Benefiting Education and Institutions Since 1970 TABLE OF Contents Government Leadership ......................................................................................... 3 Executive Director’s Letter .................................................................................... 4 Fiscal Year 2014 Highlights ................................................................................... 6 Where the Money Goes .......................................................................................... 8 Responsible Play........................................................................................................ 9 Building A Foundation for Growth with Northstar New Jersey .............. 10 Sales Force Expansion and Development ...................................................... 10 Retailer Expansion Using Cutting-Edge Technology .................................. 11 Marketing Optimization ......................................................................................... 12 “Happy Dance” Commercial ................................................................................. 14 Product Innovations ................................................................................................ 16 Pick-3 ............................................................................................................................. 16 Pick-4 ............................................................................................................................. 17 Jersey Cash 5 ............................................................................................................. 18 Pick-6 ............................................................................................................................ 19 CASH4LIFE ................................................................................................................. 20 Mega Millions .............................................................................................................. 21 Powerball® with Power Play .................................................................................. 22 VIP Club ........................................................................................................................ 24 Million Dollar Replay ................................................................................................ 24 Product Innovations ................................................................................................. 25 Instant Games ............................................................................................................. 25 Financial Statements ............................................................................................... 27 Government LEADERSHIP New Jersey Lottery has contributed more than Kim Guadagno Lieutenant Governor $23,000,000,000 in support of education, school construction and renovations, veterans’ Chris Christie Governor Andrew P. Sidamon-Eristoff homes, school nutrition State Treasurer programs, tuition aid Lottery Commissioners grants and so much more since 1970. Thomas Tucci, Jr. Frank V. Ragazzo Al Alvarez, Esq. Chairman Vice Chairman Commissioner Robert J. D’Anton Dr. Munr Kazmir Robert Slater Commissioner Commissioner Commissioner 2 NEW JERSEY Lottery 2014 Annual Report NEW JERSEY Lottery 2014 Annual Report 3 EXECUTIVE Director’S LETTER Over the past 43 years, the New Jersey Lottery grew from a grand concept with the goal of building After review by an size, provided training and NEW JERSEY a better future for Garden State residents into a multi-billion dollar business that provides residents independent adviser, a technology to support their Lottery mission with millions of dollars in support of vital educational programs and institutions. The business was Lottery Growth Management efforts and incentivized them built on the creative ideas of talented and dedicated people who were willing to take measured risks Services agreement was to perform optimally. The team statement in order to optimize rewards. signed with Northstar New expanded the ranks of our Jersey Lottery Group LLC retailers and built relationships The mission of the GROWING A BRAND Lottery history, (“Northstar”) on June 20, with corporate partners. New Jersey State It takes time: Ticket sales 365 days a year, 2013, to further increase during the first twelve years if a CASH4LIFE Lottery sales and revenue for Advertising and marketing Lottery is to raise of the lottery business were draw night falls on our beneficiaries. was reimagined, and the revenue for maximum nearly equal to the current Christmas day. Lottery brand took on a new fiscal year’s sales. The Lottery would continue to persona that included the contribution to It takes dedication focus on its core departmental introduction of Erica Young State education It takes exploration of new to create a strengths while contracting as Lottery television draw ideas: A State Lottery process: The external partners to manage hostess. Erica, the daughter and institutions Planning Commission, underpinnings of advertising, marketing and of the beloved, late, Hela benefiting the citizens established pursuant to a every organization sales. Advertising services Young, helped to re-launch an Joint Resolution on Nov. 11, are procedures already had been outsourced invigorated Lottery brand. of New Jersey 1970, explored the possibility and rules. There for many years. through the sale of of creating a Lottery and are seven distinct It was a year filled provided recommendations to departments After the agreement was with challenges and lottery products. Governor William T. Cahill. On within the Lottery signed, Lottery and Northstar accomplishments. Ultimately, We accomplish Feb. 16, 1970, he signed into that operate leadership worked to define there can be no progress individually the goals and monitor progress without trials. The true test of law the establishment of the Carole Hedinger, CPA this by providing Division of the State Lottery. while integrating Executive Director during the months leading an organization is its ability to entertaining products The Lottery began selling structurally. These up to the transition when define, reimagine and forge a weekly tickets to one raffle systems ensure standardization, quality control and efficient Northstar would manage sales, forward vision with conviction through a dynamic game for 50 cents a ticket use of time and resources while maintaining public integrity marketing and advertising. On and expertise — all of which public business and held its first drawing on and transparency. Optimum results require on-going review and Oct. 1, 2013, the transition was have been accomplished this Jan. 7, 1971. Today, the Lottery modification. successfully executed. year. I am proud to present enterprise built upon portfolio includes seven draw- the New Jersey State Lottery honesty, integrity, based games and more than Numerous small achievements over the years have set up the In subsequent months Fiscal Year 2014 in review. 40 instant scratch games. organization for future success. The Lottery brand has grown following the transition, customer satisfaction, Tickets are sold by more and changed in so many ways but it has always maintained its Northstar built and Very truly yours, teamwork, and public/ than 6,900 retailers across singular mission of providing a substantial revenue stream in strengthened the transitioned Carole Hedinger, CPA the state, seven days a week, support of the vital programs and institutions it supports. sales staff, increased the team Executive Director private partnerships. and now for the first time in 4 NEW JERSEY Lottery 2014 Annual Report NEW JERSEY Lottery 2014 Annual Report 5 July 1, 2013 – JUNE 30, 2014 JULY 2013 August 2013 August 2013 October 2013 November 2013 January 2014 July 8, 2013: The largest August 6, 2013: NJ Lottery This was the first time in October 1, 2013: Northstar November 27, 2013: NJ January 17, 2014: Player 2013 Pick-6 jackpot was won holds its “Not 18 Yet? No 20 years that two winning New Jersey Lottery Group Lottery partnered with the Mike Ducker said he caught in Morris County with an Bet” press conference jackpot tickets were sold begins the sales, marketing Council on Compulsive lightning in a bottle twice annuity value of $10.5 million. reinforcing the age limit for in the same state. The last and advertising services Gambling of New Jersey when he won $20,000, lottery play. time that occurred was on agreement. to discourage gifting of twice, in one week, with July 26, 2013: Today’s $19 December 22, 1993 and they lottery tickets to minors tickets purchased from the million jackpot-winning August 7, 2013: Two out were sold in the District October 22, 2013: Mega in advance of the holiday same store, playing the Mega Millions ticket was the of three jackpot-winning of Columbia. A Minnesota Millions game matrix change season. same game. fifth jackpot-winning ticket Powerball tickets were sold Lottery player claimed the makes the second prize sold in NJ during 2013. The in New Jersey. The annuity third winning ticket. $1,000,000 with the potential others were: Mega Millions value of each winning to win $5,000,000 with the on Jan. 25, May 17, May 31 ticket was $149 million. Megaplier option. Other and Powerball on March 23. changes will make more players winners of any prize. FISCAL YEAR 2014 Highlights January 2014 February 2014 MARCH 2014 APRIL 2014 JUNE 2014 JUNE 2014 January 22, 2014: