Benefiting Education and Institutions Since 1970
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Benefiting Education and Institutions Since 1970 NEW JERSEY LOTTERY 2016 ANNUAL REPORT 1 GOVERNMENT LEADERSHIP in Fiscal Year 2016 Andrew P. Sidamon-Eristoff State Treasurer Kim Guadagno Served: Feb. 2010-Nov. 2015 Ford M. Scudder Lieutenant Governor State Treasurer Served: Nov. 2015-Present Chris Christie Governor LOTTERY COMMISSIONERS Frank V. Ragazzo Thomas Tucci, Jr. Vice Chairman Al Alvarez, Esq. Chairman Commissioner Patrick P. Toscano, Esq. Commissioner Robert J. D’Anton Robert Slater Commissioner Commissioner TABLE OF CONTENTS NEW JERSEY LOTTERY Executive Director’s Letter............................... 2 MISSION STATEMENT Lottery Leadership Senior Staff....................... 3 Giving Back ....................................................... 4 The mission of the New Jersey Responsible Play............................................... 5 State Lottery is to raise revenue for Pick-3.................................................................. 6 maximum contribution to State education Pick-4.................................................................. 7 and institutions benefiting the citizens of New Jersey Jersey Cash 5 .................................................... 8 through the responsible sale of lottery products. Pick-6 XTRA ....................................................... 9 This is accomplished by providing entertaining products through a dynamic public business CASH4LIFE ........................................................ 10 enterprise built upon honesty, integrity, Mega Millions with Megaplier®....................... 11 customer satisfaction, teamwork, 5 Card Cash....................................................... 12 and public/private partnerships. Fast Play ............................................................. 13 Powerball with Power Play®.............................. 14 Instant Games ................................................... 16 Northstar New Jersey Lottery Group ............. 18 Winners and Promotions ................................. 20 Financial Statements ........................................ 21 NEW JERSEY LOTTERY 2016 ANNUAL REPORT 3 EXECUTIVE DIRECTOR’S LETTER Fiscal Year 2016 was another highly successful year for the New The Validations Unit of Jersey Lottery. It continues to hold its position as one of the top Lottery, which receives ten revenue producing lotteries in the country. Lottery sales claims by mail and in topped $3.3 billion making 2016 the seventh consecutive year person at the Lottery of increased revenue. The Lottery State contribution was $987 headquarters, processed million making it the largest conventional contribution in New more than 66,000 winner Jersey Lottery history. claims in FY 2016. That was a year-over-year These achievements were accomplished by incorporating increase from over 56,000 the diverse perspectives of Lottery staff and shaping them claims, highlighting the into actionable tasks for today and plans for the future. operational management Their insights define department goals, set priorities and goal of increasing staff implement change. The outcome of which has enabled us to productivity and ensuring no Carole Hedinger, CPA expand products and services, increase efficiency, heighten job is left undone. Executive Director productivity, and become an industry trend-setting lottery. Additionally, retailer instant ticket accounting challenges were The Lottery expanded its product line with the addition eased by leveraging International Gaming Technology (IGT) of two new game styles, Fast Play and 5 Card Cash. To instant ticket inventory tracking software, Smart Count, at an support the 5 Card Cash game a new in-house game increased number of retail locations. drawing studio was built. Maintaining drawings in-house is operationally cost efficient and keeps Lottery staff Retailer Advisory meetings were conducted to obtain integral to the process. The 5 Card Cash drawing room valuable feedback from retailers that resulted in the complements the two professional television studios also development of a new terminal report and changes to housed at Headquarters and managed by Lottery staff. point-of-sale materials. Customer services were expanded for our players in various ways. One high technology addition was the upgrade of the Lottery mobile application. The enhancement enables players to scan their Lottery Carole Hedinger was awarded the ticket to determine whether it is a winning ticket. Major Peter J. O’Connell Lottery Industry Lifetime Achievement Award by the Public The retailer services team heightened their Gaming Research Institute in 2016 for her productivity when sales force automation software dedication, contribution and great success in Government Lotteries. was implemented to improve retailer sales discussions and to show retailers how to increase lottery sales efficiency. 2 NEW JERSEY LOTTERY 2016 ANNUAL REPORT Northstar New Jersey Lottery Group (NSNJ) has provided Lottery staffs for its successful completion. The Lottery is the first in with an additional team that is developing and executing many the nation to have achieved this level of preparedness. of these efficiencies. The relationship between Lottery and NSNJ has increased the structural integrity of the organization with Current Lottery revenue has increased by more than $1 billion since the benefit of advanced technology, highly trained sales staff Fiscal Year 2003. With only modest population growth in the state and strong creative efforts. The rate at which we can implement during that time period, the success is attributable to an expansion improvements has been exponentially increased due to the of our customer base and increased product popularity. growth management services agreement with NSNJ. The Annual Report highlights many of the Lottery’s Additionally, we ensured that the New Jersey Lottery will accomplishments. It also features the Lottery Organizational be able to maintain its essential functions by creating a Structure by noting each Section, its assigned function and the fully functional Back-up Continuity Site (BCS). The BCS is an leadership who has nurtured ideas, making them actionable alternate location from headquarters at which the Lottery can tasks with measurable outcomes. It is with great pride that I operate completely, including performing daily draws, if the share with you the New Jersey Lottery 2016 Annual Report. headquarters is rendered non-functional. This monumental project required the combined efforts of the Lottery Very truly yours, Information Technology, Finance, Facilities, and vendor, IGT, Carole Hedinger, CPA LOTTERY LEADERSHIP SENIOR STAFF l-r - seated: Carole Hedinger, Executive Director; R. John Custodio, Deputy Executive Director. l-r - standing: Richard Pagnani, IMS Manager; Duane Daniels, Deputy Director, Security; Margaret Square, Deputy Director, Operations; Michael DeCheser, Director, Media and Broadcast; Judith Drucker, Chief Communications Officer; Megan Mazzoni, Deputy Director, Administration and Compliance; John White, Deputy Director, Finance. NEW JERSEY LOTTERY 2016 ANNUAL REPORT 3 NEW JERSEY LOTTERY GIVING BACK NEW JERSEY LOTTERY BENEFITS EDUCATION AND INSTITUTIONS The New Jersey Lottery reported the seventh consecutive year of increased ticket sales with Fiscal Year 2016 revenue of $3.29 STATE OF NEW JERSEY PROGRAMS SUPPORTED BY STATE LOTTERY billion. Increased sales resulted in a record-breaking contribution RESOURCES FOR THE YEAR ENDED JUNE 30, 2016 of $987 million to the State on behalf of Lottery beneficiaries, (Amounts expressed in thousands) up from $960 million in Fiscal Year 2015. New Jersey Lottery Amount Expended and/or Encumbered (a) contributions provide vital funding to education and institutions DEPARTMENT OF AGRICULTURE making everyone in the Garden State a winner. The Lottery is the School Nutrition $ 3,410 State’s fourth largest revenue producer. DEPARTMENT OF EDUCATION Since its inception in 1970, the Lottery has Marie Katzenbach School for the Deaf 4,431 dedicated more than $24.9 billion to Non-Public School Aid 47,024 Our REAL programs and institutions that benefit Statewide Assessment Program (Grades 4, 8, 11) 15,806 millions of New Jersey residents. The TOTAL DEPARTMENT OF EDUCATION 67,261 WINNERS Departments of Agriculture, Education, HIGHER EDUCATIONAL SERVICES Human Services, Military and Veterans Senior Public Institutions-Operating Aid 385,845 don’t need Affairs and Higher Education Services Tuition Aid Grants 222,511 receive support from Lottery-generated tickets. Higher Education Capital Improvement Plan-Debt Service 21,619 revenue. Some of the programs and Opportunity Program Grants 14,405 institutions that receive Lottery funding Higher Education Facilities Trust Fund 10,904 include the: School Nutrition Program, Tuition Supplementary Education Program Grants 7,088 Aid Grants, Student Tuition Assistance Reward Student Tuition Assistance Reward Scholarships (NJStars) 3,824 Scholarship (NJ Stars), Marie Katzenbach School for the Deaf, centers for developmentally disabled, state psychiatric hospitals Aid to Independent Colleges and Universities 554 and homes for New Jersey’s disabled soldiers. Governor’s Urban Scholarship Program 523 TOTAL HIGHER EDUCATIONAL SERVICES 667,273 New Jersey Lottery players also had a record-winning year with DEPARTMENT OF HUMAN SERVICES $2.0 billion paid in prizes up from $1.8 billion in Fiscal Year 2015. Operation of Centers for Developmentally Disabled 70,075 Nearly 113 million winning tickets were validated and paid