Director’s Comments

Presentation to California State Lottery Commission

September 27, 2012Director’s Report 6A

Overview

• General Business Update

• Major Budget Changes

• Operational Updates

• Projects Update

General Business Update

• Final results in for Fiscal Year 2011/12– $4.371 billion in sales, a 27% increase over FY 2010/11– $1.32 billion to education, a 17% increase over FY 2010/11

• Lottery experienced the “Summer Slump” that has occurred in previous years

• Instituted a bonus program for players and retailers to generate sales

• Revenues in Fiscal Year 2012/13 are 10% below goal, but 20% ahead of last year at this time

General Business Update

Major Budget Changes

• Implementation of Powerball moved up from July 1, 2013 to April 8, 2013

• Eliminated use of Retired Annuitants and Student Assistants per Governor’s Executive Order– 24 SAs/RAs eliminated FY 2011/12– 29 SAs/RAs in FY 2012/13

• Received Commitment from CVS for increased participation – 205 Current CVS retailers to convert to new business

model– 314 new CVS retail outlets in No. California

Operational Updates

• Cal-Card Visa Deactivations• Provision of Attire to Sales Staff• Letters to Low Volume Retailers• Scratchers RFP/Implementation Timeline

Extended• Focus on Activations/Sales Staff Accountability• Developing Loyalty Program RFP

Project Updates

• Supply Chain Management Study• District Office Consolidations Put on Hold

– East Bay / San Francisco– San Diego / Santa Ana

• Regulatory Review Effort On-going• Completion of Contract Management Study• Completion of Customer Contact Center Study