LANSING, March 17, 2003 – The Michigan Lottery is not only one of the most mature lotteries in the nation (at 30 years old), but according to a major gaming industry publication, it is also one of the most efficient.

In the March 2003 issue of International Gaming & Wagering Business (IGWB) – an independent and leading source of international lottery and casino information – the Michigan Lottery was ranked among the top 11 lotteries in the United States with regard to effectiveness and efficiency.

Five different rating factors were used in the study: sales as a percentage of personal income, revenue as a percentage of sales, revenue as a percentage of gross revenue, cents spent to generate one sales dollar and cents spent to generate one government dollar.  It is very difficult for any state lottery to rank high in all of these categories.  The Michigan Lottery is one of only eight lotteries in the United States to be ranked 11^th or better in all five categories.

Out of the 38 states who operate lotteries, Michigan ranked 11^th in efficiency in generating sales as a percentage of personal income.  Over the past 30 years, entertainment options have expanded rapidly for Michigan residents, therefore increasing the competition for Lottery players’ discretionary income.  The Michigan Lottery continues to use its advertising and promotion efficiently and effectively to attract players to its games.

"The Lottery’s games are just one of many entertainment options that Michigan residents choose from each and every day," Acting Lottery Commissioner James Kipp said.  "Each year the Michigan legislature appropriates a specific amount of money the Lottery can use for the advertisement of its products.  We carefully pick and choose how we are going to advertise our games through both print and broadcast mediums, and when those advertisements air, to ensure that we reach the maximum number of players all across the state."

The Michigan Lottery’s highest rank of 3^rd came in the category of efficiency with regard to revenue returned to the state as a percentage of sales.  The Lottery is a proud supporter of kindergarten through 12^th grade public education in Michigan and that support was shown in its 38.3 percent return of sales back to the state School Aid Fund.  This measure highlights that the Michigan Lottery maintains a good balance of prize payouts with sales, and shows the ability to keep costs low in order to raise the maximum amount of funds to support Michigan’s schoolchildren.  The only other state lotteries that ranked ahead of the Michigan Lottery in this category were Florida and Pennsylvania.

"In fiscal year 2002, the Lottery generated more than $613 million in revenue for the state School Aid Fund," Kipp said.  "On average, that would be approximately $11.7 million going into the state School Aid Fund every week, or $1.68 million per day!  Every time a Lottery player purchases a ticket, an average of 35 to 38 cents of that dollar is contributed to the state School Aid Fund."

The Michigan Lottery ranked 3^rd in the category of government revenue as a percentage of gross revenue.  Government
revenue represents the amount available for a lottery to turn over to the government based upon current-year operations and non-operating items.  This factor measures the Lottery’s ability to return money to the state after taking the payment of prizes into consideration.  The only state lotteries in the study that ranked ahead of the Michigan Lottery were Florida and New Jersey.

The Lottery ranked 11^th in the lowest amount of money spent to generate sales dollars.  This category measured the Lottery’s expenses, not including prizes, as a percentage of sales.  This ranking underscores the fact that the Michigan Lottery is very efficient at keeping its expenses low while generating revenue.

Finally, the Michigan Lottery ranked 6^th in cents spent to generate one government dollar.  This category measured the Lottery’s operating expenses compared to net income.  This ranking shows that the Michigan Lottery spends a minimum amount on operating costs to ensure that the maximum amount of funds are generated for the state School Aid Fund.

The IGWB report stated that "effectiveness and efficiency are often conflicting goals, and as a result, lotteries that perform well by both measures are rare.  Michigan was a very good performer during the year."  The Michigan Lottery is proud of its ranking in the IGWB study and strives to maintain its high efficiency ranking to ensure that the highest amount of funds possible are transferred to the state School Aid Fund.

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