Hoosier Lottery director 'pleased' with private operator despite miss of profit goal



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INDIANAPOLIS — The Hoosier Lottery director said Tuesday that she is "pleased" with the performance of the lottery's private management company during its first year, during which the firm fell slightly short of its net income goal but still raised a record amount of money for the state.

Lottery officials announced Tuesday that profits for fiscal year 2014 came within $1.6 million of the $256 million goal included in the contract that Rhode Island-based GTECH Corp. was awarded in 2012. The lottery said GTECH is paying to make up that shortfall. Officials also said the lottery profit turned over to state coffers is 12 percent greater than the previous high of $224 million a year ago.

Total revenue also hit a record high of just more than $1 billion, up 9 percent from the previous record two years ago, officials said.

"We are pleased with the financial results achieved in the first full fiscal year of the Hoosier Lottery's contract with GTECH Indiana," said Hoosier Lottery Executive Director Sarah Taylor.

Illinois officials said last week the state would end its contract with a GTECH affiliate because it hadn't met state lottery sales goals since winning that contract in 2010.

"I do know the team that worked on our contract learned from contract agreements in Illinois, to craft it, make it better for the Hoosier state so we are glad about the agreement we have here," Taylor said.

GTECH's shortfall payment of $1.6 million would have been greater, but the company voluntarily reduced its management fee and granted a $2.8 million credit to the lottery commission. The company also underspent its budget for direct lottery expenses, such as instant-ticket printing and advertising, by $2.3 million.

GTECH has promised to generate $1.76 billion in Hoosier Lottery profits over the first five years of its 15-year contract.

The decision by Illinois Gov. Pat Quinn to end that state's relationship with Northstar Lottery Group came three years into a 10-year contract. Northstar, which is 80 percent owned by GTECH, failed for a third year in a row to fulfill the sales promises it used to win its bid in Illinois in 2010.

Colin Hadden, GTECH Indiana's chief operating officer and general manager, said in a statement the company was pleased with its first-year performance in Indiana.

"We look forward to continuing our collaboration with the Hoosier Lottery," he said.

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