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V.I. LOTTERY LOSING MORE AND MORE MONEY

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Sept. 7, 2001 — Listening to the top V.I. Lottery official describe the financial state of the system to senators on Thursday, a betting person could get the impression that the odds of its survival aren't good.
The Lottery director, Austin Andrews, told the Senate Finance Committee that the system’s games are losing money — and therefore it hasn't been able to make its required biweekly payment of 5 percent of gross revenues to the General Fund.
According to a federal audit, as of the end of Fiscal Year 1999, the system owed the General Fund $3.3 million.
"The Lottery is struggling," Andrews said. "The Lottery will have a problem breaking even at the end of [fiscal year] 2001, let alone making a profit."
Andrews said that by the end of the fiscal year on Sept. 30, the Lottery will have a net loss of $200,000. About half of the Lottery revenues go to pay prizes.
To stem the losses, Andrews said, he is considering phasing out the traditional sheet tickets and going with less cost-intensive scratch-off games instead.
The federal audit of the V.I. Lottery earlier this year covered Fiscal Years 1998 and 1999 and other years deemed appropriate by inspectors. For FY 1998 and 1999, revenues totaled $27.7 million while expenditures were $28.1 million. Losses were recorded of $120,062 for 1998 and $268,904 for 1999.
Andrews said Thursday that Lottery revenues shrank from $14.6 million in Fiscal Year 1999 to $14.2 million in FY 2000. And, he said, revenues for the first three quarters of this fiscal year are down 10 percent from the period last year.
Andrews told the committee that the Lottery can survive only by adding new games and improving its marketing of existing games, particularly scratchers.

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