Where the money goes.

Since the Montana Lottery sold its first ticket in 1987, it has transferred approximately $173.9 million to the State of Montana.

Since 1995, following legislative action, Lottery proceeds have gone to the state's General Fund. The General Fund provides money for state programs which do not have dedicated revenue sources, such as education, health, and public safety, to name a few. Where Lottery proceeds go is a function of the Legislature, not the Montana Lottery.

For fiscal year (FY) 2010, which ended on 6/30/10, the Montana Lottery's transfer to the General Fund was over $10.5 million.

Here's an illustration of fiscal year 2010's performance, based on total revenue of $46.9 million:

Prizes

By law a minimum of 45% of all sales must be paid in prizes. Since 1987 through FY 2010, the Lottery has paid over $381 million in prizes.

Retailer Commissions

Retailers earn 5% on all ticket sales and have the opportunity, through their Scratch ticket sales, to earn up to an additional 5%. To date, retailer commissons total $42.9 million.

Ticket Costs

They include the costs for printing Scratch tickets and the fee-for-ticket (Lotto and Scratch) paid to our Lottery operating system vendor.

Operations

The Montana Lottery is responsible for the marketing and sales of all Lottery products; for public and media relations; for the security of all aspects of the Lottery; for warehousing and inventory control; and for Lottery operations, which include accounting, fiscal management, and information technology.

Proceeds to the state's General Fund

Beginning July 1, 1995, Lottery net revenue has been transferred on a quarterly basis to the state's General Fund. In fiscal year 2010, the Lottery provided the General Fund approximately $10.5 million. Through FY 2010, the Lottery has transferred over $121 million to the General Fund.

Product costs

Product costs such as retailer commissions and ticket costs are directly related to ticket sales. As sales change, these expenses increase or decrease accordingly.

Over the years, the Montana Lottery has shown efficiency in the area of non-product expenses such as personnel, advertising, rent, and other administrative expenses. The chart below shows these expenses over the past five fiscal years, both in dollars and as a percent of total revenue.