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Public Lotteries: report for 2011.

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STATES OF JERSEY

PUBLIC LOTTERIES: REPORT FOR 2011

Presented to the States on 28th February 2012 by the Minister for Economic Development

STATES GREFFE

2012   Price code: B  R.26

REPORT

Introduction

The  Minister  for  Economic  Development,  in  accordance  with  the  provisions  of Regulation 4(6) of the Gambling (Channel Islands Lottery) (Jersey) Regulations 1975, is pleased to submit to the States a report of the Public Lotteries promoted from 1st January 2011 up to 31st December 2011, including the Draw of 15th December 2011, together with an income and expenditure account and balance sheet.

Overview of the Channel Islands Lottery

Policy for the Lottery in 2011 was decided by the Assistant Minister for Economic Development in Jersey, the Connétable of St. Clement (L. Norman), and the Culture and Leisure Member in Guernsey, Deputy F. Quin. Following the elections in October 2011, policy for the lottery in Jersey was decided by the Minister for Economic Development, Senator A.J.H. Maclean.

Public Lotteries Board

The Public Lotteries Board is constituted in accordance with Regulation 3 of the Channel Islands Lottery (Jersey) Regulations 1975, for the purpose of advising the Minister on general matters connected with the Lotteries and for conducting the Draw held in Jersey. Its Members in 2011 were –

Mr. I.T. Barnes (Chairman)

Mr. P.S. Cruickshank

Mr. D.A. Wallis

Mr. G.J. Roscouet

Ms M. Horton

Mr. A.J. Arnold (resigned September 2011) Mr. A. Garnier

Mr. D. Scott (Secretary).

The policy of the Minister for Economic Development

Continuing recent policy, the Minister brought a Report and Proposition to the States, asking for approval that the total Jersey portion of the profits of the Channel Islands Lottery for 2011 should be paid to the Association of Jersey Charities for the benefit of the community and the charitable needs of the Island. The Proposition also asked for States approval to set aside as a reserve, 10% of the Jersey surplus for 2011.

The  remaining  90%  profit,  according  to  the  provisions  of  Regulation 4(5)  of  the Gambling (Channel Islands Lottery) (Jersey) Regulations 1975, would be applied in such a manner and for such purposes of public benefit as the States shall from time to time by Act direct. It was the Minister's recommendation to the States that these funds be granted to the Association of Jersey Charities.

The proposed transfer of 10% of the Jersey profits to the Accumulated Fund is to maintain a contingency for the Association of Jersey Charities, should sales of the Channel Islands Lottery decline, or should the States decide to distribute profits more widely.

The  grant  due  to  be  paid  to  the  Association  of  Jersey  Charities  for  the  year  is £419,572, a decrease of £4,127 on 2010.

During 2011, a number of the measures identified in the internal audit review of 2009 were implemented. This caused disruption in the supply of lottery tickets and upheaval for the retail network. Ticket sales in Jersey recovered towards the end of 2011, and the measures undertaken will begin to bear fruit in 2012. During 2011, the way both Islands purchased tickets from Scientific Games International was changed from a price per thousand to a percentage of sale. This followed the tender exercise in 2010 and  is  designed  to  leverage  Scientific  Games'  expertise  in  ticket  design,  game structure and marketing.

The Economic Development Department is acting as main agent for the Channel Islands Lottery in Jersey until a partner to store, distribute, merchandise, and reconcile tickets can be found as a result of a tender exercise in early 2012.

The win ratio and percentage payout of each game was published on each ticket reverse.

The Christmas Charity Draw

The  planning  and  promotion  of  the  Christmas  Charity  Draw  remains  the  most important of the year, and continues to draw significant public interest and support. In order to maintain this, both the Assistant Minister for Economic Development in Jersey, and the Culture and Leisure Member in Guernsey, were strongly of the opinion that the First Prize had to be seen to be rising steadily, and it was agreed that the minimum First Prize would start at £300,000 as in 2010.

2,600,000 tickets were printed for this Draw, 300,000 more than in 2010. In addition to this figure, tickets were available via electronic terminals in Jersey only.

The Minister reports that 1,362,500 tickets were sold from a Jersey issue of 1,560,000, representing  a  decrease  of  57,500  (4%)  on  Jersey  sales  over  the  previous  year. However, in addition to this figure, 17,189 tickets were sold via electronic terminals. Guernsey sold 927,200 tickets, representing an increase of 47,200 (5.3%) on their sales over the previous year.

The Channel Islands Lottery achieved a top prize of £751,500, exceeding the £750,000 achieved the previous year.

Finally, special mention must be made of the vital part played by the Islands' media for broadcasting and printing the regular press releases, which played an invaluable part in the successful promotion of the Draw.

The Lottery Show

The Christmas Lottery Draw was broadcast by Channel Television. The appreciation of the Minister goes to Mrs. Karen Rankine, Managing Director (Broadcast) and the staff at Channel Television for their continued support.

Marketing and promotion

Marketing for the Lottery was undertaken by the Departments' Officers in both Jersey and Guernsey.

The year's ticket sales

Ticket sales for the year (inclusive of the Christmas Draw) totalled £3,992,711, with £2,174,211 being sold in Jersey and £1,818,500 in Guernsey. This showed a combined sales increase of 6.17%, with Jersey sales down 2.94% and Guernsey up 19.6%.

There were 9 scratch-card games promoted throughout the year. £1,685,809 worth of tickets  was  sold  in  total  (£794,509  worth  of  tickets  in  Jersey  and  £891,300  in Guernsey). Jersey sales were down 3.11% and Guernsey sales up 39.17%.

The Lottery website at www.gov.je  

Once again, the Lottery results for the Christmas Draw were made available through the States of Jersey website.

The Association of Jersey Charities

Founded  in  1971,  the  Association  of  Jersey  Charities  now  represents  277 Jersey charities. The Minister continued to support their efforts for local charitable causes and recognised the importance of Channel Islands Lottery profits as the mainstay of the Association's funding. The provision of the States grant is governed through a Service Level Agreement.

Grant applications from members up to a maximum of £20,000 are considered by the Executive  Committee  at  their  quarterly  meetings.  From  September  2003,  the maximum grant available was £20,000 in any 2 consecutive years, but since 30th September 2008, this was changed to £20,000 in any one year.

The relationship whereby the Minister is able to provide funding to the Association, who are then able to assist its membership, works well. The grants approved in 2011 by the Association of Jersey Charities are listed below and illustrate the very real benefits accrued by Lottery profits for local good causes.

List of Applications Approved in 2011 (from the 2010 Grant)

Applicant  Project  £

Little Sisters of the Poor  Towards major refurbishment  20,000.00 Community Savings Ltd.  For up to 3 part-time staff salaries  20,000.00 Friends of the Bridge  For up to 39 play-scheme places  5,000.00 Tools for Self-Reliance  Half the cost of a replacement van  2,307.00 Triumph Over Phobia  For training, books and running costs  5,000.00 Duke of Edinburgh Award  Towards Assistant Youth Worker salary  10,000.00 7 Overseas (Jersey) Squadron  Refurbishment of shower-block  20,000.00 Jersey Employment Trust  Towards refurbishment of 2 workshops  20,000.00 St. John Ambulance  Towards cost of a new ambulance  20,000.00 Jersey Citizen's Advice Bureau  Debt Advisor salary  16,008.00 Roseneath Centre  Team Leader salary  16,666.00 Société Jersiaise  Decoration and presentation equipment  627.30 Jersey Child Care Trust  Language for Life training and 5 assisted nursery places  20,000.00 ACET Jersey  Part HIV/AIDS Educator salary  20,000.00 Headway (Jersey) Limited  Physiotherapist salary and minibus running costs  20,000.00 Jersey Association of Cancer Nurses  To host a medical conference  3,750.00 Good Companions Club  For CCTV security system  4,136.00 Centre Point Trust  To cover transport costs for one year  20,000.00 Jersey One World Group  2 year salary for Educational Officer  6,000.00 Jersey Heritage Trust  Catalogue update costs  7,780.00 Maison des Landes Trust  Towards conversion costs  20,000.00 Glanville Home  Redecoration, tarmac and railing repairs  19,220.00 Silkworth Lodge  To replace heating system and replacement windows  14,805.00 Abbeyfield Jersey Society  Refurbishment  20,000.00 George V Cottage Homes Residents'  Travel and catering costs  1,220.00 Association

Gorey Youth Project  Youth Worker part salary for 2 years  20,000.00 Move On Youth Project  Kitchen equipment and building work  20,000.00 Jersey Council on Alcoholism  New central heating and oil tanks  16,061.00 Jersey Youth Trust  Website and counselling staff costs  20,000.00 Shelter Trust  Refit of new accommodation  20,000.00 Durrell  Disabled toilets, access, hearing loop  20,000.00 Société Jersiaise  Decoration and presentation equipment  17,405.00 Brig-y-Don  Admin salary and computer set-up  19,180.00 Arts in Health Care  Towards 3 concerts  9,000.00 JASS  Physiotherapist costs  600.00 Brighter Futures  Part salary of bi-lingual facilitator  10,089.00

Total:  504,854.30

States Treasury Recharges

The Department has a Service Level Agreement with the Shared Services Division of Treasury  and  Resources  for  financial,  administrative  and  audit  support  with  the C.I. Lottery. This includes services such as preparing accounts on behalf of both Islands, reconciling winning tickets, paying commissions, auditing accounts and being present  at  the  Christmas  Lottery  Draw,  and  for  which  the  Treasury  charged  the Department a fee of £16,500.

The Minister would like to thank the relevant staff of the Shared Services Division of Treasury and Resources.

The final accounts for the C.I. Lottery (unaudited) up to December 2011 are noted overleaf.

Highlights

Closing Net Asset Position of £576,462, an increase of 9.4% on 2010. Net Revenue Income of £49,315, an increase of 4.8% on 2010

Key Results

 

Changes in N.A.V.

£'000 527 2,180 1,100 (2,425) (386) (420)

Changes in Net Asset Value from 2010

The States agreed to hold the grant to the Association of Jersey Charities in 2011 at 90% of the total distributable profits (£466,191) with the remaining 10% being retained by the Fund. The Net Asset Value (N.A.V.) of the Fund increased by the amount of the retained profits (£49,315) (9.4% of opening N.A.V.).

2010 N.A.V.

Jersey Ticket Sales Guernsey contribution Prizes

Other I&E

Grant paid (90%)

2011 N.A.V.

576

 

Key Variances from 2010

£'000 47 (188) 36 237 (4) (79)

The Fund also invested monies previously held in the consolidated fund in the C.I.F. during 2011, as detailed below.

Performance compared to 2010

The N.A.V. of the Fund has increased in line with policy by the 10% retained profits. Profits are calculated as ticket sale income, less prizes and operating costs:

2010 N.R.I.

Guernsey's contribution Jersey ticket sales

Other Operating Expenditure Grant to Charities

Other variances

2011 N.R.I.

49

Guernsey's contribution to Prize Fund

£188,150 (20.6%) more than 2010

Guernsey's contribution to the Prize Fund increased by 20.6% in 2011 due to increased ticket sales in Guernsey.

Sales of tickets in Jersey

£35,638 (1.6%) less than 2010

Sales of tickets in Jersey decreased by 1.6% due to lower sales of Christmas Lottery tickets

Other Operating Expenditure

£236,707 (10.8%) more than 2010

Other Operating Expenditure increased by £236,707 compared with 2010. This was due to increases in prizes paid and unclaimed prizes of £259,572, offset by a decrease in the amount of unclaimed time-expired prizes of £22,865.

Grants and Subsidies Payments

£4,127 (1.0%) less than 2010

The grant to the Association of Jersey Charities decreased in 2011 as a result of lower distributable profits than in 2010.

 

 

Performance of C.I.F. Investments

The C.I. Lottery (Jersey) Fund joined the C.I.F. on 1st July 2011, investing in the long-term cash and cash equivalents pool.

Investments  are  held  by  the  C.I.F.,  which  recognises  income,  expenditure  and gains/losses on Investments. The Lottery Fund recognises only gains or losses on the units held in the C.I.F. in the O.C.S.

The table below shows the share of transactions in the C.I.F. attributable to the Fund.

States of Jersey – Common Investment Fund Attributable to the Channel Islands Lottery (Jersey) Fund

2011 £'000

Income  3 Expenditure  0 (Losses) on Investments held at Fair Value through the OCS*  0 Total Gains recognised in the Fund  3

* Under  FRS 25,  Unrealised  Gains  on  Investments  held  at  Fair  Value  through  the O.C.S. are now recognised through the O.C.S.

 

Operating Cost Statement

 

 

Sales of Goods:

  Guernsey Contribution to Prize Fund Sales of Services:

  Sale of tickets in Jersey

Loan, Bank and Notional Interest Gains/Losses on C.I.F. Investments Other Revenue

2011 Actual £'000

1,100

2,180 6

3 –

2010 Actual £'000

912

2,216 7

– 1

Total Revenue

3,289

3,136

Supplies and Services

Other Operating Expenditure Grants and Subsidies Payments

395 2,425 420

477 2,188 424

Total Expenditure

3,240

3,089

 

 

 

Net Revenue Income

49

47

No other gains or losses were recognized in the year.

Balance Sheet

 

 

2011 Actual £'000

2010 Actual £'000

 

Financial Assets

Investments held at Fair Value through OCS

529  

 

 

Total Fixed Assets

Current Assets

Debtors

Balance due from Consolidated Fund

529

681  374  

282  972  

Total Current Assets

Current Liabilities Creditors:

Balance held for the Association

of Jersey Charities Uncollected Prizes

Other Creditors

1,055

420  560  28  

424  222  81  

1,254

Total Current Liabilities

Net Current Assets/(Liabilities) Total Assets Less Current Liabilities

1,008

47

576

727 527 527

Net Assets

576

527

Reserves   Accumulated Revenue Reserves  576   527  

Total Reserves   576   527