Public Lotteries: report for 2013.

STATES OF JERSEY

PUBLIC LOTTERIES: REPORT FOR 2013

Presented to the States on 4th March 2014 by the Minister for Economic Development

STATES GREFFE

2014   Price code: B  R.23

REPORT

Introduction

The  Minister  for  Economic  Development,  in  accordance  with  the  provisions  of Regulation 4(4) of the Gambling (Channel Islands Lottery) (Jersey) Regulations 1975, is pleased to submit to the States a report of all Public Lotteries promoted from 1st January 2013 up to and including the Christmas Draw of 19th December 2013, together with an income and expenditure account and balance sheet.

Overview of the Channel Islands Lottery

Policy for the Lottery in 2013 was decided by the Minister for Economic Development in Jersey, Senator A.J.H. Maclean, and the Culture and Leisure Board Member in Guernsey, Deputy F. Quin.

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 any Draws held in Jersey. Its Members, until September 2013, were –

Mr. I.T. Barnes (Chairman) Mr. P.S. Cruickshank

Mr. D.A. Wallis

Mr. G.J. Roscouet

Ms M. Horton

Mr. A. Garnier

Mr. D. Scott (Secretary).

New terms of reference are being drafted for the Board to reflect the improvements made to the Channel Islands Lottery in Jersey since 2011 and the changing role of the Public Lotteries Board. Once finalised, a recruitment process will be undertaken.

In February 2014 I was informed of the sad news that Mr. Geoff Roscouet, who had served with integrity on the Public Lotteries Board since 1998, had passed away after a short illness.

The policy of the Minister for Economic Development

In keeping with recent practice, the Minister brought a Proposition to the States in 2014 (P.22/2014), asking for approval that the total Jersey portion of the profits of the Channel Islands Lottery for 2013 should be paid to the Association of Jersey Charities for the benefit of the community and the charitable needs of the Island. As last year, P.22/2014 does not recommend the withholding of a percentage of the annual profit, as  both  Economic  Development  and  the  Treasury  are  satisfied  with  the  amount currently held in reserve.

The 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 is

the  Minister's  recommendation  to  the  States  that  these  funds  be  granted  to  the Association of Jersey Charities.

Should  the  States  adopt  P.22/2014  unamended,  the  grant  due  to  be  paid  to  the Association of Jersey Charities for the year is £684,555, an increase of £282,853 on 2012.

During 2013 the Channel Islands Lottery in Jersey continued to be developed and improved, following the contract agreed with Scientific Games International Limited in 2011. The main aim of the Channel Islands Lottery in Jersey is to raise much- needed money for local good causes; however, the Lottery also benefits local retailers through commission, footfall, and ancillary in-store spend.

The win ratio and percentage payout of each finite game was published on each scratch-card ticket reverse.

The Christmas Lottery Draw

The planning and promotion of the Christmas Lottery remains the most important of the year and continues to draw significant public interest and support. In order to maintain this, both the Minister for Economic Development in Jersey and the Culture and Leisure Member in Guernsey were strongly of the opinion that the minimum First Prize would start at £300,000 as in 2012.

1,500,000 tickets priced at £2 each were printed for this Lottery Draw.

The Minister reports that 892,600 tickets were sold from a Jersey issue of 900,000. Guernsey sold 588,500 paper tickets out of 600,000.

The Channel Islands Christmas Draw achieved a top prize of £1,038,000, an increase of £352,000 on the previous year.

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

The Summer Lottery Draw

Recent years have seen attempts to re-establish a Summer Lottery as a way of raising additional funds for local good causes. Consequently, a Summer Draw was again held in 2013. As a trial change to the Draw format, the ticket price increased to £10 per ticket as a mechanism of maximising the First Prize. Unfortunately, as in 2012, the Summer Lottery was not the success all parties had hoped for, resulting in a loss of £52,547.

As Guernsey do not possess the same motivation to re-establish a Summer Lottery (only the profits of the Christmas Draw are distributed to charity in Guernsey), and therefore structuring a Draw with a sufficiently attractive prize fund is impossible without a high individual price point, it is unlikely that the exercise will be repeated in 2014.

Marketing and promotion

Marketing and promotion for the Channel Islands Lottery was undertaken by the Departments' Officers in both Islands.

Ticket sales in 2013

Ticket sales for the year (inclusive of the Christmas Draw) totalled 3,943,480, with 1,850,880 being sold in Jersey and 2,092,600 in Guernsey.

The Lottery website at www.gov.je and social media

As previously, the winning numbers 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  290 Jersey charities. The Minister continues to support their efforts for local charitable causes, and recognises 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 £30,000 are considered by the Executive  Committee  at  their  quarterly  meetings.  From  September  2003,  the maximum grant available was £20,000 in any 2 consecutive financial years, but since 30th September 2008, this has been changed to £20,000 in any one year. This has now been increased to a maximum of £30,000 per annum, after a vote at the AGM in June 2012.

The relationship whereby the Minister is able to provide funding to the Association, who are then able to assist its membership, works extremely well. The grants approved in 2013 by the Association of Jersey Charities are listed in the table below, and illustrate the very real benefits accrued by Lottery profits for Jersey's good causes.

States of Jersey recharges

The Economic Development Department manage, operate, and administer the Channel Islands Lottery in Jersey. For this, the figure of £73,000 was recharged to the Lottery in 2013.

The Shared Services Division of Treasury and Resources provide vital support for the Channel Islands Lottery. This includes services such as preparing accounts on behalf of both Islands, reconciling winning tickets, auditing accounts, together with being present at the Christmas Lottery Draw, for which the Treasury charged the Lottery a fee of £32,400.

The Minister for Economic Development would like extend his thanks to the relevant staff of the Shared Services Division of Treasury and Resources for their dedication to and support of the Channel Islands Lottery.

The final accounts for the C.I. Lottery (unaudited) up to December 2013 are noted overleaf.

Channel Islands Lottery (Jersey) Fund

To promote and conduct public lotteries in aid of good causes Summary Snapshot  Changes in Net Asset Value from 2012

The increase in Net Asset Value (NAV) from 2012 is  £4,467.  This  is  the  unrealised  gain  on  the Common Investment Fund (CIF) in 2013 and is not for distribution.

For 2013, it has been determined that 100% of the distributable  profit  of  £684,555  will  be  made available as a grant for the Association of Jersey Charities in 2014.

Channel Islands Lottery (Jersey) Fund Net Asset Value over time

Performance compared to 2012

(Total NRI)  Performance of CIF Investments

Key Variances from 2012  The Channel Islands Lottery (Jersey) Fund participates

in a range of CIF pools.

Investments  are  held  by  the  CIF,  which  recognises income,  expenditure  and  gains/losses  on  Investments. The Fund recognises only gains or losses on the units held in the CIF.

The 109.6% decrease in net revenue income  (NRI)  in  2013  is  due  to  a  decrease  in  the  unrealised  gain  on  the  CIF,  as  explained  above.  

An increase in combined Jersey and Guernsey  sales  was  £2,372,098  (42.0%)  compared to  2012.  £840,200  of  this  was  directly  attributable to the success of the Christmas  Draw.  

A corresponding increase in expenditure of  £2,224,567 (42.1%) included an increase in  prizes  paid  and  uncollected  prizes  of  £1,961,628,  an  increase  in  commission  on  The table below shows the share of transactions in the sales of £192,917, and an increase in printing  CIF attributable to Fund.

costs of £67,201.

The  Summer  Draw  (tickets  sold  only  in Jersey) produced a loss of £52,547. This loss arose due to lower than expected ticket sales.

Overall,  increased  sales  exceeded  increased costs and the result was an increase in the total profit of the Lottery of 67.6% compared with 2012. Total profit is defined as the profit before  distribution,  including  income  from time-expired prizes.

CIF Amounts Attributable to the Channel Islands Lottery (Jersey) Fund

In 2013, the grant to the Association of Jersey Charities increased by £282,853 (70.4%) as a result of higher distributable profits than in 2012, as explained above.

Statement of Comprehensive Net Expenditure

Statement of Financial Position