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An Audit: | |
Wisconsin Lottery | |
Department of Revenue | |
May 2011 | |
Report Highlights | |
A 1987 amendment to the Wisconsin Constitution allowed the Legislature
to create a state lottery and required that its net proceeds be distributed
for property tax relief. The Wisconsin Lottery began operations in the
following year and has been managed by the Department of Revenue
(DOR) since 1995. Lottery tickets are the Wisconsin Lottery’s primary
revenue source and are sold at more than
As directed by For the program evaluation, we:
Revenues and Expenses
Wisconsin Lottery sales increased
from
Sales of instant games declined
from
Wisconsin was one of three
midwestern states to experience a
decline in per capita lottery sales.
In contrast, per capita sales increased
in four other midwestern states
from
In FY 2009-10, the Wisconsin
Lottery’s operating expenses
totaled
Property Tax Relief
The Wisconsin Constitution requires
that net proceeds from the Wisconsin
Lottery be used only for property
tax relief, provided to owners of
primary residences in Wisconsin and
to certain farmland owners. From
Statutes require that each year at
least
Statutes limit certain Wisconsin
Lottery administrative expenses
to
Game Development and
Management
Effective game development and management help to maximize sales revenue and increase net proceeds available to fund property tax relief. To maximize game sales, the Wisconsin Lottery continually reviews the number and types of instant games it offers. Product information funds appropriated by the Legislature are used to publicize games.
The Wisconsin Lottery introduced
63 new instant games in
Fewer new games are being introduced
in order to manage instant
games more effectively, ensure
that an assortment of games is
available, and focus staff resources
on developing new game styles.
However, the Wisconsin Lottery
has indicated it will continue to
introduce higher-priced games in
response to players’ demand. For
example, a $15 game was introduced
for the first time in
Product Information
The Wisconsin Lottery contracts
with Hoffman York, a Milwaukee-based
advertising firm, for product
information services that publicize
lottery games. From
Wisconsin’s product information
expenditures represented
DOR had estimated that increasing
the Wisconsin Lottery’s annual
product information budget to
In 2008 (report
To aid in the development and
management of instant games, the
Wisconsin Lottery has implemented
an evaluation tool that calculates
each instant game’s
The evaluation tool now notes
the amounts spent to publicize
particular games, but the Wisconsin
Lottery continues to exclude
product information expenditures
in its calculations of a game’s net
sales. When we included product
information expenditures in the
evaluation tool, we found that net
sales for 12 instant games that were
introduced in The Wisconsin Lottery believes that product information expenditures cannot be easily or accurately associated with any one game’s resulting ticket sales and that publicity increases awareness of the Wisconsin Lottery in general, and likely increases sales of unpublicized games. However, the Legislature increased its product information budget, in part, because of assurances that doing so would increase sales.
If the Wisconsin Lottery no longer
believes the effects of the increased
product information budget can be
measured by ticket sales, it should
provide the Legislature with a better
way of measuring the effectiveness
of the
Recommendations
We include recommendations for the Wisconsin Lottery to: |
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