The Corporation reported consolidated revenues of $3.675 billion and net earnings of $1.338 billion for the period. Thanksto strict expense control LotoQuebec was able to show net earnings similar to last year&8217;s figures despite an $80 milliondecline in sales.
In so doing the Corporation exceeded the expense reduction and increased productivity goals that had been set by the governmentas part of its law to return to a balanced budget. In this regard LotoQuebec achieved reductions of $14.9 million againsta target of $5 million in 20102011.
From a business point of view concerned sectors performed satisfactorily given the difficult environment. Thanks to Lotto Max&8217;s success lotteries brought in sales that were virtually identical to those of the previous year. Despite a significantdecline in the North American casino industry the four casinos experienced only a small drop in revenues. At Casino de Montreal major logistical challenges were met and staff continued to welcome clients while renovations valued at $306 million werebeing carried out.
Video lottery revenues decreased by 4.0% due to the economic slowdown and reduced network size. Lastly bingo activities weakenedby 2.2% despite the introduction of Kinzo a collective gaming concept that supports nonprofit organizations whose source of financing was lost when bingo halls closed.
ADOPTION OF THE 20102013 STRATEGIC PLAN
The product of collective reflection LotoQuebec&8217;s 20102013 strategic plan was ratified last fall by the Government&8217;s Cabinet. An indepth review of the Corporation&8217;s mission resulted in the identificationof future directions and a new framework for all its activities.
The document describes three major strategic directions specifically to channel game offerings in a controlled environmentto effectively oversee consumption and to improve the overall efficiency and performance of the Corporation. These directionshave led to an update of LotoQuebec&8217;s mission which is now &8220;to responsibly manage games of chance in a controlled and measuredfashion in the interest of all Quebecers&8221; LotoQuebec has also adopted a new vision i.e. &8220;to become a recognized world leaderin the responsible commercialization of games of chance.&8221;
LAUNCH OF AN ONLINE GAMING SITE
One of the highlights of the year was without a doubt last December&8217;s launch of espacejeux.com that enables adult Quebecers to legally play various online games of chance. Thanks to the site LotoQuebec channels itsgaming offer in an environment of irreproachable integrity. Given the state of the online gaming market the expectationsof new generations of consumers and the uncontrolled parallel offerings it became imperative for LotoQuebec to engage insuch a project.
At the end of the first four months of operation results are in keeping with estimates 37753 subscribers of which about60% were considered active and revenues of some $7 million. Development of a complete and competitive offering will continueover the coming years.
A YEAR OF FIRSTS FOR LOTTERIES
The past year was marked with impressive achievements in the lottery sector. Lotto Max took the lead as the featured productwith over 20% of total sales. Creativity in the sector was present not only in the range of products offered but also inits business approach. In this regard two innovative projects Loto Express and Formule groupe were born.
Loto Express consists in installing portable sales terminals specially designed for multiplecashregister environments suchas those found in grocery stores and drug stores. In addition to helping declutter service counters the terminals improvecustomer service by providing Quick Picks for favourite lotteries.
Formule groupe on the other hand is an innovative way to buy lottery products as a group. A special feature of this productis that each member of the group receives his own ticket that he may validate and cash at his own convenience.
Never before have Quebecers won so many milliondollar+ prizes than in 20102011. In fact they won 62 such prizes doublethat of the preceding year. Last summer a resident of Monteregie became LotoQuebec&8217;s alltime biggest winner having won$37.6 million at Lotto Max. In addition in early 2011 a group of Lotomatique subscribers (10 Montrealarea residents) shared a $20.7 million prize a record for this 35yearold program.
BOLD MOVES IN CASINOS
Already well underway modernization work at Casino de Montreal will soon begin on the reconfiguration of restaurant installationsand the construction of a new main entrance. While the work is being carried out our clientele is not left wanting as evidencedby the promotion La course au million which will end next October with a gala presented at Place des Arts to crown a millionaire from amongst the finalists.
Casino de Charlevoix has distinguished itself with an innovative multimedia system designed by Moment Factory a Quebecbased company. This spectacularsystem highlights jackpots won by clients and presents interactive promotions.
Casino du LacLeamy which is celebrating its 15th anniversary has implemented a composting program in partnership with the City of Gatineau.This avantgarde program enables us to recover organic materials and reduce waste sent to landfills. By the way the HiltonLacLeamy has been selected by the readers of Conde Nast Traveller as one of the world&8217;s 100 best hotels.
As for the latest in our casino family Casino de MontTremblant opened its Altitude seafood and grill restaurant and lounge in September 2010 offering delicious cuisine in a chic environment with a breathtaking view of the mountain.
SOCIAL AND ECONOMIC CONTRIBUTIONS
Once again the Corporation has played a major social and economic role. For example bingo and lottery winners pocketed $935 millioncommissions to lottery video lottery and bingo partners totalled $350 million and purchases from suppliers doing businessin Quebec reached $310 million.
From a social point of view $31.1 million were invested in fighting compulsive gambling; contributions to nonprofit organizationsreached $17.7 million while the Fonds d&8217;aide à l&8217;action communautaire autonome and the Fonds d&8217;aide à l&8217;action humanitaireinternationale received $14.8 million and $3 million respectively. Spending on sponsorships in support of 136 events was$13.9 million. A contribution of $10 million was made to the Orchestre symphonique de Montreal through the Ministere de laCulture des Communications et de la Condition feminine.
TAKING FAIR ACTION
On March 23 2010 a ruling by the Superior Court ratified the settlement reached as part of a class action suit related tovideo lottery terminals in which it was recognized that video lottery terminals are not the cause of compulsive gamblingthereby confirming LotoQuebec&8217;s position. At the conclusion of the ruling the government took action to ensure fairnessand agreed to reimburse compulsive gamblers for documented therapy services received from 1994 to 2002 regardless of thegames played. Mise sur toi was designated as claim coordinator while LotoQuebec will make the payments.
By March 31 2011 a total of $391000 was paid in therapy expense compensation. The Corporation does not expect to make additionalexpenditures before the end of the claim period i.e. October 31 2011.
MAINTAINING A PRESENCE IN SOCIAL MEDIA
This year LotoQuebec began communicating with the community via social media. Whether on Facebook Twitter or YouTube communications on various 2.0 platforms provide an opportunity to learn what peoplethink of the Corporation in addition to giving them free access to a host of information on LotoQuebec its activities andproducts.
TEAMWORK
In concluding his message the President thanked the staff at LotoQuebec and its subsidiaries for their daily contributionto the Corporation&8217;s success. Mr. Cousineau also expressed his appreciation to the members of the Board for their considerablecontribution to reaching corporate targets.
The 20102011 annual report is available on LotoQuebec&8217;s web site.
KEY NUMBERS FOR FISCAL YEAR
(in $000)
2011 | 2010 | Variation | |
Total revenues | 3674862 | 3755078 | (2.1%) |
Lotteries | 1787813 | 1795334 | (0.4%) |
Casinos | 890998 | 935307 | (4.7%) |
Video lotteries | 1001092 | 1043332 | (4%) |
Bingos | 31334 | 32025 | (2.2%) |
Net earnings | 1337941 | 1340687 | (0.2%) |
Dividends | 1246813 | 1251597 | (0.4%) |