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Gaming NewsLoto-Québec's net earnings remain stable despite lower revenues13 June 2011MONTREAL, Quebec -- (PRESS RELEASE) -- Minister of Finance, Raymond Bachand, submitted to the National Assembly Loto-Québec's annual report for the financial year beginning April 1, 2010 and ending March 31, 2011. The Corporation reported consolidated revenues of $3.675 billion and net earnings of $1.338 billion for the period. Thanks to strict expense control, Loto-Québec was able to show net earnings similar to last year's figures, despite an $80 million decline in sales. In so doing, the Corporation exceeded the expense reduction and increased productivity goals that had been set by the government as part of its law to return to a balanced budget. In this regard, Loto-Québec achieved reductions of $14.9 million against a target of $5 million in 2010-2011. From a business point of view, concerned sectors performed satisfactorily given the difficult environment. Thanks to Lotto Max's success, lotteries brought in sales that were virtually identical to those of the previous year. Despite a significant decline in the North American casino industry, the four casinos experienced only a small drop in revenues. At Casino de Montréal, major logistical challenges were met and staff continued to welcome clients while renovations valued at $306 million were being carried out. Video lottery revenues decreased by 4.0% due to the economic slowdown and reduced network size. Lastly, bingo activities weakened by 2.2% despite the introduction of Kinzo, a collective gaming concept that supports non-profit organizations whose source of financing was lost when bingo halls closed. ADOPTION OF THE 2010-2013 STRATEGIC PLAN The product of collective reflection, Loto-Québec's 2010-2013 strategic plan was ratified last fall by the Government's Cabinet. An in-depth review of the Corporation's mission resulted in the identification of 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 environment, to effectively oversee consumption and to improve the overall efficiency and performance of the Corporation. These directions have led to an update of Loto-Québec's mission, which is now "to responsibly manage games of chance in a controlled and measured fashion, in the interest of all Quebecers." Loto-Québec has also adopted a new vision, i.e. "to become a recognized world leader in the responsible commercialization of games of chance." LAUNCH OF AN ONLINE GAMING SITE One of the highlights of the year was without a doubt last December's launch of espacejeux.com that enables adult Quebecers to legally play various online games of chance. Thanks to the site, Loto-Québec channels its gaming offer in an environment of irreproachable integrity. Given the state of the online gaming market, the expectations of new generations of consumers and the uncontrolled parallel offerings, it became imperative for Loto-Québec to engage in such a project. At the end of the first four months of operation, results are in keeping with estimates: 37,753 subscribers, of which about 60% were considered active, and revenues of some $7 million. Development of a complete and competitive offering will continue over 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 product with over 20% of total sales. Creativity in the sector was present not only in the range of products offered, but also in its 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 multiple-cash-register environments such as those found in grocery stores and drug stores. In addition to helping declutter service counters, the terminals improve customer 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 product is 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 million-dollar+ prizes than in 2010-2011. In fact, they won 62 such prizes, double that of the preceding year. Last summer, a resident of Montérégie became Loto-Québec's all-time biggest winner, having won $37.6 million at Lotto Max. In addition, in early 2011, a group of Lotomatique subscribers (10 Montréal-area residents) shared a $20.7 million prize, a record for this 35-year-old program. BOLD MOVES IN CASINOS Already well underway, modernization work at Casino de Montréal will soon begin on the reconfiguration of restaurant installations and the construction of a new main entrance. While the work is being carried out, our clientele is not left wanting as evidenced by 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 Québec-based company. This spectacular system highlights jackpots won by clients and presents interactive promotions. Casino du Lac-Leamy, which is celebrating its 15th anniversary, has implemented a composting program in partnership with the City of Gatineau. This avant-garde program enables us to recover organic materials and reduce waste sent to landfills. By the way, the Hilton Lac-Leamy has been selected by the readers of Condé Nast Traveller as one of the world's 100 best hotels. As for the latest in our casino family, Casino de Mont-Tremblant 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 million, commissions to lottery, video lottery and bingo partners totalled $350 million and purchases from suppliers doing business in Québec reached $310 million. From a social point of view, $31.1 million were invested in fighting compulsive gambling; contributions to non-profit organizations reached $17.7 million while the Fonds d'aide à l'action communautaire autonome and the Fonds d'aide à l'action humanitaire internationale 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 Montréal through the Ministère de la Culture, des Communications et de la Condition féminine. 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 to video lottery terminals in which it was recognized that video lottery terminals are not the cause of compulsive gambling, thereby confirming Loto-Québec's position. At the conclusion of the ruling, the government took action to ensure fairness and agreed to reimburse compulsive gamblers for documented therapy services received from 1994 to 2002, regardless of the games played. Mise sur toi was designated as claim coordinator while Loto-Québec will make the payments. By March 31, 2011, a total of $391,000 was paid in therapy expense compensation. The Corporation does not expect to make additional expenditures before the end of the claim period, i.e. October 31, 2011. MAINTAINING A PRESENCE IN SOCIAL MEDIA This year, Loto-Québec 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 people think of the Corporation, in addition to giving them free access to a host of information on Loto-Québec, its activities and products. TEAMWORK In concluding his message, the President thanked the staff at Loto-Québec and its subsidiaries for their daily contribution to the Corporation's success. Mr. Cousineau also expressed his appreciation to the members of the Board for their considerable contribution to reaching corporate targets. The 2010-2011 annual report is available on Loto-Québec's web site.
Loto-Québec's net earnings remain stable despite lower revenues
is republished from Online.CasinoCity.com.
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