Browse articles by topic

ALC 2019-29 revenue down 5.1% as Covid-19 impacts sales

News

Canadian lottery operator Atlantic Lottery reported revenue of CAD$725.5m (USD$523.3m), down 5.1%, for the fiscal year ended 31 March, as lower jackpots and the impact of the novel coronavirus (Covid-19) contributed to a decline in revenue and profit.

ALC’s revenue was 5.7% below target for the year, and came on total sales of $1.18bn. 

Nova Scotia took over the top spot as the leading province in terms of revenue, despite its contribution declining by 4.6% to $228.8m. This was because revenue from Newfoundland and Labrador declined more sharply, by 8.3% to $227.4m.

Revenue from New Brunswick also declined, by 3.5% to $213.3m, while revenue from Prince Edward Island dipped slightly to $55.9m.

Turning to revenue by product, $402.0m came through video lottery terminals, down 5.5%. However, ALC noted that revenue was up slightly year-on-year until March, when Covid-19 led to a $20m drop in revenue.

New Brunswick produced the most video lottery revenue at $132.5m, 3.0% below 2019’s level, while the machines in Nova Scotia brought in $123.4m, down 4.9%.

A further $120.6m, 6.8% less than the prior year, in video lottery revenue came from Newfoundland and Labrador and Prince Edward Island saw video lottery revenue grow 1.4% to $21.0m.

Draw-based games contributed $164m, an 8% year-on-year decline due in part to the unusually high number of large “Maxmillions” jackpots (when a $50m jackpot is not won) in 2018-19. Lotto Max remained the most popular game, with revenue holding steady at $65.0m thanks to an increase in draws balancing out the fact that half of draws in 2018-19 were Maxmillions draws.

Lotto 6/49 followed but revenue fell by 17% to $39m due in part to the increase in Lotto Max draws. Tag saw revenue dip by 4% to $25m while Atlantic 49 revenue was down 13% to $11m.

Instant win games, meanwhile, brought in revenue of $115.8m. The Scrathch’N Win brand made up the majority of this at $78.0m, down 2.5%, while the Breakopen brand brought in $37.8m, a 13.7% decrease.

The transition from a barcoded to a non-barcode product contributing to the decline, which has led ALC to reintroduce the barcoded product next month

iGaming revenue came to $12.6m. Of this total, $10.6m came from digital instant win games, up 107.8%, while $2.0m came from online bingo, down 23.1%.

Sports betting revenue totaled $13m, down 7%, but online betting revenue grew by 42%  to $3.4m as the share of sports betting revenue that came from online betting grew from 19% to 26%.

Atlantic Lotteries paid direct expenses, such as commissions to retailers, of $144.7m, down 1.2% year-on-year. This resulted in a gross profit of $591.0m, down 4.9%.

Atlantic Lotteries its other expenses then totalled $195.6m down 2.0%. Most of these costs were operating and administrative expenses, which came to $108.8m, down 1.3%. A further $33.7m were capital-related costs, a 1.0% decline, and $53.1m were other expenses, down 3.8%.

This resulted in net profit of $395.4m down 5.7%. All of this total was returned to the region’s provincial governments.

Nova Scotia saw the highest net profit and therefore the highest amount returned, though this was down 5.4% at $131.1m. In New Brunswick, $124.5m was returned to the government, down 4.2%, while in Newfoundland and Labrador, net profit declined by 11.6% to $121.1m. 

Prince Edward Island was the only province to see its net profit increase, by 2.3% to $18.7m.

However, Newfoundland and Labrador still saw the highest amount distributed per capita at $281, to New Brunswick’s $199, Nova Scotia’s $167 and Prince Edward Island’s $153.

ALC chief executive Chris Keevil said the lottery would take further efforts to focus more on its digital offering following the disruption caused by Covid-19 to its land-based operations.

“We are undergoing corporate change that emphasizes two key areas: increased digitalization and a greater focus on our players,” Keevil explained. “The opportunity to grow in the digital space is enormous – especially as we further compete in order to keep Atlantic Canadians’ dollars right here in our region. 

“Our physical retail presence is and will always remain a vital part of our business, but we want it to be even more integrated with the digital lottery experience.”

Keevil took up the role of chief executive on 1 May, replacing Brent Scrimshaw, who announced that he was to step down from the role in September last year. Keevil was previously chief executive of creative agency Colour.