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Loto-Québec posts annual revenue decline despite strong online growth

17th June 2014 8:36 am GMT

Canadian provincial lottery operator Loto-Québec has reported a 3 per cent increase in revenue to CAD$3.5bn for the year ended March 31st, with the company’s online gaming products generating a total of $41.9m during the period.

Revenue fell across all of the operator’s business segments, with Loto-Québec’s core lottery business posting a marginal 1 per cent decline to $1.8bn.

Full Year 2013/14 Revenue

Canadian Dollars (CAD$) FY 2012/13FY 2013/14
    
Lotteries 1,792.8m1,773.6m
Casinos 848.0m797.0m
Video Lotteries 972.8m940.7m
Bingo 36.9m36.9m
Inter-sector Transactions (32.9m)(29.1m)
TOTAL 3,617.7m3,519.1m

Revenue from draw games were down 3 per cent to $1.2bn, despite a 6 per cent increase in Lotto 6/49 revenue, while instant games revenue rose 4 per cent to $468.1m.

Online lottery sales more than doubled to $16.0m, from $7.1m in the previous year, while online casino revenue rose 11 per cent to $25.9m. Overall, the online channel saw revenue increase by 37 per cent compared to the previous year.

Loto-Québec estimates that it holds a 20 per cent share of the online gaming market, but warned that the illegal gaming market was a growing problem, urging the government to implement new solutions to control the supply of online gaming across the province.

Overall casino revenue fell by 6 per cent to $797.0m following declines across all four of the company’s casinos, with Casino de Mont-Tremblant suffering the biggest drop as revenue fell 17 per cent. Casino de Montreal contributes the most in revenue, $489.9m, followed by Casino du Lac-Leamy with $242.7m.

Video lottery revenue was down 3 per cent to $940.7m, while bingo revenue fell marginally by 0.1 per cent to $36.9m.

Cost of sales amounted to $1.4bn, while expenses rose 3 per cent to $996.3m. As a result, operating profit fell 10 per cent to $1.2bn, with net profit for the year dropping 10 per cent to $1.1bn.

“Given the current economic climate (mature market, fierce competition, the challenge of attracting a new customer base), one thing stands out: Loto-Québec will need to be more efficient than ever,” said the company in a statement. “Particular focus will be placed on that aspect in the course of 2014-2017 strategic plan development. The effort will also involve a review of how things get done and priority setting in order to control expenses even more tightly.”

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