- »Loto-Québec Annual Results Show Profit, Revenue Down
Loto-Québec Annual Results Show Profit, Revenue Down
The 2019-2020 fiscal year for Loto-Quebec ended on March 31, 2020. That meant that only the coronavirus pandemic only hit the very last few weeks of the year. The worst of the pandemic impact will show in the beginning of the 2020-2021 financial year, but the accountants can plan for that.
Overall, Loto-Quebec remained in front of its targets for the 2019-2020 year. The numbers, however, were not good. When profits decline $1.35 billion and revenue sinks 3.1%, it requires a closer look.
2019-2020 Report Overview
The way Loto-Quebec reported it, total revenues reached $2.741 billion. And the consolidated net income of $1.353 billion exceeded the budgeted target figure by $58.1 million.
Some of the bottom-line numbers from the page of economic and social contributions, the company wanted to highlight the following:
- Dividend to the Quebec government: $1,328.5 million
- Awards to lottery, bingo, and Kinzo winners: $1,128.9 million
- Employee benefits: $445.8 million
- Commissions to lottery and gaming partners: $337.6 million
- Purchases from companies doing business in Quebec: $419.1 million
- Government taxes: $147.7 million
- Contribution to the Canadian government: $17.6 million
- Prevention of problem gambling: $32.8 million
- Contributions to nonprofit organizations: $17.7 million
- Sponsorships: $9.8 million
Loto-Quebec President and CEO Lynne Roiter noted, “If it weren’t for our establishments and video lottery terminals in bars having to shut down, and sales at lottery retailers having to be suspended, our financial results would have been at the same level as the previous fiscal year. In addition, thanks to our efficient management, we were once again able to reduce our total expenses, which saw a $14.7 million, or 1.6%, decrease.”
The way the actual report noted, however, was a tad different. That annual revenue of $2.741 billion was a 3.1% decrease from the previous year.
Casinos and gambling halls contributed the most revenue to the overall Loto-Quebec numbers. That $963.7 million was up 5% from the previous year, but it would have been more had it not been for the shutdown of those establishments on March 13.
Even so, Loto-Quebec claims a strong performance that delivered a “unique and varied entertainment experience” for customers.
Lotteries contributed nearly as much with $929.4 million, but it was down 2.8% year-on-year. Loto-Quebec mentioned that points of sale closed on March 20 due to pandemic restrictions, but it still hailed the sector’s “excellent results.”
In addition, Loto-Quebec highlighted the largest prize in its history in February 2020, which awarded $70 million.
Third in the revenue contributions list was gaming establishments, which included bingo and Kinzo halls and video lottery terminals (VLTs) in bars. The final $872.6 million number was down 10.9% from the previous year, chalked up primarily to the closures on March 14 and the transfer of gaming halls to the SCQ (Societe des Casinos du Quebec). There was also a decline in revenue in venues that lost VLTs.
If one can exclude those factors, though, Loto-Quebec touted the revenue stream as “stable.”
Online gaming was a solid performer in the 2019-2020 year with revenues of $135.9 million. That revenue came from online lottery games ($39.4 million) and online casino games ($96.4 million). Overall, that sector increased 28.9% with $30.5 million more than the previous year.
Loto-Quebec noted that new instant games and virtual sports were added in the past year, attracting more customers. It is likely that the sudden pandemic-related shutdowns of lotto retailers and gambling establishments also sent people online for the last few weeks of March. It is likely that this growth will be even more significant in the next year.
As a company does in an annual report, Loto-Quebec touted some of its accomplishments in the past year. Those included:
- Renewal of World Lottery Association Level 4 Certification, highest level for responsible gambling
- Agility and innovation in response to pandemic, including prioritizing health of customers and employees
- Donations of $1 million to Moisson du Quebec, and disinfectant and masks to Ministere de la Sante et des Services Sociaux
- Reopening kitchens at Casino de Montreal and Casino du Lac-Leamy to prepare more than 50,000 meals for needy citizens in coordination with La Tablee des Chefs
- Continued sponsorship of events and festivals despite cancellations
- Celebration of Loto-Quebec’s 50th anniversary
Acknowledging Challenges Ahead
Roiter recently spoke of the Covid-related losses expected in the 2020-2021 year. She had no official numbers to provide, but she did estimate that Loto-Quebec may have lost $300 million in the period of late March through June only. That doesn’t consider the long-lasting effects, including the effects of restricted capacity and hours on an ongoing basis.
As an example of the long-term effects of the coronavirus pandemic, Loto-Quebec issued a new notice this week regarding hours of operation. A recent uptick in positive coronavirus cases prompted an order that gaming halls and casino close at midnight and bars close at 11pm.
The financial losses don’t calculate the long-ranging effects of the 2,250 employees laid off in June.