Atlantic Lottery Corp profit falls due to lagging digital product


atlantic-lottery-corporation-digital-product-scrimshawThe lottery monopoly in Canada’s four Atlantic provinces reported a small profit decline in its most recent fiscal year, in part due to its digital offering being “not yet fully product competitive.”

The Atlantic Lottery Corporation (ALC) announced on Monday that its profit for fiscal 2016-17 hit C$422m (US $343.3m), exceeding its target by C$6.5m and marking the fourth year that the annual sum had surpassed the C$400m mark.

However, this year’s profit was down nearly C$10m from the previous year, as ALC’s overall revenue fell 3% to C$1.15b. Lottery ticket sales were down 4.6% to C$699m and video lottery receipts slipped 1% to C$434m. Only entertainment center revenue was in positive territory, rising 4% to C$19.2m.

The revenue declines were partially offset by keeping a tighter rein on direct costs and operating expenses, which fell 3.2% and 4.5%, respectively.

Three provinces – New Brunswick, Nova Scotia and Prince Edward Island – exceeded their profit targets, while Newfoundland & Labrador not only failed to meet its 2017 budget target, it brought in nearly C$10m less than it did in fiscal 2015-16.

ALC CEO Brent Scrimshaw blamed the falling sales on “slowing economies, increased competition and the accelerating shift to digital – a channel in which we are not yet fully product competitive.” Regardless, Scrimshaw (pictured) chose to focus on the positive, noting that ALC was “returning C$60m more per year that we were just five years ago.”

ALC temporarily suspended operations over the weekend in order to update its lottery systems, including the digital platform, which currently offers sales of traditional draw tickets, as well as instant win and iBingo games, plus parlay sports betting. The ALC has promised that new online and mobile games are on the way later this year but has so far been cagey about specifics.

For years now, Scrimshaw has been pushing for the ALC to join Canada’s other provinces – British Columbia, Quebec, Ontario and Manitoba – that offer a fully developed online gambling product. On Monday, Scrimshaw told Huddle Today that the enhanced digital offering would allow “compete with what’s coming out from those companies that have the globe as their marketplace.”

Scrimshaw told the CBC that the ALC’s players were “looking for products that are skill-based, entertaining and interactive,” and failure to “stay with the times” would hurt the ALC’s ability to appeal to younger adults.

In other local news, Prince Edward Island’s government is warning residents about bogus lottery emails being sent from hacked government servers. The emails, which inform recipients that they might have won a Powerball lottery jackpot, were reportedly sent to over 94k email addresses. The government has taken its email system offline to investigate and is warning recipients not to click on any links in these emails.