Lottery profits under pressure but BGLC still hits jackpot

Industry regulator Betting, Gaming and Lotteries Commission, BGLC, is smiling all the way to the bank, having taken a bigger haul of revenues, bettering its income from the gaming industry since the onset of the pandemic by just under $300 million.

That 11 per cent gain from industry fees sent BGLC’s quarterly revenue close to $2.3 billion in the March quarter of this year, despite declining earnings across the entire gambling industry, but coinciding with larger net sales by gaming market leader Supreme Ventures Limited, which operates as SVL Group.

It was a mixed bag for the industry and SVL Group, however, which like the wider market, saw its quarterly profit decline – falling by 18 per cent to $602 million.

The BGLC gave highlights of the performance of the industry in a statistical report posted to its website, saying the tabulation was based on data from the bookmakers, horse-racing promoters, lottery companies and gaming lounges it licenses and regulates.

“The lottery sector generated the highest industry sales and is the largest contributor to government revenue, which represents 91 per cent,” the BGLC report noted, while indicating that it reflected a continuation of a pattern from previous years. Betting fees provided five per cent of the agency’s income, or $104.8 million, while gaming accounted for four per cent of the state’s take, or $93.3 million.

Of the government revenue earned from gambling operations, 80 per cent goes to the Consolidated Fund through Tax Administration Jamaica and mandatory payments to the Culture Health Arts Sports and Education Fund, better known as the CHASE Fund; and 20 per cent to gambling industry regulators – the BGLC and Jamaica Racing Commission.

The report is the BGLC’s first since the entrance in February of two lottery companies to the market, ending SVL’s sole reign in that segment of the gaming sector. BGLC said the total sales figure of $16.9 billion for lottery promoters in its report captured all three players – Supreme Ventures Group’s gaming subsidiary, Prime Sports Jamaica Limited, or PSJL; Mahoe Gaming; and Goodwill Gaming.

“The $16.9 billion reported for the quarter represents sales declared by the three lottery promoters to the Government (TAJ and BGLC),” said BGLC Executive Director Vitus Evans. “For the quarter January to March 2021, PSJL declared sales of $16.598 billion,” he said, via email, in response to queries by the Financial Gleaner.

This means that Mahoe Gaming and Goodwill Gaming declared $337 million in sales for approximately eight weeks of operation during the quarter, and contributed about $46.7 million, or two per cent, of the industry revenue that flowed to the Jamaica Government’s coffers.

“The two new lottery promoters operated for eight weeks and so there was no significant impact; contributing two per cent to Government revenue,” Evans said.

SVL’s lottery sales in the January to March quarter in 2020 was $12.86 billion, according to BGLC statistics.

SVL Group itself reported that its lottery ticket sales rose 31.3 per cent “to close at $16.9 billion” for the March 2021 quarter. However, amid the new competition and discounting for prizes, net lottery sales declined from $4.99 billion to $4.62 billion in the period.

The current BGLC report said industry-wide lottery prize money rose to $12.6 billion in the first three months of 2021, from just about $8.4 billion in the same period of 2020. For the period, the lottery companies declared gross profit of $4.3 billion, which, despite the addition of two new companies, was less than the $4.4 billion reported for the quarter by SVL alone a year earlier.

All told, industry-wide figures supplied by the BGLC remained relatively flat in the quarter, with close to $100 million shaved off overall gambling sales revenue to $41.2 billion, compared to the $41.3 billion earned in the year-prior period.

Declared gross profit across the gambling industry also inched down $100 million to $6.1 billion from $6.2 billion in the comparative quarter last year. Payout was the same at $35 billion across the industry.

Bookmakers, however, reported better business. That market segment, in which SVL Group also has substantial holdings, did $313.7 million in business on local horse racing, up from $209.1 million; $178 million on simulcast racing, up from $149 million; and $1.8 billion in sports betting, up from $1 billion.

Racing promoter Supreme Ventures Racing and Entertainment Limited, another SVL Group subsidiary, also reported improved sales for local horse racing at $1.2 billion, up from $797 million; and simulcasts at $891 million, up from $751 million.

Gaming lounges and non-gaming lounges both saw a fall-off in business, from $23.6 billion to $18.8 billion, and from $1.8 billion to $881 million, respectively.

huntley.medley@gleanerjm.com