Summary
of
Balance Sheets
The following table presents the Lottery's assets, liabilities, and net assets (shown in millions
of
dollars):
2010
2009
2008
Current and other assets $
18.0
$
15.8 $
17.1
Capital assets
8.3
0.5
0.4
Total assets $
26.3
$
16.3
$
17.5
Current Liabilities
$
12.4 $
13.2 $
13.3
Net
assets

Invested in capital assets
8.3
0.5 0.4
Unrestricted 5.6
2.6
3.8
Total net assets
13.9
3.1
4.2
Total Liability and Net Assets
$
26.3
$
16.3
$
17.5
Current and other assets consist primarily
of
cash balances for operations, expanded lottery
and prizes, accounts receivable from Lottery retailers for lottery tickets sales activity, and
instant ticket inventory. During fiscal year
2010, current and other assets increased $2.2
million due to increases in cash balances of$1.5 million
of
which $0.7 million is attributable
to the Expanded Lottery and an increase in accounts receivable
of
$0.7 million over the prior
year.

For fiscal year
2009, current and other assets decreased $1.3 million as cash balances
decreased
$0.7 million and the MUSL operating reserve receivable decreased $0.7 million
from the prior year.
Capital assets increased $7.8 million from
2009 as a result
of
recording contributed capital
assets related to Expanded Lottery activities
of
$9.1 million less $1.2 million in current year
depreciation. Additional detailed information on capital assets may
be
found in notes 1 and 3
to the notes to financial statements.
Current liabilities consist
of
accounts payable and accrued liabilities, transfers due to the
State
of
Kansas, and prize liabilities. The decrease in current liabilities from 2009 is
attributable to a decrease in amounts due to the
State
of
Kansas
of
$1.2 million which offset
increases in accounts payable and accrued liabilities from
2009.

For fiscal year 2009, current liabilities decreased $0.1 million from 2008 as accounts payable
and accrued liabilities and amounts due to the
State
of
Kansas decreased $1.0 million which
offset the increase in prize liabilities of$0.8 million.
2
This is trial version
www.adultpdf.com
Summary
of
Revenue, Expenses, and Changes in Net Assets
The following table presents the Lottery's changes
in
net assets (shown in millions
of
dollars):
Q>erating revenues:
Net lottery game revenues
Expanded lottery revenues
Reimburserrents and other
Total operating revenues
Operating expenses:
Lottery
Expanded lottery
Total operating expenses
Operating income
Nonoperating revenues (expenses):
Lottery
Expanded lottery

Total nonoperating revenues (expenses)
Income (loss) before contributions
Capital
contributions
Change in net assets
Net
assets, beginning
of
)ear
Net
assets, end
of
year
$
$
235.4
20.7
2.4
258.5
166.0
17.9
183.9
74.6
(67.9)
(5.0)
(72.9)
1.7
9.1
10.8
3.1

13.9
$
$
230.5
1.6
232.1
165.0
165.0
67.1
(68.2)
(68.2)
(1.1)
(1.1)
4.2
3.1
$
$
236.7
1.6
238.3
171.2
171.2
67.1
(70.0)
(70.0)
(2.9)
(2.9)
7.1
4.2
The change in net assets between fiscal year

2010 and fiscal year 2009 represented an
increase
of$10.8
million. The increase is the result
of
the increase in sales revenues in excess
of
corresponding increases
in
operating expenses, as well as capital assets contributions
related to Expanded Lottery activities.
The change in net assets between fiscal year
2009 and fiscal year 2008 was a decrease
of
$1.1 million. The decrease is the result
of
the overall decrease
in
sales revenues during the
fiscal year.
3
This is trial version
www.adultpdf.com
Lottery Game Revenues
Presented in millions
of
dollars, the following table compares online and instant Lottery sales
by
game type between fiscal years 2010 and 2009:
Type

of
Game
2010
2009
Difference
Percentage
Instant $
114.5 $
115.7 $
(1.2)
-l.()O!o
Pull-Tabs
9.6
8.8
0.8
9.1%
Powerball
41.0
40.0
1.0
2.5%
Megt Mllions 3.9
3.9
2by2
1.7
1.7
0.0%
Super Kansas Cash 14.8
14.8
0.0%

Keno
26.6
28.4
(1.8)
-6.3%
Pick 3 6.1
6.0
0.1
1.7%
Holiday Raffle
3.0
3.0
Hot
Lotto
10.7
10.7
0.0%
Kansas Hold'Em
3.5
4.4
(0.9)
-20.5%
Total
$ 235.4 $
230.5 $
4.9
2.1%
Revenues from the sale
of
online and instant lottery tickets for the fiscal year ended June 30,

2010
increased 2.1 %
or
$4.9 million compared to the previous year. Fiscal year 2010 sales
were $235.4 million compared to $230.5 million in fiscal year
2009. Two new online games
were added during fiscal year
2010 including the Mega Millions (a
MUSL
game) with $3.9
million in sales, and the Holiday Raffle game as a sell-out
of
$3.0 million. Powerball had
increased sales
of
$1.0 million while Super Kansas Cash, Pick 3, and 2
by
2 had minor
increases. Instant sales decreased $1.2 million from
2009. Increases in overall sales were
accomplished
by
providing
new
games to the public as well as entering into partnerships with
Bass Pro Shops, Cabela's, Buick LaCross, Kansas Speedway, Kansas State Fair, the 3i Show
and other businesses,
in
special games promotions. Pulltab sales had
an

increase
of
$0.8
million. A third series
of
the Mid-West Millions with the State
of
Iowa was successfully
completed. Increases
in
these games were offset
by
decreases
in
Keno
of
$1.8 million and
Kansas Hold
'Em
of$0.9
million, respectively.
4
This is trial version
www.adultpdf.com
Presented in millions
of
dollars, the following table compares online and instant Lottery sales
by
game type between fiscal years 2009 and 2008:
Type

of
Garre
2009
2008
Difference
Percentage
Instant $
115.7 $
115.1
$
0.6
0.5%
Pull-Tabs
8.8
7.6
1.2
15.8%
Powerball
40.0
43.0
(3.0)
-7.0%
2by2
1.7
1.7
O'()o1o
Super Kansas Cash
14.8
17.4
(2.6)

-14.9%
Keno
28.4
31.3
(2.9)
-9.3%
Pick 3
6.0
5.8
0.2
3.4%
eScratch
1.0
(1.0) -100.0%
Hot
Lotto
10.7
9.2
1.5
16.3%
Kansas
Hold'Em 4.4 4.6
(0.2}
-4.3%
Total
$
230.5 $
236.7
$
(6.2) -2.6%

Revenues from the sale
of
online and instant lottery tickets for the fiscal year ended June 30,
2009
decreased 2.6% or $6.2 million compared to the previous year. Fiscal year 2009 sales
were
$230.5 million compared to $236.7 million in fiscal year 2008. Powerba1l, Super
Kansas Cash, and Keno experienced decreases in sales during the fiscal year
of
$3.0 million,
$2.6 million, and $2.9 million, respectively. Several games experienced increased sales
including the instant scratch game whose sales increased
$0.6 million compared to fiscal year
2008. The Lottery is continuing to provide new games to the public and continued to benefit
from its partnerships with Kansas Speedway, 3i Show, Wichita River Festival, Kansas State
Fair, and other businesses, in special games promotions. Pull-tabs and Hot Lotto experienced
increased sales compared to fiscal year
2008
of
$1.2 million and $1.5 million, respectively.
The second series
of
the multi-state instant scratch game with the State
of
Iowa called Mid-
West Millions was completed. Each state received the same number
of
tickets for sale, and
with two drawings being held, one in each state for a top prize
of

$500,000 at each drawing.
The eScratch game was discontinued January
1,
2008, with the partial year sales
of
$1.0
million.
5
This is trial version
www.adultpdf.com
Major Lottery Expenses
The following table compares the lottery game-related expenses between fiscal year 2010
and fiscal year 2009. The expenses are shown in millions
of
dollars:
Description
2010
2009
Difference Percentage
Game
Prizes
$ 132.6 $
130.9
$
1.7
1.3%
Retailer Commissions
13.7
13.5
0.2 1.5%

On-line Games Service Bureau
5.6
5.3
0.3 5.7%
Instant Ticket Printing Costs 3.8
4.8
__
( > 1_.0J-)
-20.8%
Total $ 155.7
$ 154.5
$
1.2
0.8%
The overall increase in game prizes was the result
of
the increase in sales compared to those
in fiscal year
2009. The online games service bureau costs increased as a result
of
more on-
line sales. Instant ticket printing costs for fiscal year
2010 decreased due to the relative cost
per ticket being less for the games issued during the year.
Of
the $10.3 million
of
fiscal year 2010 lottery operating expenses that were not game-
related, $4.4 million, was for employees' salaries and wages, $2.9 million was spent for
games and promotional advertising, and other administrative expenses accounted for

$3.0
million. In fiscal year 2009, these same expenses totaled $10.5 million including $4.2 million
for employees' salaries and wages, $3.3 million for games and promotional advertising, and
$3.0 million for other administrative expenses.
The following table compares the lottery game-related expenses between fiscal year
2009
and fiscal year 2008. The expenses are shown in millions
of
dollars:
Description
2009
2008
Difference Percentage
Game Prizes
$130.9 $133.0
(2.1)
-1.6%
Retailer Commissions
13.5 13.8
(0.3)
-2.2%
On-line Games Service Bureau
5.3
5.6
(0.3) -5.4%
Telecommunications Terminal Costs
0.0 2.0 (2.0) -100.0%
Instant Ticket Printing Costs
4.8 4.5
0.3 6.7%

Total
$154.5 $158.9
(4.4)
-2.8%
6
This is trial version
www.adultpdf.com
The overall decrease in Game Prizes was the result
of
the decrease in sales compared to fiscal
year
2008. The Telecommunications Terminal Costs are no longer a separate charge in fiscal
year
2009. The On-line Games Service Bureau costs decreased as a result
of
fewer on-line
sales. Instant Ticket Printing Costs for fiscal year
2009 increased as instant ticket sales
increased by .5%, and the strategy
of
ordering smaller quantities
of
each game was
successfuL
Of
the $10.5 million
of
fiscal year 2009 lottery operating expenses that were not game-
related, $4.2 million was for employees' salaries and wages, $3.3 million was spent for
games and promotional advertising, and other administrative expenses accounted for $3.0

million. In fiscal year
2008, these same expenses totaled $12.3 million including $5.6 million
for employees' salaries and wages, $3.1 million for games and promotional advertising, and
$3.6 million for other administrative expenses.
Kansas Lottery
Graphs
of
Financial Highlights
For the Fiscal Year Ended June 30,
2010
Percent of
Sales
Commissions
5.8%
Prizes
56.3%
To
depict compliance with the 45% prize payment statute and the retailers' commissions
rules.
7
This is trial version
www.adultpdf.com
Expenses as a Percent of Lottery Revenues
Cost
of
Sales
66.1%
5.1
%
Transfers

to
SGRF
28.8%
The Cost
of
Sales category includes prizes, commissions, service bureau, auto-ship, and
instant ticket printing.
Transfers to the State Gaming Revenues Fund (SGRF) and State General Fund (SGF)
Pursuant to the Lottery Act, the Director
of
Accounts and Reports
of
the State
of
Kansas
shall transfer monies in the Lottery Operating Fund to the State Gaming Revenue Fund
(SGRF), at least monthly, in an amount equal to the monies in such fund in excess
of
those
needed for payment
of
Lottery expenses, payment
of
compensation to retailers and transfers
to
the Prize Payment Fund as certified by the Executive Director
of
the Lottery. Although all
Lottery transfers are made to the SGRF, there is a
$50.0 million cap. Therefore, any transfers

in
excess
of
$50.0 million are subsequently transferred to the State General Fund (SGF).
Of
the $50.0 million in the SGRF, the first $80,000 is transferred to the Problem Gambling
Grant Fund (pGGF). Then,
of
the balance remaining, 85% is transferred to the Economic
Development Initiatives Fund (EDIF), 10% to the Correctional Institutions Building Fund
(CmF), and 5% to the Juvenile Detention Facilities Fund (JDFF).
For fiscal year
2010 legislature again waived the percentage
of
sales SGRF requirement for a
minimum transfer
of
$72.0 million originally with a minimum monthly transfer
of
$4.5
million. For
2010, transfers to the SGRF were $67.8 million, an increase
of
$0.5 million
over
2009. The fiscal year 2009 transfer
of
$67.3 million was $2.7 million less than the fiscal
year
2008 transfers.

8
This is trial version
www.adultpdf.com
Expanded Lottery
The 2007 Legislature passed Senate Bill 66, the Expanded Lottery Act. The Act provides for
the Kansas Lottery to
own
and operate electronic gaming machines at Kansas horse and dog
racetracks,
if
the facilities are established upon the County's voter approvaL Currently there
are no active horse and dog racetracks
in
the State. The Expanded Lottery Act also allows for
the Lottery, upon county voter approval, to operate lottery gaming facilities in four specific
gaming zones. The Expanded Lottery Act establishes the distribution requirements
of
net
gaming revenues.
Expanded Lottery Revenues and Expenses
The Boot Hill Casino and Resort represents the State's first casino which opened Mid-
December 2009. The net revenue and related expenses are as follows (shown in millions
of
dollars):
Net Revenue
Expenses:
State
of
Kansas
Problem Gaming

Zone City and County
Management Fees
$
$
$
2010
20.7
4.6
0.4
0.6
15.1
20.7
Expanded
Lottery
Distributions
Management
Fees
73%
State
of
Kansas
22%
Problem
Gambling
2%
Zone
City/County
3%
To depict the distribution
of

net revenue as set forth
in
the 2007 Legislature enacting the
Expanded Lottery Act.
9
This is trial version
www.adultpdf.com
Contacting the Lottery's Financial Management
This management's discussion and analysis report is designed to provide Kansas citizens,
Kansas government officials, players, retailers and other interested parties with a general
overview
of
the Lottery's financial activity for the fiscal years ended June 30, 2010 and 2009
and
to
demonstrate the Lottery's accountability for the monies it received from its lottery
ticket sales activity. Questions or comments about this report may be addressed to Carolyn
Brock, Director
of
Finance or Wayne Regnier, Fiscal Manager at 128
N.
Kansas Avenue,
Topeka,
KS
66603.
10
This is trial version
www.adultpdf.com
KANSAS LOTTERY
(A

COMPONENT UNIT OF THE STATE OF KANSAS)
BALANCE SHEETS
JUNE 30, 2010 and 2009
2010
ASSETS
Current Assets:
Cash:
Operating fund
$ 5,533,496
Prize payment fund
895,529
Accounts
receivable, net
of
allowance for
doubtful accounts
of
$618,583 and $480,163
at
2010 and 2009, respectively
3,507,672
Accounts
receivable - unbilled
5,897,136
Other receivable
153,378
Instant ticket game inventory
2,014,378
Total current assets 18,001,589
Capital

assets, net
of
depreciati9n:
Property and equipment - Lottery 442,494
Property and equipment - Expanded Lottery
7,889,090
Total capital
assets
8,331,584
Total assets
$ 26,333,173
LIABILITIES AND NET ASSETS
Current liabilities:
Accounts payable and accrued liabilities
$ 2,481,796
Due to the
State
of
Kansas
4,567,697
Prize
liability
5,358,996
Total current liabilities
12,408,489
Net assets:
Invested
in
capital assets
8,331,584

Unrestricted
5,593,100
Total net assets
13,924,684
Total liabilities and net assets
$ 26,333,173
See accompanying notes to financial statements.
11
2009
$
3,944,668
991,212
2,912,262
5,748,353
212,576
2,008,267
15,817,338
464,742
464,742
$
16,282,080
$ 1,606,719
5,750,000
5,794,238
13,150,957
464,742
2,666,381
3,131,123
$
16,282,080

This is trial version
www.adultpdf.com