Geosweep loss a drag on Atlantic Lottery profits for investors

Profits from the Atlantic Lottery Corporation (ALC) were up forsome provinces and down forothers last year, largely based on whether they invested in the failed game Geosweep, new figures show.

In its annual report releasedFriday, ALC said overall profits in the region were virtually unchanged in the fiscal year ended on March 31, 2015, at $368.2 million.

However, that disguised the fact profits earned by Nova Scotia and Newfoundlandand Labrador were up by $8.7 million, whilethose to New Brunswick and P.E.I. fell by $8.9 million

The lossesin those two provinces were almost exclusively caused by their joint $8.7-million investment in the company behind the failed game Geosweep being written off by ALC management earlier this year.

Nova Scotia and Newfoundland and Labrador had both declined an ALC invitation to invest in the scheme.

"This last year was a very solid year in terms of the results for Atlantic Lottery," said ALC president Brent Scrimshaw in a prerecorded message sent out to media outletsFridaymorning that did not directly mention the Geosweep problem.

"Despite a number of unique challenges, we met our plan fully."

Sales to minors not mentioned

Also not mentioned in the annual report was a significant deterioration in ALC attempts to keep lottery tickets out of the hands of minors last year.

The number of lottery retailers in New Brunswick found willing to sell to minors has tripled over the last four yearsa problem that has proven difficult to fix.

New figures show 31 per centof New Brunswick retailers flunked sting operations over the last year where underage shoppers are sent in to try and buy lottery tickets.

That's the worst rate in the region and more than triple the nine per centwho failed the same test four years ago.

The latest numbers, which used to be included in the annual report but are now published separately, show282 retailers in New Brunswick were approached by a minor to buy a lottery ticket and 88 made the sale.

"Recognizing that our compliance rates were not on par with our expectations, we implemented an extensive communications and education program," the ALC said in its latest update on the problem.

"Despite this focused effort on retailer awareness and training, 19+ compliance levels are not at an acceptable level."

ALC says it has tried everything from education to financial rewards for retailers who pass the test to encourage compliance, but has seen results worsen every year instead.This year,it is trying financial penalties to fix the problem, it said.

Another issue no longer addressed in the annual report jackpots won by retailers and their employees showed a reduction from the record numbers posted two years ago.

ALC says 18 prizes of more than $10,000 were claimed by retailers, 3.7 per cent of all big wins.That's significantly lower than the six per cent win rate retailers posted two years ago, but it's still much luckier than retailers seem to be with smaller prizes.

ALC says when prize amounts were between $1,000 and $9,999 retailers won just 2.7 per centof the time. Retailers winning more often as prizes get bigger is a pattern that has persisted for several years.