Lottery revenues up, but P.E.I. government's share goes down

The Atlantic Lottery Corporation's revenues increased on P.E.I. for the fiscal year that ended March 31, 2016, but gambling revenues for the province dropped.

ALC posted record revenues in 2015-16, including an eight per cent increase in gambling revenues at Red Shores Raceway facilities in Charlottetown and Summerside.

• Atlantic Lotto records record profits in 2015-16
• Atlantic Lottery profits given up by P.E.I. to pay off $4.3M GeoSweep debt

But those increases were more than offset for the provincial governmentas ALC deducted $4.3 M from its disbursement to P.E.I. to pay for its failed investment in Geonomics, the company behind the online lottery game GeoSweep.

Atlantic Lotto deducted a further $1.9 M from its disbursement to the province as part of ongoing efforts to offset a future pension liability. Those deductions began in 2013 and will continue until 2019.

In total, Atlantic Lotto has reported $17.9 M in net profit for its P.E.I. operations for 2015-16, up from $15.2 M the year before.

But taking away the deductions for GeoSweep and pensions left only $11.7 M for provincial coffers, down from $13.4 M in 2014-15.

Geonomics shares sold for pennies on the dollar

Atlantic Lotto purchased shares inGeonomics back in 2011 for $8.7 M, with P.E.I. and New Brunswick agreeingto be on the hook if the investment didn't pan out.In exchange, the two provinces were to share in any profits from the investment.

In March of 2016 ALC soldtheshares for $160,000, and recouped P.E.I.'s entire $4.3 M investment by withholding the money from profits paid to the province.

In preparation for the anticipated loss,the Prince Edward Island Lotteries Commission placed impairments on its books in the previous two years, essentially declaring the investment was of no value.

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