North Gem Elementary Rocket Building Supplies
“Besides how to build a rocket, we’ve learned about practice, patience, and perseverance, especially while launching our rockets.”
Table of Contents Governor’s Message 2 Director’s Message 4 Chairman’s Message 6 Do Good Programs: • Scratch for Schools 7 • Bucks for Books 8 • Love Your School 8 • Classroom Wishlist 9-10 Draw Games 11 Scratch Games 12 Raffle, InstaPlay, PullTabs & TouchTabs 13 Lottery Retailers & Vendors 14 Charitable Gaming 14 Independent Auditor’s Report 16 Management’s Discussion & Analysis 18 Financial Statements 28 Notes to the Financial Statements 31
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Brad Little
Governor of Idaho
My Fellow Idahoans, Maintaining public confidence through security and integrity has been at the heart of the Idaho Lottery operations since 1989. When members of the public choose to participate, they know their games are run honestly and fairly. The Idaho Lottery has returned nearly $1.35 billion to Idaho. The Lottery’s annual financial contributions support the need for first-class, brick and mortar buildings on Idaho’s college campuses. Also, through annual dividends, the Lottery is reducing taxpayer burdens on voterapproved school bonds and levies through property tax relief. They are fulfilling their 36-year mission to support and improve public schools in Idaho. Join me in congratulating the Idaho Lottery staff for another momentous year and for delivering the necessary resources to provide quality educational facilities for all students. The Lottery team is a true partner as we build Idaho and invest in the future of our children. Sincerely,
Brad Little Governor of Idaho
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Lottery Mission:
The mission of the Idaho Lottery is to responsibly provide marketable games with a high degree of integrity to maximize the dividend for public schools and the Permanent Building Fund.
Lottery Operations:
The Idaho Lottery is a self-funding and self-governing agency of the State of Idaho. In-house operations include security, marketing, sales, media relations, warehousing and inventory control, information technology, and fiscal management. The Idaho Lottery operates with 51 full-time staff members.
Lottery Vision:
To become the highest performing jurisdiction in North America.
DIVIDEND HISTORY
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Andrew Arulanandam Idaho Lottery Director
My Fellow Idahoans, In July, I attended my first Idaho Lottery dividend presentation where Chairman Corbett presented Governor Little with a $75,000,000 check from the Idaho Lottery. What resonated with me is the exponential growth of the dividend. The first transfer to the People of Idaho in the summer of 1990 was $17,225,000. This summer’s dividend of $75,000,000 represents a 435% increase from our first year. Our revenue comes from players across Idaho and from those who visit from out of state. These dollars translate into tangible facility improvements and buildings across Idaho. From a greenhouse at Ririe High School where students learn agriculture and horticulture skills to improvements for the Veterans’ cemetery in Blackfoot that honors our men and women who served in the armed forces to locker room upgrades and improvements in Horseshoe Bend, and finally the replacement of a pedestrian walkway at the University of Idaho used by thousands of students every day. This summer’s dividend ceremony at the College of Western Idaho honored the work done by the Division of Public Works on behalf of the Permanent Building Fund Advisory Council. The new buildings on the campus of CWI are the result of efforts from local skilled tradespeople whose expertise completed the construction process and readied facilities for student and staff use. As we do every year, we felt privileged to return the dividend to the Department of Education and the Permanent Building Fund. There are many to thank for the success we enjoyed in Fiscal Year 2025: our everdiligent retailer base, our vendors, and our industrious staff of the Idaho Lottery. But, above all, we are so incredibly grateful to our loyal customers! None of this would be possible without your continued patronage. Looking ahead, we are proud to continue our efforts in providing for the future of the great State of Idaho. Sincerely,
Andrew Arulanandam 4
The five-member Commission adopts rules for the agency, approves contracts, and monitors Lottery operations. Its members are appointed by the Governor with each serving a five-year term. The Idaho Lottery Commissioners for FY 2025 are (left to right): Skip Smyser, Commissioner Susan Kerrick, Commissioner Amy Bloem, Commissioner Joni Stright, Commissioner Craig Corbett, Commission Chairman
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Craig Corbett
Idaho Lottery Commission Chairman
Dear Idahoans, I have been a part of the Idaho Lottery for the past 13 years and I have never seen two years conclude the same way. This year, we worked very hard to deliver the third largest sales year in its history – the third consecutive year over $400 million – and to deliver the third largest dividend in its history. The Idaho Lottery created five new millionaires during the fiscal year. We could have had a sixth, but one of the Idaho $1,000,000 Raffle prizes went unclaimed. That $1,000,000 prize was added to this year’s dividend total. This was a boon for our great state, but also a reminder for our players that there are a million reasons (or more) to check your tickets and keep them in a safe place. As many of you know, the Idaho Lottery was created to benefit public schools and the State’s permanent building facilities, ranging from elementary schools to college campuses. Quality education with quality facilities is the cornerstone for the future of Idaho. We must ensure our young students’ educational ambitions by providing the necessary means to offer safe and productive learning environments is the best dividend we can provide. Indeed, this past summer was my great honor and privilege to present Governor Brad Little with this year’s annual dividend for $75,000,000 for the betterment of all Idahoans. Sincerely,
Craig Corbett
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In the 1988 general election, the people of Idaho voted the Lottery into existence with the intent of providing financial enhancements to improve public education and the State of Idaho’s permanently owned facilities. This mission is what drives the Idaho Lottery’s everyday operations. Beyond the annual dividend, the Idaho Lottery offers additional resources for individual school and classroom needs though four Do Good initiatives: Love Your School, Bucks for Books, Classroom Wishlist, and Scratch for Schools. These participatory ventures provide specific resources for classroom needs and libraries. The combination of these four programs reached 626 public schools with a total of $383,225 awarded for individual classroom and library needs. The Idaho Lottery rigorously manages its budget. This chart reflects how Lottery funds are allocated. 67% 20%
A record 500 schools participated in one of eleven Scratch for Schools events this year, claiming $172,470 for individual classroom needs. From the largest event of 108 schools at the Ford Idaho Center in Nampa to the smallest event of 5 schools at the Cambridge Fire Station, teachers, parents, and administrators competed for the title of fastest Scratching School and to win hundreds in cash prizes. At each event, schools received 200 unscratched tickets, an entire package of the promotional game Teacher’s Pet, a fun, school themed ticket created specifically for Scratch for Schools. After its 24th year, the original and longest running Do Good initiative has hosted 196 events and has awarded nearly $2 million for specific classroom and school needs since October 2001. Here is a breakdown of the final results from all events this year: DATE 3/3/2025 3/5/2025 3/10/2025 3/11/2025 3/12/2025 3/26/2025 4/1/2025 4/2/2025
EVENT Nampa Twin Falls Lewiston Coeur d’Alene Sandpoint Boise Idaho Falls Salmon
SCHOOLS 108 71 49 43 18 72 60 12
TOTAL $36,391 $24,407 $16,443 $14,736 $6,586 $25,104 $20,620 $4,614
4/3/2025 4/8/2025 4/10/2025
Pocatello McCall Cambridge
49 13 5
$16,938 $4,986 $1,645
500
$172,470
TOTALS
6% 4%
1% 2% 7
For the sixth year, the Idaho Lottery worked with the Idaho Commission for Libraries to deliver this year’s Bucks for Books awards to elementary school libraries. From Paris to Old Town, crisscrossing the state, the experience is similar. Excited students are thrilled to receive new books they’ve requested from their librarian. Bucks for Books is making a difference for early education literacy in Idaho. There were seventeen recipients for a total of $50,000 this year. Since 2019, Bucks for Books has awarded 126 schools with a total of $325,000 for new book acquisition. Below is a list of this year’s recipients:
Schools are very creative at stretching their budgets. That’s where $1,000 from the Idaho Lottery can make a huge difference. Created in FY2024 and now in its first full year, the Idaho Lottery started the Love Your School program where players get to be the hero for the school! Using the Lottery’s VIP Club, players use their points in a sweepstakes drawing where they nominate their favorite school. At the end of each month, the Lottery randomly selects one school for the $1,000 award! July
Sherman Elementary, Nampa Donated by Chris Wisner
North Idaho:
August
Adams Elementary, Boise Donated by Dennis Vest
North Central Idaho:
September Ririe Junior Senior High School, Ririe Donated by Roger White
Treasure Valley:
October
Idaho Hill Elementary, Old Town = $3,000 Lakeside Elementary, Plummer = $3,000 Whitman Elementary, Lewiston = $3,000 Basin Elementary School, Idaho City = $3,000 McMillan Elementary School, Boise = $2,000 River Valley Elementary School, Meridian = $3,000
South Central Idaho:
Declo Elementary School, Declo = $3,000 Valley Elementary School, Hazelton = $3,000
Southeast Idaho:
J.R. Simplot Elementary, American Falls = $3,000 Paris Elementary School, Paris = $3,000 Rockland School District, Rockland = $3,000 Rulon M. Ellis Elementary, Chubbuck = $3,000
November Minico High School, Rupert Donated by Rick Tundag December Jefferson Elementary School, Boise Donated by Kevin Steiner January
A H Bush Elementary School , Idaho Falls Donated by Travis Garcia
February
Lewis & Clark Elementary School, Pocatello Donated by Logan Smith
March
Fort Hall Elementary School, Fort Hall Donated by Preston Buckskin
April
Frank Church High School, Boise Donated by Maureen McCall O’Lalor
May
Dennis Technical Education Center, Boise Donated by Maureen McCall O’Lalor
East Idaho:
Falls Valley Elementary, Idaho Falls = $3,000 Harwood Elementary School, Rigby = $3,000 Hazel T. Stuart Elementary, Shelley = $3,000 Ririe Elementary School, Ririe = $3,000 Temple View Elementary, Idaho Falls = $3,000
Kimberly High School, Kimberly Donated by Gricelda Burt
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Syringa Middle School’s instructional coach Kristy Rudan asked for “wish items” for each of the 40 teachers she supports in her school that serves 700 students. Using a utility van full of boxes, the Lottery delivered something for everyone including flexible seating stools, a whiteboard, an entire classroom set of headphones, and a 3-D printer, along with many other boxes of supplies and classroom needs. In FY 2025, Classroom Wishlist engaged with 97 schools and delivered supplies and equipment for a total of $148,755. Since the program began there have been 376 school projects funded worth $586,797.
North Idaho:
Canfield Library (Coeur d’Alene), Dyslexia Font Books $220 Elevate Academy (Post Falls), Lapboards & Math Supplies - $1,509 Farmin Stidwell Elementary (Sandpoint), Compass Kits - $595 Kootenai Classical Academy (Post Falls), Projector - $525 Kellogg Middle School (Kellogg), “The Den” Supplies - $6,000 Sagle Elementary (Sagle), Whisper Phones for Reading - $267 Skyway Elementary (Coeur d’Alene), Oregon Trail Games - $74 St. Maries High School (St. Maries), Stackable Chairs - $3,368 Washington Elementary (Sandpoint), Puppets - $434
Palouse Area:
Bovill Elementary (Bovill), Books and Reading Materials - $504 Genesee School District (Genesee), Musical Instruments - $1,964 Highland Joint School District #305 (Craigmont), Books - $933 Leana Whitmore Elementary (Moscow), Sensory Supplies - $2,159 McSorley Elementary (Lewiston), Keyboards and Styluses -$970 Orofino Elementary (Orofino), Flexible Seating - $650 Orofino Junior Senior High, Whiteboards & Markers - $394 Orofino Elementary (Orofino), Wobble Stools - $509 Orofino Jr Sr High School (Orofino), Spanish Books - $588 Riggins Elementary (Riggins), Books - $950
Southwest Idaho:
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Barbara Morgan Elementary (McCall), Baby Chicks Project - $630 Butte View Elementary (Emmett), Circuit boards - $2,235 Butte View Elementary (Emmett), Math Supplies - $803 Caldwell High School (Caldwell), Science Lab Supplies - $9,219
Canyon Springs Alternative (Caldwell), Security Items - $4,010 Canyon Springs Alternative (Caldwell), Backpacks & Calculators - $1,391 Cardinal Academy Public Charter (Boise), Laptops - $9,750 Centennial High School (Boise), Math Supplies - $1,263 Central Academy (Meridian), Books - $587 Central Elementary (Nampa), Math & Reading Supplies - $750 Desert Sage Elementary (Boise), 3D Printer - $1,199 Desert Sage Elementary (Boise), Headphones - $720 East Canyon Elementary (Nampa), Furniture & Supplies - $3,140 Idaho Arts Charter (Nampa), Class Desks & Furniture - $1,783 Idaho Arts Charter Elementary (Nampa), Sensory Supplies - $1,246 Idaho Fine Arts Academy (Meridian), Chairs & Books - $1,702 Lowell Scott Middle School (Boise), Sensory Supplies - $353 Maple Grove Elementary (Boise), Books - $813 Maple Grove Elementary (Boise), Flexible Seating - $765 McMillan Elementary (Boise), Art Supplies - $2,008 Melba JR/SR High School (Melba), Books - $855 Mountain Home High School, Classroom Tables - $6,000 Nampa High School - PREP, Life Skills Class Supplies - $719 New Plymouth Elementary, Classroom Supplies - $422 New Plymouth Elementary, Flexible Seating & Desks - $904 New Plymouth Middle School, Feminine products - $1,149 Peregrine Elementary (Meridian), Books - $2,051 Peregrine Elementary (Meridian), Classroom Supplies - $1,784 Ponderosa Elementary (Meridian), Books - $799 Ponderosa Elementary (Meridian), Deaf & Blind Resources - $522 River Valley Elementary (Meridian), Tables - $707 Rocky Mountain High School (Meridian), ASL Resources - $1,757 Rocky Mountain High School (Meridian), Rolling Whiteboards - $1,050 Rolling Hills Public Charter (Boise), Circuits & Science Supplies - $495 Sherman Elementary (Nampa), 3D Printer & Scanner - $700 Star Elementary (Star), Books - $1,550 Star Middle School (Star), Seating & Classroom Supplies - $1,056 Summerwind STEM Academy (Boise), YOTO Players & Cards - $416 Syringa Middle School (Caldwell), Project & Class Supplies - $7,785 Valley View Elementary (Bonners Ferry), Legos - $3,436 Victory Middle School (Meridian), Beanstack Software & Prizes - $2,287
South Central Idaho: Buhl High School, Laptops & Classroom Supplies - $750 Burley Jr High School, Classroom Supplies - $515 Burley Jr High School, 3D Printer - $1,847 Glenns Ferry School District, Student Recognition Supplies - $80 Glenns Ferry Elementary, Digital Camera - $370 Filer Intermediate School, Calming Corner Supplies - $892 Kimberly Middle School, School Desks - $3,528 Piller Falls Elementary (Twin Falls), Books - $1,903 Popplewell Elementary (Buhl), Seating & Sensory Supplies - $517 Shoshone Elementary, Books - $2,247 Stanley School, Library furniture - $9,038
South East Idaho: Black Canyon Elementary (Grace), Guest Janie Veltkamp - $1,103 Chief Tahgee Elementary (Pocatello), Classroom Supplies - $448 Edahow Elementary (Pocatello), Classroom Supplies - $619 Franklin Elementary, Science Olympiad Buildable Projects - $778 Georgetown Elementary, Library Shelves - $220 Lewis and Clark Elementary (Pocatello), Furniture & Printer - $1,492 Lewis and Clark Elementary (Pocatello), Classroom Supplies - $551 Mt. View Elementary (McCammon), Classroom Furniture - $715 North Gem Elementary (Bancroft), Rocket Building Supplies - $444 North Gem Elementary (Bancroft), Filament & 3D Grinder - $6,950 Rulon Ellis Elementary (Chubbuck), ADHD & Trama Supplies - $776 Wilcox, Lewis & Clark, Syringa, and Gate City Elementary (Pocatello), Flexible Seating - $885
“This huge space is so bright and welcoming. It’s allowing the students to have a real love of reading.” said Sammy Forsgren, the 3rd through 6th grade teacher from Stanley Elementary.
East Idaho:
Adams Elementary (Rexburg), Furniture & Supplies - $725 Adams Elementary (Rexburg), Art Supplies - $650 Adams Elementary (Rexburg), Headphones & Paper - $545 Green Acres (Pocatello), Sensory Supplies - $2,327 Kershaw Intermediate (Sugar City), Sensory/Class Supplies - $922 Madison Middle School (Rexburg), Printer, Ink & Paper - $285 Rigby Middle School (Rigby), Special Education Supplies - $1,619 Rigby Middle School, Library Furniture & Supplies - $1,740 Ririe Elementary, Oxobots - $2,050 Riverbend Elementary (Blackfoot), 3D Printer - $745 Riverbend Elementary (Blackfoot), Filament & iPAD - $992 Shelley School District, Books - $1,300 South Fremont Junior High (St. Anthony), Field trip - $1,870 South Fork Elementary (Rigby), Classroom Mailboxes - $189 South Fork Elementary (Rexburg), Miroscope, Science Items - $650 Theresa Bunker Elementary (Idaho Falls), Flexible Seating - $1,093
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Draw Games™
DRAW SALES
$86,444,038
$92,253,621
$65,839,091
$60,656,678
FY22
FY23
FY24
FY25
Overall, for the Fiscal Year, draw game sales were less than the previous record year due in large part to the absence of any billion dollar or higher jackpots on Powerball and Mega Millions. In addition, the Idaho Lottery retired 5 Star Draw in April. Idaho-only games, those sold exclusively within the State’s borders, continued to enjoy success. POWERBALL While Idaho’s flagship game delivered a solid year of performance despite never delivering a single billion-dollar jackpot run when compared to the three recorded in FY24. The largest jackpot of the year reached $526.5 million at the end of March. With the PowerPlay included, four players won $100,000. One player each also won $150,000, $200,000, $250,000, and $2,000,000 throughout the year. MEGA MILLIONS Shortly after Christmas, the largest jackpot of the year for any game in the United States occurred with Mega Millions when the game reached $1.269 billion. In April, the previous version of Mega Millions was discontinued as a new-look version was introduced. The price was raised from $2 to $5 per play. Included with each line of play is a randomly assigned multiplier number that applies to all non-jackpot winning prizes, giving players the chance to win a minimum of $10 up to $10,000,000. IDAHO CASH Idaho Lottery players enjoy Idaho-only games as evidenced by the success of Idaho Cash which enjoyed another good year. There were four jackpot winners during the year with the game’s largest ever jackpot run occurring at the end of the Fiscal Year. The game realized a nearly 20% increase in sales. LOTTO AMERICA Players discovered Lotto America during the Fiscal Year, enjoying a sustained lift in sales due to the second largest jackpot run in the game’s history, a $37.5 million jackpot run that ended in early June. Compared to FY24, sales for Lotto America were nearly 50% higher in FY25. This jackpot run was the largest players could win at $1 per ticket.
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Scratch Games™
SCRATCH SALES
Idaho creates our own Scratch Games in-house. It has been a unique trademark of the Idaho Lottery since 1989. We have tremendous pride in our Scratch product portfolio and this past year; during the fourth edition of the Name That Scratch Game contest, they contributed to this year’s 52-game annual line up. NAME THAT SCRATCH GAME CONTEST What’s in a name? The Idaho Lottery’s “Name That Scratch Game” contest is an engaging competition where participants submitted their creative ideas for new Scratch Game names. The contest, which encouraged Idaho residents to think outside the box and come up with catchy names for potential new Scratch games from mid-September to mid-October, received over 14,000 thousand submissions, showcasing the creativity and enthusiasm of the Idaho Lottery’s dedicated players. The winners were:
$239,756,217 $233,032,004 $229,434,876 $222,270,791
FY22
FY23
FY24
FY25
• 1st Place - Gary Gaskill of Idaho Falls for “Yeti to Party” • 2nd Place - Jamie Jensen of Rathdrum for “Cheddar Getter” • 3rd Place - Jennifer Buseman of Middleton for “Cashtronaut” JURASSIC WORLD Tied to the motion-picture release from Universal Studios, adventure awaited players of Jurassic World, the Scratch Game where they could win up to $50,000 from one of the nine collector’s edition Scratch tickets, or, up to $1,000,000 from the second-chance promotion where winners receive the trip of a lifetime to Hawaii and visit Kualoa Ranch nature preserve where they filmed previous Jurassic World and Jurassic Park movies. BUCKS ‘N TRUCKS Bucks ‘N Trucks was a popular Scratch Game where players could win one of three, top of the line and fully loaded Ford F-150 Tremor trucks. There were two 2025 Ford F-150 Tremor trucks players could win instantly in the game and one through a second chance draw at the end of the game.
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RAFFLE SALES
$2,500,000
$2,500,000
FY22
FY23
$4,500,000
$4,500,000
FY24
FY25
Raffle Game Fiscal Year 2025 was the second consecutive year to have a second, $1,000,000 prize and 450,000 tickets available for the Idaho $1,000,000 Raffle. The game sold out in early December. Remarkably, one of the two $1,000,000 winning tickets, sold by a retail location in Star, Idaho, was never claimed by the winner. The ticket expired on June 30, 2025. The winning amount was returned to the Idaho Lottery’s overall dividend contribution to support public schools and buildings. In addition, sales from the Idaho $1,000,000 Raffle generated another $1.6 million for the Lottery’s beneficiaries.
InstaPlay Games The InstaPlay product line continued its success among players, creating more than $13.8 million in annual sales. These terminalbased, Scratch style games include a family of rolling jackpot games, Idaho Jackpot – the original $5 InstaPlay jackpot game, the $10 Big Money Jackpot game, the $20 Twenty 20s game, the $20 Ultimate Diamond Jackpot game, and the $30 Deal Me In game. During the year, Ultimate Diamond recorded three jackpot winners, Idaho Jackpot recorded two jackpot winners, as did the newest rolling jackpot game, Deal Me In, which set a game high jackpot win of $421,359. That was the largest InstaPlay jackpot win of the year.
PullTab and TouchTab Games PullTabs games are best enjoyed in social settings and agecontrolled environments. They are played using self-service terminals throughout Idaho. Classic ‘break open’ PullTabs games remain well-liked after thirtysix years in Idaho’s marketplace. The popularity among players for TouchTabs, digital version of PullTabs has become well established over the past fifteen years due to the variety of fun games and the entertainment value offered by them. These tickets are also less expensive to deliver to retailers and offer added security features. 13
Retailers and Vendors The Idaho Lottery has a long-standing commitment to its brick-and-mortar retail network of 1,226 locations, in 166 communities, across the Gem State. Throughout the course of the year, retailers earned just over $23.3 million in commissions. All totaled since the Idaho Lottery began operations in 1989, Idaho’s retailers have earned $365.7 million. The Idaho Lottery is grateful for the continued dedication and support from all our partners. VENDOR PARTNERS OF RECORD The Idaho Lottery appreciates the creativity, strategic ability, and professional execution of these companies’ efforts during Fiscal Year 2025. • Intralot, USA – Terminal, vending and gaming systems software, operators and developers Headquarters: Duluth, GA, United States • Pollard Banknote, Inc. – Scratch Games™ developer/printer Headquarters: Winnipeg, Manitoba, Canada (printing in Ypsilanti, MI) • Scientific Games International, Inc. – Scratch Games™ developer/printer Headquarters: Las Vegas, NV (printing in Alpharetta, GA), United States • Diamond Game – a Pollard Banknote Company – PullTabs/TouchTabs provider International Gamco Headquarters: Chatsworth, CA, United States • Lawrence & Schiller – media and creative services partner Headquarters: Souix Falls, SD, United States
Charitable Gaming The Idaho Lottery received oversight of Charitable Gaming in 1992. The Lottery is charged with protecting the public from fraudulently conducted operations and to assure that charitable groups and institutions realize the profits from these games. When a non-profit organization or a charity wishes to conduct a bingo game or a raffle in Idaho, they are required by law to obtain a license from the State through the Idaho Lottery. Licenses for bingo and raffle operations are necessary when the annual gross revenue (bingo) or prize value (raffle) exceeds statutory benchmarks. Each year in December, the Idaho Lottery publishes an Annual Report on Charitable Gaming in Idaho. For more information on charitable bingo and raffles in Idaho, visit https://www.idaholottery.com/charitable-gaming 14
Financial Statements
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Financial Statements
Independent Auditor’s Report To the Director and Board of Commissioners Idaho Lottery Boise, Idaho Report on the Audit of the Financial Statements Opinion We have audited the financial statements of the Idaho Lottery (the Lottery), an agency of the State of Idaho, as of and for the years ended June 30, 2025 and 2024, and the related notes to the financial statements, as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the Lottery, as of June 30, 2025 and 2024, and the respective changes in financial position, and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Lottery, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter As discussed in Note 1, the financial statements of the Lottery are intended to present the financial position, the changes in financial position, and cash flows of only that portion of the State of Idaho that is attributable to the transactions of the Lottery. They do not purport to, and do not, present fairly the financial position of the State of Idaho as of June 30, 2025 and 2024, the changes in its financial position, or its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. 16
In performing an audit in accordance with GAAS and Government Auditing Standards, we: •
Exercise professional judgment and maintain professional skepticism throughout the audit.
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Lottery’s internal control. Accordingly, no such opinion is expressed.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of employer’s share of net pension liability, and the schedule of employer’s contributions as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated November 21, 2025, on our consideration of the Lottery’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the Lottery’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Lottery’s internal control over financial reporting and compliance.
Boise, Idaho November 21, 2025
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Management’s Discussion and Analysis The following Management Discussion and Analysis (MD&A) allows Idaho Lottery (Lottery) management to provide users of the financial statements with an analysis of the Lottery’s financial activities based upon currently known facts, decisions and conditions. Please read it in conjunction with the Idaho Lottery Financial Statements that follow this section. A key focus of the MD&A is the discussion of the current year’s results in comparison with the prior year. While the accompanying financial statements present the financial position of the Idaho Lottery as of June 30, 2025 and 2024, and financial activity for the years then ended, the MD&A also includes information for the year ended June 30, 2023, in order to allow for a broader comparison. OVERVIEW OF THE ACCOMPANYING FINANCIAL STATEMENTS These required statements offer short and long-term financial information about the Idaho Lottery. The Statements of Net Position provides information about the nature and amounts of investments in resources (assets and deferred outflows of resources) and obligations (liabilities and deferred inflows of resources) at the close of fiscal year 2025 and 2024. The Statements of Revenues, Expenses and Changes in Net Position, measures the success of the Lottery’s operations for fiscal year 2025 and 2024 and the resulting increase or decrease in net position. The Statements of Cash Flows - The primary purpose of this statement is to provide information about the Lottery’s cash receipts and cash payments during the fiscal year 2025 and 2024. The statement reports cash receipts, cash payments and net changes in cash resulting from operations, investing and financial activities and provides answers to such questions as where cash originated from and where it went during the fiscal years. The Idaho Lottery is structured as a single enterprise fund with revenues recognized when earned, not when received. Expenses are recognized when incurred, not when paid. Capital assets are capitalized and depreciated over their useful lives. The notes to the financial statement contain, among other information, a description of the Idaho Lottery’s significant accounting policies. The accompanying notes are an integral part of the financial statements. The reader should refer to the financial statements and the accompanying notes for information on the individual components of the Statements of Net Position. The following analysis is intended to highlight selective changes between 2025 and 2024 and between 2024 and 2023.
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Management’s Discussion and Analysis // June 30, 2025 and 2024 2025
2024
Change 2025 to 2024
2023
Change 2024 to 2023
$81,678,099 3,987,599 133,343 85,799,041
$90,090,354 1,783,819 356,033 92,230,206
$ (8,412,255) 2,203,780 (222,690) (6,431,165)
$87,749,072 2,415,826 280,340 90,445,238
$ 2,341,282 (632,007) 75,693 1,784,968
Reserves with MUSL Capital Assets, net Right-of-use asset, net Other Post Employment Benefit Asset
2,814,508 267,450 1,294,269 302,680
2,624,051 355,390 1,506,956 271,415
190,457 (87,940) (212,687) 31,265
2,667,415 211,172 1,402,832 268,245
(43,364) 144,218 104,124 3,170
Deferred outflows pensions
927,176 $91,405,124
1,404,329 $98,392,347
(477,153) ($6,987,223)
1,554,787 $96,549,689
(150,458) $1,842,658
$ 2,151,815 75,000,000 41,055 8,031,668 440,000 85,664,538
$ 2,032,682 84,000,000 265,334 6,899,271 412,567 93,609,854
$ 119,133 (9,000,000) (224,279) 1,132,397 27,433 (7,945,316)
$ 1,743,206 82,000,000 193,848 6,319,191 310,377 90,566,622
812,444 34,841 2,366,615 88,878,438
1,042,091 16,654 2,703,646 97,372,245
(229,647) 18,187 (337,031) (8,493,807)
1,003,813 36,594 2,406,843 94,013,872
38,278 (19,940) 296,803 3,358,373
138,190
-
138,190
10,743
(10,743)
309,275 2,079,221 2,388,496 $91,405,124
407,688 612,414 1,020,102 $98,392,347
(98,413) 1,466,807 1,368,394 $ (6,987,223)
299,813 2,225,261 2,525,074 $96,549,689
107,875 (1,612,847) (1,504,972) $1,842,658
ASSETS CURRENT ASSETS Cash and cash equivalents Receivables Other Total current assets
LIABILITIES AND NET POSITION CURRENT LIABILITIES Accounts payable and accrued expenses Dividend payable Due to MUSL Prizes payable Current portion of capital leases Total current liabilities NON-CURRENT LIABILITIES Long-term, capital leases Other Post Employment Benefits Net pension liability Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows pensions NET POSITION Invested in capital assets Unrestricted TOTAL NET POSITION TOTAL LIABILITIES AND ASSETS
19
$
289,476 2,000,000 71,486 580,080 102,190 3,043,232
Management’s Discussion and Analysis // June 30, 2025 and 2024 Receivables The Lottery’s billing week is from Sunday through Saturday. The amount due from retailer transactions (i.e., sales, less commissions and prizes paid by the retailer) are transferred from the retailer’s bank account to the Lottery’s account the following Thursday. Similarly, any amounts due to the retailer from the Lottery are transferred to the retailer’s account on Thursday. The Lottery refers to this transfer as a “sweep”, and this mandatory process between the Lottery and its retailer customers simplifies collections. The receivables balances for 2025, 2024, and 2023, consist of the following: Week ended June 30 sales Accounts in collection process Total
2025 $3,987,324 275 $3,987,599
2024 $1,779,902 3,917 $1,783,819
2023 $2,409,913 5,913 $2,415,826
Ticket Inventory (Other Assets subcategory) Two Scratch Ticket printing contracts were awarded in March 2021 to primary vendor, Pollard Banknote and the secondary printing contract to Scientific Games. The contracts include three, two-year extension options. PullTab tickets are expensed when the tickets are sold to the retailers. The Ticket Inventory balances on June 30, 2025, 2024, and 2023, consist of any unamortized production costs of scratch tickets. Property and Equipment, Net The balances shown were derived as follows: Beginning balance Add: Acquisitions Deduct: net retirements Deduct: depreciation Ending balance
2025 $ 355,390 91,453 (68,888) (110,505) $ 267,450
2024 $ 211,172 245,533 (88,545) (12,770) $ 355,390
2023 $ 242,738 72,117 (103,683) $ 211,172
LIABILITIES AND NET POSITION Dividend Payable The dividends declared by the Idaho Lottery Commission for 2025, 2024, and 2023, were $75,000,000, $84,000,000, and $82,000,000, respectively. The dividend is declared on or before June 30th and paid on July 1 or shortly thereafter. Prizes Payable The increase between 2024 and 2025 of $1,132,397 is primarily due to the increase in the estimated prize payable for scratch games. Though prizes payable for most draw games decreased, the payable for scratch increased by $1,878,372. Compensated Absences Effective July 1, 2025 the Idaho Lottery adopted provisions of GASB Statement No. 101 Compensated Absences. As a result of this change in accounting principle, it was not necessary for the Idaho Lottery to restate priorperiod information for earlier periods than those presented in the basic financial statements. Therefore, information for the year ended June 30, 2024 was not restated. See Note 1 to the financial statements for further information on the change in accounting principle. 20
Management’s Discussion and Analysis // June 30, 2025 and 2024 Total Net Position Net position represents the difference between the Lottery’s total assets and deferred outflows of resources and its total liabilities and deferred inflows of resources. Net position is allocated between the portion which represents the investment in capital assets (i.e., plant equipment and other fixed assets) and the total. REVENUES, EXPENSES AND CHANGES IN NET POSITION Operating Revenues Comparative operating revenues for the four major product sales classifications: Draw tickets, Scratch tickets, PullTab/TouchTab tickets and other revenue are as follows: 2025
2024
Change 2024 to 2025
2023
Change 2023 to 2024
$ 26,767,410 2,265,594 21,550,066 5,789,942 4,116,102 2,944,757 1,076,360 1,328,860 4,500,000 70,339,091
$ 48,591,288 2,312,401 25,695,887 1,816,370 5,464,692 2,756,701 2,455,928 1,912,440 1,247,964 4,500,000 96,753,671
$ (21,823,878) (46,807) (4,145,821) (1,816,370) 325,250 1,359,401 488,829 (836,080) 80,896 (26,414,580)
$ 39,099,421 2,313,177 28,794,696 1,750,748 5,202,628 3,653,511 2,073,547 2,413,520 79,248 1,063,542 2,500,000 88,944,038
$ 9,491,867 (776) (3,098,809) 65,622 262,064 (896,810) 382,381 (501,080) (79,248) 184,422 2,000,000 7,809,633
Scratch ticket Sales PullTab ticket Sales TouchTab ticket Sales Total Sales
246,919,093 3,024,205 81,440,146 401,722,535
242,739,898 2,538,043 79,715,027 421,746,639
4,179,195 486,162 1,725,119 (20,024,104)
252,967,146 2,151,713 78,435,101 422,497,998
(10,227,248) 386,330 1,279,926 (751,359)
Data Line Charges Other revenues Total operating revenues
660,688 127,226 $402,510,449
661,938 53,390 $422,461,967
(1,250) 73,836 $ (19,951,518)
649,825 49,666 $423,197,489
12,113 3,724 (735,522)
Draw Game Sales Powerball Pick 3 Mega Millions Weekly Grand Lucky for Life Lotto America Idaho Cash 5 Star Draw 2by2 Pick 4 Raffle
Total Draw Game Sales
$
Draw Game Ticket Sales The Powerball game is sold in forty-five states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands. These lotteries contribute a fixed percentage of their Powerball sales revenue to a consolidated Jackpot prize. There are three Powerball drawings a week with a minimum-starting jackpot of $20 million. Each time the jackpot is not won it rolls into the next draw and thus the jackpot grows until it is won. Selling for close to 30 years, Powerball is still the most recognizable brand and game offered by the Idaho Lottery. Current odds of winning the Powerball jackpot are 1:292,201,338.
21
Big game sales are very jackpot driven; the higher the announced jackpot, typically the higher the sales. While Powerball enjoys a consistent core group of players, as half-a-billion dollar or higher jackpots become more common place, more casual lottery players wait to join the game until it reaches near-record levels. While larger jackpot runs have generally tended to make big game sales trend up, it is important to be aware of the relationship of the jackpot and sales as illustrated in the next chart.
Management’s Discussion and Analysis // June 30, 2025 and 2024 Draw Game Ticket Sales continued... Powerball Relationship Between Announced Jackpot and Sales 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Average Announced Jackpot Per Draw $ 158,490,446 $ 363,420,382 $ 239,288,462 $ 214,013,986 $ 152,447,619 $ 108,490,385 $ 200,451,923 $ 176,504,762 $ 166,451,923 $ 160,275,143
Average Sales Per Draw $ 170,493 $ 309,499 $ 250,637 $ 204,340 $ 250,703 $ 194,258 $ 288,163 $ 316,170 $ 271,443 $ 406,027
Annual Sales $ 26,767,410 $ 48,591,288 $ 39,099,421 $ 30,242,308 $ 26,323,815 $ 20,397,045 $ 30,257,158 $ 33,197,811 $ 28,501,559 $ 42,632,859
In 2010, the Idaho Lottery began selling Mega Millions with Megaplier. The Mega Millions game is similar to Powerball but holds drawings on Tuesday and Friday. Mega Millions was originally launched and sold by states NOT selling Powerball. All states came together in 2010 to agree on a cross selling initiative which allowed all states to sell both of the “big games” across borders. Beginning in April of 2025 the Mega Millions game changed to an updated format. These changes included the automatic addition of a Megaplier, higher starting jackpot, and the reduction of one Mega Ball. With the updates also came a change to $5 per play. Mega Millions is sold in forty-seven localities – forty-five states plus the District of Columbia and the U.S. Virgin Islands, with odds of winning the jackpot 1:290,472,336. As with Powerball, there is typically a strong relationship between the jackpot and resulting sales. Mega Millions Relationship between Announced Jackpot and Sales
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Average Announced Jackpot Per Draw $ 266,413,462 $ 321,884,615 $ 275,847,619 $ 143,564,356 $ 166,576,923 $ 136,914,286 $ 219,259,615 $ 146,490,385 $ 78,152,381 $ 101,730,769
Average Sales Per Draw $ 207,212 $ 247,826 $ 274,235 $ 133,519 $ 190,421 $ 125,834 $ 224,098 $ 130,040 $ 89,755 $ 99,912
Annual Sales $ 21,550,066 $ 25,773,907 $ 28,794,696 $ 13,885,979 $ 19,803,804 $ 13,212,519 $ 23,530,337 $ 13,524,177 $ 9,334,536 $ 10,390,885
The smaller jackpot games, both in-state and multi-state games, are as sensitive to jackpots as Powerball and Mega Millions. Both games have a consistent player base, although players will sometimes shift their buying habits from both games to Powerball and Mega Millions when jackpots are unusually large. The Lottery offers the following Draw games: Powerball, Mega Millions, Lucky for Life, Lotto America, Idaho Pick 3, Idaho Cash, Pick 3, and Pick 4. 5 Star Draw was a draw game also offered during the year until it ended on April 4, 2025. The Draw games, with higher profit margins than Scratch, increase profits in the Draw category.
22
Management’s Discussion and Analysis // June 30, 2025 and 2024 Scratch™ Ticket Sales Sales are up 1.7% in Scratch games from fiscal year 2024 to 2025. The ongoing goal when managing the Scratch game portfolio is to introduce fun, easy to play themes in all price points. The lower priced games typically have a lower pay out and are more profitable. The more expensive games generally offer more interesting and longer play features than the simple “match three” format of many one and two-dollar games. As a result, some players feel the higher priced tickets offer more entertainment value. Keeping the perfect Scratch Ticket Game Portfolio is a challenge, as higher priced tickets are less profitable, so the mix is important and an inordinate number of higher price point sales can skew profit results dramatically. Scratch ticket sales by price point for the fiscal years 2025, 2024, and 2023 are as follows:
One-dollar games Two-dollar games Three-dollar games Five-dollar games Ten-dollar games Twenty-dollar games Thirty-dollar games Fifty-dollar games InstaPlay Total Sales Change over prior year
2025 3,955,258 5,298,690 10,812,456 50,205,430 56,340,570 38,771,220 15,462,030 52,186,350 13,887,089 $ 246,919,093 $ 4,179,195 $
% Change -6.2% -6.7% 3.6% -5.8% -0.2% 25.9% -25.0% 8.8% 4.4% 1.7%
2024 $ 4,215,405 5,680,380 10,433,736 53,291,395 56,438,630 30,786,220 20,616,810 47,972,300 13,305,022 $242,739,898 $ (10,227,248)
% Change -8.6% -20.0% -21.4% -2.9% 14.6% -24.7% -32.2% 22.0% 0.7% -4.0%
2023 4,613,886 7,100,596 13,278,600 54,886,595 49,268,980 40,896,820 30,402,990 39,307,750 13,210,929 $252,967,146 $ 18,134,819 $
% Change -12.3% 13.0% -3.7% 2.1% -6.6% -0.8% -30.7% 640.8% 5.2% 7.7%
PullTab Ticket Sales PullTab tickets, which are sold mainly in restaurants and bars, historically make up less than 2% of the Lottery’s total annual sales. Although these games fight competition from illegal gaming machines, annual sales were $3,024,205 in fiscal year 2025, an increase of $486,162 from fiscal year 2024 sales of $2,538,043. Concentrated efforts between the Lottery and our PullTab vendor, International Gamco are ongoing and while the paper PullTab product continues to hold with steady sales, we conservatively seek out additional selling locations and increased sales in the coming fiscal year. As of February of 2018, vendor International Gamco is wholly owned by Pollard Banknote. In May of 2019, the Lottery Commission approved a subcontract agreement between International Gamco and Diamond Game (another wholly owned subsidiary of Pollard Banknote) and in 2025 an extension was granted for five years – extending the contract term to June 30, 2026. With the extension comes a revised revenue share formula that will yield an estimated $1,000,000 extra in net revenue to the Idaho Lottery.
23
Management’s Discussion and Analysis // June 30, 2025 and 2024 TouchTab Sales Together with our PullTab vendor partner International Gamco, the Idaho Lottery launched a pilot project from November 2010 to June 2011 to introduce a new TouchTab dispensing device to retailers around Idaho. The TouchTab dispensing device is colocated with our paper ticket vending machines (TabBOXX), and only offered in age-controlled environments (bars and taverns). TouchTab games are nearly identical to paper PullTabs; each game is played just like the paper version; with a predetermined number of tickets; odds are finite with winning tickets randomly seeded throughout the number of tickets in the game; and prizes must be claimed by the selling retailer. Subsequent phases, after the successful pilot, added additional age-controlled locations that have passed our criminal and financial background checks. While the Idaho Lottery expects to deliver enhanced dividends from this product going forward, the payout to the player for this product is higher than other offerings, the resulting profit margin is lower. At $81,440,146 in fiscal year 2025, TouchTab sales increased by $1,725,119 over fiscal year sales in 2024 of $79,715,027. Interest Income on Funds Held at the State All idle cash with the State Treasurer is invested in a variety of securities. The Lottery is an involuntary member of this pool. Estimated interest accrued is reflected in the Lottery’s financial statements. The interest earned is offset by a transfer to the State of Idaho General Fund. Interest income earned on the funds held at the state by the Lottery for 2025 and 2024, were $1,855,886 and $2,153,131, respectively. Operating Expenses 2025, 2024, and 2023 operating expenses are as follows:
Prizes, net of unclaimed prizes Retailer commissions Gaming system services Scratch tickets PullTab tickets Advertising Salaries and benefits Depreciation Amortization Telephone and data line costs Professional services Office and equipment Shipping costs Supplies Tribe compact Other costs Total operating expenses
2025 $272,890,667 23,351,722 9,005,027 2,474,110 5,189,648 5,230,494 4,899,832 110,505 421,322 59,740 397,663 265,923 886,646 84,502 186,589 654,111 $326,108,501
2024 $286,162,989 24,709,816 9,500,852 2,666,397 5,010,368 5,013,594 4,480,309 101,314 442,296 48,213 71,597 74,218 835,464 77,381 216,358 535,516 $339,946,682
Change 2023 to 2024 $ (13,272,322) (1,358,094) (495,825) (192,287) 179,280 216,900 419,523 9,191 (20,974) 11,527 326,066 191,705 51,182 7,121 (29,769) 118,595 $ (13,838,181)
2023 $285,564,486 24,704,242 9,638,519 2,711,752 4,806,423 4,607,132 4,421,737 103,683 320,247 26,630 163,742 124,463 801,929 115,290 182,851 390,371 $338,683,497
Change 2022 to 2023 $ 598,503 5,574 (137,667) (45,355) 203,945 406,462 58,572 (2,369) 122,049 21,583 (92,145) (50,245) 33,535 (37,909) 33,507 145,145 $ 1,263,185 24
Management’s Discussion and Analysis // June 30, 2025 and 2024 Operating Expenses continued ... Generally, the changes in expenses during the three fiscal years reflect the change in the level of sales as well as a shift in the product sales mix, i.e., the relative percentage that each product group (Draw, Scratch, Raffle, PullTab, and TouchTab) represents of total sales. Sales levels and mix for each of the years is represented below:
Draw sales Scratch ticket sales Raffle sales PullTab ticket sales TouchTab ticket sales Total Sales Increase (decrease) from prior year
2025
% Sales
2024
% Sales
2023
% Sales
$ 65,839,091 246,919,093 4,500,000 3,024,205 81,440,146 $401,722,535 $ (20,024,104)
16.4% 61.5% 1.1% 0.8% 20.3% 100.0%
$ 92,253,671 242,739,898 4,500,000 2,538,043 79,715,027 $421,746,639 $ (751,360)
21.9% 57.6% 1.1% 0.6% 18.9% 100.0%
$ 86,444,038 252,967,146 2,500,000 2,151,713 78,435,101 $422,497,998
20.5% 59.9% 0.6% 0.5% 18.6% 100.0%
$ 46,183,106
Certain cost categories, namely advertising, salaries and benefits, depreciation and amortization, telephone and data line costs, professional services, office and equipment, supplies and other costs are only minimally affected by sales increases or shifts in the sales mix. However, the change in sales level or mix does impact prizes, retailer commissions, gaming system services, Scratch and PullTab ticket costs, as well as shipping, detailed in the following information which outlines prize expense percentages. Prizes, Net of Unclaimed Prizes Each of the three product types, Draw games, Scratch games (including InstaPlay), and PullTabs (including TouchTabs) have differing average prize expense percentages associated with that product. The average prize percentage for each category depends upon the prize percentage of the individual games within that product type. For example, Powerball has a prize percentage of 50% (so 50% of the sales go to the prize fund for Powerball); Pick 3 also has a 50% prize percentage while Mega Millions has a prize percentage of 51%. The overall average prize percentage for the suite of Draw game products depends upon the sales mix for the games. Similarly, most Scratch games have different prize percentages, with a range of 62-78%, with higher price point tickets generally offering a higher prize payout percentage. PullTab games have minimal variance and average a prize percentage of 70.2%, while TouchTab games have a prize percentage of between 78-82%. Two other factors are considered in computing prize expense. The first factor is the prize expense associated with second chance draws. Second chance draws are held in conjunction with Draw or Scratch games, where the drawing entry is normally a non-winning ticket. The second factor is unclaimed prizes. The value of all prizes not claimed within the statutory 180-day claiming period is offset against and reduces that year’s total prize expense. The product mix and resulting sales can significantly skew the overall prize payout.
25
Management’s Discussion and Analysis // June 30, 2025 and 2024 Prizes, Net of Unclaimed Prizes continued ... Prize expense, net of unclaimed prizes, consisted of the following for the years 2025, 2024, 2023: 2025 Draw ticket sales Scratch ticket sales Raffle sales PullTab ticket sales TouchTab ticket sales Second Chance draws Unclaimed prizes
Sales $ 65,839,091 246,919,093 4,500,000 3,024,205 81,440,146 -
Prize % 48.48% 72.03% 52.00% 70.16% 80.04% -
Prizes $ 31,920,496 177,852,238 2,340,000 2,121,789 65,182,946 285,235 (6,812,037) $ 272,890,667
2024 Draw ticket sales Scratch ticket sales Raffle sales PullTab ticket sales TouchTab ticket sales Second Chance draws Unclaimed prizes
Sales $ 92,253,671 242,739,898 4,500,000 2,538,043 79,715,027 -
Prize % 52.92% 71.90% 53.03% 70.17% 80.06% -
Prizes $ 48,821,411 174,526,767 2,386,555 1,780,823 63,820,694 542,769 (5,716,030) $ 286,162,989
2023 Draw ticket sales Scratch ticket sales Raffle sales PullTab ticket sales TouchTab ticket sales Second Chance draws Unclaimed prizes
Sales $ 86,444,038 252,967,146 2,500,000 2,151,713 78,435,101 -
Prize % 51.22% 71.46% 52.00% 70.16% 80.07% -
Prizes $ 44,275,293 180,773,284 1,300,000 1,509,592 62,800,027 133,507 (5,227,217) $ 285,564,486
Retailer Commissions, Scratch and PullTab Ticket Costs Changes in these cost categories generally reflect and are related to the corresponding change in sales. Draw Game Contractor Fee The Lottery contracts with INTRALOT as the draw game vendor. INTRALOT provides the Lottery with critical hardware and software, network communications, and support personnel.
26
Management’s Discussion and Analysis // June 30, 2025 and 2024 OUTLOOK FOR THE FISCAL YEAR ENDED JUNE 30, 2026 The Idaho Lottery completed its 36th year by returning the third largest dividend from the third highest sales in its history. For the third consecutive year, the Idaho Lottery crested the $400 million mark in sales. This was all done with only a single $1 billion jackpot run from either Powerball or Mega Millions during the year. The absence of significant jackpot runs on Powerball, Idaho’s most popular game, when compared to FY24, led to significant decreases in overall sales. This coupled with a significant game change to Mega Millions in April 2025, where the price leapt from $2/play to $5/play, deeply impacted the draw games performance in FY25 compared to the previous year. The Idaho Lottery is cautiously optimistic that FY25 will be a “right-sizing” of the marketplace after the jackpot boom of FY24 and the large growth in the immediate post-COVID era. This would provide FY25 with the opportunity to serve as a new benchmark level for sales performance for FY26 and the years ahead. While the price increase for Mega Millions shows signs of negatively impacting sales at lower jackpot levels, this could stabilize with a significant jackpot run on the game. Using FY25 as the standard bearer, even one significantly sized jackpot run for either big jackpot game should produce a significant boost for the year and put the Lottery on the path to meet or exceed current expectations. Idaho continues to enjoy a very robust and growing economy, one of the strongest in the nation. As population growth continues to rise and development continues to surge, market conditions are favorable for increased, responsible growth and management of the lottery game portfolio. As the focus shifts to the Scratch and the InstaPlay product lines, the Idaho Lottery anticipates an overall upward trend in sales over FY25 with dependable, reliable, steady growth across all games. Conservatively, this should lead to a 1.5% increase in sales with a commensurate increase to the annual dividend. Lottery funding is now “first-in” for contributions to both the Department of Education and the Permanent Building Fund. A successful FY26 will deliver benefits for those who count on the Lottery the most: Idaho Public Schools and the State’s permanent facilities. Contacting the Idaho Lottery This financial reporting is designed to provide a general overview of the Idaho Lottery’s finances and to demonstrate accountability for money earned by the Idaho Lottery. If you have questions about this report or need additional financial information, contact Ben Klotthor, Chief Financial Officer, Idaho Lottery, P.O. Box 6537, Boise, ID 83707-6537, or call 208.334.2600.
27
Financial Statements // Statements of Net Position // June 30, 2025 and 2024 Assets and Deferred Outflows of Resources Current Assets Cash and cash equivalents Receivables Other Total current assets Non-Current Assets Deposits with MUSL Capital assets Right-to-use lease asset, net Other post employment benefits asset Total non-current assets Deferred Outflows of Resources Deferred outflows - pensions
2025 $ 81,678,099 3,987,599 133,343 85,799,041
2024 $ 90,090,354 1,783,819 356,033 92,230,206
2,814,508 267,450 1,294,269
2,624,051 355,390 1,506,956
302,680 4,678,907
271,415 4,757,812
927,176 $ 91,405,124
1,404,329 $ 98,392,347
Liabilities, Deferred Inflows of Resources, and Net Position Current Liabilities Accounts payable and accrued expenses Dividend payable Due to MUSL Prizes payable Lease liability, current portion Total current liabilities
2025 $ 2,151,815 75,000,000 41,055 8,031,668 440,000 85,664,538
Long-Term Liabilities Lease liability, long-term portion Other post employment benefits liability Net pension Total long-term liabilities Total liabilities
812,444 34,841 2,366,615 3,213,900 88,878,438
1,042,091 16,654 2,703,646 3,762,391 97,372,245
138,190
-
309,275 2,079,221 2,388,496 $ 91,405,124
407,688 612,414 1,020,102 $ 98,392,347
Deferred Inflows of Resources Deferred in-flows pensions Net Position Net investment in capital assets Unrestricted Total net position
$
2024 2,032,682 84,000,000 265,334 6,899,271 412,567 93,609,854
See Notes to Financial Statements 28
Financial Statements // June 30, 2025 and 2024 Statements of Revenues, Expenses, and Changes in Net Position Operating Revenues Scratch ticket sales Draw ticket sales PullTab ticket sales TouchTab ticket sales Raffle sales Data line charges Other Operating Expenses Prizes, net of unclaimed prizes Retailer commissions Gaming system services Scratch tickets PullTab/TouchTab tickets Advertising Salaries and benefits Depreciation Amortization Telephone and data line costs Professional services Office and equipment Shipping costs Supplies Tribe compact Other
Total operating revenues
Total operating expenses Operating Income Nonoperating Revenues (Expenses) Gain on disposal of capital assets Interest income on funds held at the State Interest expense Total nonoperating revenues Income Before Transfers Transfers State Permanent Building Fund State Public Schools Building Fund State general fund- interest earnings Total transfers Change in Net Position Total Net Position, Beginning of Year Total Net Position, End of Year
See Notes to Financial Statements 29
2025 $ 246,919,093 65,839,091 3,024,205 81,440,146 4,500,000 660,688 127,226 402,510,449
2024 $ 242,739,898 92,253,671 2,538,043 79,715,027 4,500,000 661,938 53,390 422,461,967
272,890,667 23,351,722 9,005,027 2,474,110 5,189,648 5,230,494 4,899,832 110,505 421,322 59,740 397,663 265,923 886,646 84,502 186,589 654,111 326,108,501 76,401,948
286,162,989 24,709,816 9,500,852 2,666,397 5,010,368 5,013,594 4,480,309 101,314 442,296 48,213 71,597 74,218 835,464 77,381 216,358 535,516 339,946,682 82,515,285
14,650 1,855,886 (48,204) 1,822,332 78,224,280
26,250 2,153,131 (46,507) 2,132,874 84,648,159
(28,125,000) (46,875,000) (1,855,886) (76,855,886)
(31,500,000) (52,500,000) (2,153,131) (86,153,131)
1,368,394 1,020,102 2,388,496
(1,504,972) 2,525,074 $ 1,020,102
$
Financial Statements // June 30, 2025 and 2024 Statements of Cash Flows Operating Activities Ticket sales Prizes paid to winners Commissions and payment to retailers Paid to vendors for goods and services Paid to vendors for promotions Paid to employees for service Net Cash from Operating Activities Noncapital Financing Activities Transfers to State Permanent Building Fund Transfers to State Public Schools Building Fund Transfers to Bond Equalization Fund Transfers to State General Fund - interest earnings Net Cash used for Noncapital Financing Activities Capital and Related Financing Activities Purchase of capital assets Proceeds from sale of capital assets Principal paid on leases Interest paid on long-term debt Net Cash used for Capital and Related Financing Activities Investing Activities Interest income Change in deposit with MUSL Net Cash from Investing Activities Net Change in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year Reconciliation of Operating Income to Net Cash from Operating Activities Operating income Adjustment to reconcile operating income to net cash from operating activities Depreciation Amortization Other post employment benefit adjustment Pension expense adjustment Changes in assets and liabilities Receivables Other assets Accounts payable and accrued expenses Due to MUSL Prizes payable Net Cash from Operating Activities Supplemental Disclosure for Cash Flow Information
2025 $ 400,306,669 (271,982,549) (23,351,722) (18,970,662) (5,230,494) (4,526,072) 76,245,170
2024 $ 423,093,974 (285,511,423) (24,709,816) (18,772,350) (5,013,594) (4,094,881) 84,991,910
(31,500,000) (52,500,000) (1,855,886) (85,855,886)
(30,750,000) (30,750,000) (20,500,000) (2,153,131) (84,153,131)
(91,453) 105,869 (433,180) (48,204) (466,968)
(245,533) 26,250 (428,203) (46,507) (693,993)
1,855,886 (190,457) 1,665,429 (8,412,255) 90,090,354 $ 81,678,099
$
2,153,131 43,365 2,196,496 2,341,282 87,749,072 90,090,354
$ 76,401,948
$
82,515,285
110,505 421,322 (13,078) 278,312
101,314 442,296 10,886 424,773
(2,203,780) 222,690 119,133 (224,279) 1,132,397 $ 76,245,170
632,007 (75,693) 289,476 71,486 580,080 84,991,910
$
See Notes to Financial Statements 30
Notes to the Financial Statements NOTE 1– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Authorizing Legislation The Idaho Lottery (the Lottery), an agency of the State of Idaho (the State), was established in November 1988 with the enactment of Title 67, Chapter 74 of the Idaho Code (the Act). The purpose of the Act is to establish a lottery to generate revenue for the State. Revenues generated by the Lottery, after allowances for prizes and expenses, are distributed to the State Permanent Building and Public School Building Funds. The financial statements of the Idaho Lottery are intended to present the financial position, the changes in financial position, and the cash flows attributable to the Lottery. They do not purport to, and do not present fairly the financial position of the State of Idaho (of which the Idaho Lottery is a self-governing agency) as of June 30, 2025 and 2024, and the changes in its financial position for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Dividends Dividends are recorded on the date they are declared, in June of each year, by the Idaho Lottery Commission.
Basis of Presentation The Lottery is accounted for and reported as a proprietary-type enterprise fund of the State.
Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position includes a separate section for deferred outflows of resources. This separate financial statement element, deferred outflow of resources, represents a consumption of net asset that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. The Lottery has one item that qualifies for reporting in this category: the employer pension obligations.
Basis of Accounting The financial statements are prepared on the accrual basis of accounting.
The pension obligations results from changes in the assumptions or other inputs in the actuarial calculation of the Lottery’s net pension liability.
Multi-State Lottery Association State statutes authorize the Lottery to participate in the Multi-State Lottery Association (MUSL). MUSL is a nonprofit, government benefit association that administers low odds draw games with other participant state lotteries. The Lottery contributes to the related prize pools based on weekly draw ticket sales. MUSL holds daily drawings for prize amounts determined by ticket sales. MUSL holds semiweekly drawings for prize amounts determined by ticket sales. Cash and Equivalents Cash and equivalents include liquid investments with original maturities of three months or less. The Lottery’s excess funds are held in the State of Idaho’s investment pool. Funds held in the pool are generally available to the Lottery within 90 days. Revenue Recognition Lottery tickets are sold to the public by contract retailers. Revenue from the sale of draw tickets is recognized at the time of the draw. Revenue from the sale of scratch tickets is recognized when retailers “settle” instant ticket packs. “Settling” occurs either after the retailer sells the scratch tickets to players, or upon delivery of the pack. The timing is determined by retailer policy but settling at the time the pack goes on sale is encouraged. Accounts Receivable The Lottery provides credit in the normal course of business to its customers and performs a thorough credit evaluation of each customer before approving a license to sell lottery products. The Lottery sweeps accounts receivables directly from its customers’ accounts weekly and will place customers’ accounts on hold if there are insufficient funds after two weeks. Since the Lottery identifies bad accounts quickly, the credit losses, when realized, have been within the range of the Lottery’s expectations and, historically, have not been significant. Consequently, no allowance for doubtful accounts has been established. Other Assets Other assets are comprised of prepaid expenses and ticket inventory. Ticket inventory consists of Scratch tickets which are recorded at a fixed cost related to ticket designs. The fixed costs of the scratch tickets are amortized over the estimated total sales of the game, with any remaining unamortized amount being expensed to operations at the end of the game. Deposits with MUSL Two percent of the payments to MUSL for multi-state draw games are accumulated in a deposit account with MUSL until the account balance has reached a level established by the MUSL Board. Capital Assets Property, equipment and software are stated at cost. Depreciation/amortization is computed using the straightline method over the estimated useful life ranging from three to five years. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the results of operations in the period of disposal. Leases As a lessee, the Lottery recognizes a lease liability and a right to use lease asset at the commencement of the lease term, unless the lease is a short-term lease, or it transfers ownership of the underlying asset. The lease liability is measured at the present value of payments expected to be made during the lease term (less any lease incentives received). The lease asset is measured at the amount of the initial measurement of the lease liability, plus any payments made to the lessor at or before the commencement of the lease term and certain direct costs.
31
the employee’s retirement account with the State. Accumulated benefits for compensated absences are based on the period of service with the State and are accrued at current salary rates. Accordingly, the Lottery assumes the liability for benefits accumulated for employees who transfer to the Lottery from other State agencies, while the Lottery will be relieved of liability upon the transfer of an employee to another State agency.
Compensated Absences Employees earn the right to be compensated during absences for vacation and illness. Within limits established by law, unused vacation benefits are paid to employees upon separation from State service and are the responsibility of the State entity employing the individual at the time of their separation from State service. Accumulated unused sick leave is forfeit upon separation, except by retirement as provided in Titel 67, Chapter 53 of the Idaho Code. Upon retirement, the lesser of one half of the accumulated sick hours or the maximum amount allowed by Idaho Code will be transferred from the sick leave account to
In addition to liabilities, the statement of financial position includes a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net asset that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The Lottery has one item that qualifies for reporting in this category: the employer pension obligation. The employer pension obligation results from the differences between the expected and actual experience and the net difference between projected and actual earnings on pension plan investments derived from the actuarial calculation of the Lottery’s net pension liability. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Pensions For purposes of measuring the net pension liability and pension expense, information about the fiduciary net position of the Public Employee Retirement System of Idaho Base Plan (Base Plan) and additions to/ deductions from the Base Plan’s fiduciary net position have been determined on the same basis as they are reported by the Base Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Commissions Retailers receive a commission of 5% on ticket sales. Additional discretionary commissions of up to 1% may be awarded to retailers and as a result, commission expense will be closer to six percent of revenue. In addition, retailers selling a winning draw or scratch ticket with a prize amount of $1,000 or greater receive a selling bonus of 10% of the prize amount, up to a predetermined limit. Prizes In accordance with the Act, at least 45% of Lottery revenues must be returned to players in the form of prizes. Scratch™ Games Scratch - Prize expense for scratch games is recognized as ticket packs are settled by retailers based on a predetermined prize structure for each game. InstaPlay – Idaho InstaPlay Games were launched in October of 2014. They are instant play-style games generated through the Lottery terminal. Every InstaPlay Game ticket is generated at the time of purchase with a set of numbers/symbols on it. Players simply match their play numbers/symbols to see if they won. There are no drawings to wait for. Winning tickets are validated through the Lottery terminal just like any other Idaho Lottery game. Average payout for InstaPlay games is between 70-72%. Draw Games: Powerball – The Powerball game is sold in forty-five states along with the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Prize expense represents 50% of revenues recognized for the game. Prizes are paid over a twenty-nine year annuity (thirty payments) or as a single cash payment. Mega Millions – The Mega Millions game is sold in forty-five states along with the District of Columbia, and the U.S. Virgin Islands. Sales began in Idaho on January of 2011 and prize expense represents 50%-51% of revenues recognized for the game. Prizes are paid over a twenty-nine-year annuity (thirty payments) or as a single cash payment. Lucky for Life - Lucky for Life launched in Idaho in January, 2015 along with 15 other US jurisdictions, and offers an actual FOR LIFE prize as its jackpot prize. The game has since grown to 23 US lotteries and continues to be a popular option in Idaho. The prize expense is budgeted at 59.4% of game revenues, but are adjusted in the financial statements to reflect the actual prize expense. Raffle – Idaho’s Million Dollar Raffle is a game developed by the Idaho Lottery and played only in Idaho. The first version of the Million Dollar Raffle launched on November 11, 2007 and sales end when all available tickets are sold out or when an established draw date commences. There is only one draw annually. Prize expense represents 52% of revenues recognized for the game. The one jackpot prize is paid out as a single cash payment.
Notes to the Financial Statements Idaho Pick 3 – Sales of Idaho Pick 3 began in June 2000. Prize expense is budgeted at 50% of game revenues but are adjusted in the financial statements to reflect the actual prize expense for the reporting period. Prizes are paid out as single cash payments. Idaho Pick 4 – Pick 4 is an Idaho only game launched in January 2021. Prize expense is budgeted at 50% of game revenues but are adjusted in the financial statements to reflect the actual prize expense for the reporting period. Prizes are paid out as single cash payments Weekly Grand – Weekly Grand is an Idaho only game launched in August 2011. Weekly Grand has proven to be a popular replacement to Double Play Daily™. Players can win $1,000 a week for a year, with the Idaho Lottery paying all of the required withheld taxes. The game pays out on Match 5 ($1,000/week for a year), Match 4 ($200), Match 3 ($25), and Match 2 (free ticket) prize levels, but also offers a second chance draw each month for $100 per week for a year. Prize expense is budgeted at 58.5% of game revenues, but are adjusted in the financial statements to reflect the actual prize expense for the reporting period. Due to the lack of notable growth and tepid interest in the game, it was ended on June 22, 2024. Lotto America – Lotto America is a multi-state game available to play in 13 jurisdictions. Lotto America was launched in November 2017 to replace Hot Lotto and takes its name from the original Lotto America which was offered from 1988 to 1992. Prize expense represents 50% of revenues recognized for the game. Idaho Cash – Idaho Cash is an Idaho only game launched in February 2017. Prize expense is budgeted at 54% of game revenues but are adjusted in the financial statements to reflect the actual prize expense for the reporting period. Prizes are paid out as single cash payments. 5 Star Draw – 5 Star Draw is an Idaho only game launched in October 2019. Prize expense is budgeted at 68% of game revenues but are adjusted in the financial statements to reflect the actual prize expense for the reporting period. Prizes are paid out as single cash payments. Due to the lack of notable growth and a competing price point with the Mega Millions update, the game was ended on April 4, 2025. 2by2 – 2by2 launched in Idaho in April 2021 joining four other US jurisdictions, Kansas, North Dakota, Nebraska and Wyoming. The prize expense is budgeted at 51% of game revenues but are adjusted in the financial statements to reflect the actual prize expense. Due to the game not meeting sales expectations, it was ended on August 26, 2022. PullTab Games PullTabs – PullTab tickets are traditional paper, break-open style tickets sold in age-controlled, social environments. Prize expense for PullTab games range from 69-71%. TouchTabs – TouchTab tickets are dispensed via a touchscreen monitor for plays to open windows electronically to reveal winning and non-winning combinations. Prize expense for TouchTab games range from 77-82%. Unclaimed Prizes Prizes may be claimed for a period of 180 days after the drawing for draw games or 180 days from the declaration of the end of game for scratch games. Unclaimed prizes are offset against that fiscal year’s prize expense. Budget The appropriation for administrative costs is limited to 15% of revenue. Modification of the administrative appropriation must be approved by the State Division of Financial Management. In addition, the Lottery prepares and monitors an operating budget. The budget does not meet the definition of a legally adopted budget for financial reporting purposes. Accordingly, no budget is presented within the financial statements. Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and reported revenues and expenses. Management considers all available information related to estimates up to the date of the report. Significant estimates used in preparing these financial statements include those assumed in determining the prizes payable and interest income from the funds held at the state. It is at least reasonably possible that the significant estimates used will change within the next year. Adoption of New Standard For fiscal year 2025, the Idaho Lottery adopted GASB Statement 101, Compensated Absences. The provisions of this standard modernize the types of leave that are considered compensated absence and provide guidance for a consistent recognition and measurement of the compensated absence liability. The implementation of this standard did not have a significant effect on the Lottery’s financial statements. NOTE 2 – CASH AND EQUIVALENTS Cash and cash equivalents consisted of the following at June 30, 2025 and 2024. 2025 Cash in banks $ 254,141 Investments in the State of Idaho’s General Fund 81,423,958 Investment Pool, at cost, which apporoximates fair value
Total cash and equivalents
$ 81,678,099
$
2024 262,038 89,828,316
Code, Section 67-1210 and 67-1210A, all idle cash deposited with the State Treasurer is invested in a variety of securities. The Treasurer’s Pooled Idle Fund is an unrated internal investment pool stated at amortized cost. The Lottery is an involuntary member of this investment pool, and the Lottery receives no interest or investment income on its cash and cash equivalents. Further disclosure of the State’s investment pool is located in the State of Idaho’s Comprehensive Annual Financial Report. The cash in banks is invested in highly rated financial institutions and may, at times, exceed FDIC insurance limits. As of June 30, 2025 and 2024, $0 and $0, of the Lottery’s deposits at financial institutions were uninsured or uncollateralized, respectively. Fair Value The Lottery categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on valuation inputs used to measure fair value of the asset. Level 1 inputs are quoted prices in the active markets for identical assets. Level 2 inputs are significant other observable inputs. The Lottery did not hold any investments at fair value at June 30, 2025. The State’s Investment Pool is required to report its investments at fair value because the weighted average maturity of the investments is greater than 90 days and thus, the Lottery is required to report its deposits at fair value. However, the Lottery has reported these deposits at cost plus accrued interest which approximates fair value. NOTE 3 – CAPITAL ASSETS Capital asset activity for the years ended June 30, 2025 and 2024, was as follows:
July 1, 2024 Depreciable capital assets Computer equipment Office furniture and equipment Vehicles Leasehold improvements Total depreciable capital assets Less accumulated depreciation Computer equipment Office furniture and equipment Vehicles Leasehold improvements Total accumulated depreciation Property and equipment, net
Depreciable capital assets Computer equipment Office furniture and equipment
Additions
Retirements
June 30, 2025
$ 524,513 750,725 327,962 263,646 1,866,846
$
20,195 18,119 53,139 91,453
(131,691) (131,691)
(404,435) (667,497) (177,550) (261,974) (1,511,456) $ 355,390
(42,052) (24,724) (42,058) (1,671) (110,505) $ (19,052)
62,803 62,803 $ (68,888)
(446,487) (692,221) (156,805) (263,645) (1,559,158) $ 267,450
July 1, 2023
Additions
Retirements
June 30, 2024
$
$
$
444,566 687,190
$
79,947 63,535
$
-
544,708 768,844 249,410 263,646 1,826,608
524,513 750,725
Vehicles
314,456
102,051
(88,545)
327,962
Leasehold improvements
263,646
-
-
263,646
Total depreciable capital assets
1,709,858
245,533
(88,545)
1,866,846
Computer equipment
(369,103)
(35,332)
-
(404,435)
Office furniture and equipment
(645,689)
(21,808)
-
(667,497)
Vehicles
(228,619)
(37,476)
88,545
(177,550)
Leasehold improvements
(255,275)
(6,698)
-
(261,974)
Less accumulated depreciation
Total accumulated depreciation
(1,498,686)
Property and equipment, net
$
211,172
(101,314) $
144,219
88,545 $
-
(1,511,456) $
355,390
Depreciation expense for the years ended June 30, 2025 and 2024, was $110,505 and $101,314, respectively.
$ 90,090,354
The Lottery is required to keep excess cash on deposit in the State of Idaho’s General Fund. The State Treasurer’s Office acts as the State’s bank, receiving and disbursing all monies. In accordance with Idaho
32
Notes to the Financial Statements NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following at June 30, 2025 and 2024:
Trade accounts payable Deposits Held Personnel costs payable Accrued compensated absences Deferred draw sales Accounts payable and accrued expenses
$
2025 935,759 2,250 308,971 264,839 639,996 $2,151,815
2024 919,255 257,440 207,844 648,143 $2,032,682
$
NOTE 5 – COMPENSATED ABSENCE Compensated absence activity for the years ended June 30, 2025 and 2024, was as follows:
Compensated Absences
Balance July 1, 2024
Change*
Balance June 30, 2025
$
Compensated Absences
207,843
56,996
$
Balance July 1, 2023
Change*
Balance June 30, 2024
$
(26,312)
$
234,156
Due Within One Year
264,839
$
$
-
NOTE 6 - LEASES The Lottery entered into various lease agreements for vehicles for the Lottery Sales Representatives. The leasing agreements have varying interest rates between 5.00% - 9.09%. Payments on the vehicle lease agreements range from $2,344/year - $22,729/year and mature during fiscal year 2024 through fiscal year 2029. The Lottery entered into a lease agreement for a copier in April 2025. The terms of the lease agreement call for annual payments of $40,956, for both principal and interest, with an annual interest rate of 7.50%. The terms of the lease agreement end in July of 2030. The Lottery entered into a lease agreement for jackpot display signs in May 2024. The terms of the lease agreement call for annual payments of $111,798, for both principal and interest, with an annual interest rate of 6.59%. The terms of the lease agreement end in May of 2028. In November 2016, the Lottery entered into a lease agreement for the use of office space in Boise, Idaho. A right-to-use asset in the amount of $1,720,334 was recognized as of June 30, 2025 and 2024, with an annual interest rate of 6.13%. Annual payments for both principal and interest are approximately $406,802. The schedule on the next page summarizes the changes in right of use assets and the related accumulated amortization for the years ended June 30, 2025 and 2024.
Right-to-use lease asset
July 1, 2024
Additions
Retirements
June 30, 2025
Vehicles Copiers Office space Jackpot Displays
$
53,681 177,285 230,966
$
$
$
Additions
Retirements
June 30, 2025
$
$
Accumulated amortization
July 1, 2024
Vehicles Copiers Office space Jackpot Displays
$
Total right-to-use asset, net
33
102,614 120,300 1,720,334 494,006 $ 2,437,254
(32,344) (95,767) (690,389) (111,798) $ (930,298)
$
(36,415) (8,442) (264,667) (111,798) $ (421,322)
$
(120,000) (120,300)
97,969 97,969
July 1, 2023
Additions
Retirements
June 30, 2024
Vehicles Copiers Office space Jackpot Displays
$
74,663 494,006 568,669
$
$
108,932 120,300 1,720,334 $ 1,949,566
$
(80,981) (80,981)
102,614 120,300 1,720,334 494,006 $ 2,437,254
Accumulated amortization
July 1, 2023
Additions
Retirements
June 30, 2024
Vehicles Copiers Office space Jackpot Displays
$
$ (34,263) (31,567) (264,667) (111,798) $ (442,295)
$
$
(56,812) (64,200) (425,722) $ (546,734)
$
58,731 58,731
Total right-to-use asset, net
(32,344) (95,767) (690,389) (111,798) $ (930,298) $ 1,506,956
130,229 Due Within One Year
207,844
Right-to-use lease asset
156,295 177,285 1,720,334 494,006 $ 2,547,920
(68,759) (6,240) (955,056) (223,596) $ (1,253,651) $ 1,294,269
The schedule below is the lease liability: Years Ending June 30,
2026 2027 2028 2029 2030
Principal
Interest
Total
440,440 467,394 266,158 39,112 39,340
73,978 44,691 16,995 4,479 1,616
514,418 512,085 283,153 43,591 40,956
141,759
$ 1,394,203
$ 1,252,444
$
NOTE 7 - PENSION PLAN Plan Description - the Lottery contributes to the Base Plan which is a cost-sharing multiple-employer defined benefit pension plan administered by Public Employee Retirement System of Idaho (PERSI or System) that covers substantially all employees of the State of Idaho, its agencies and various participating political subdivisions. The cost to administer the plan is financed through the contributions and investment earnings of the plan. PERSI issues a publicly available financial report that includes financial statements and the required supplementary information for PERSI. That report may be obtained on the PERSI website at www. persi.idaho.gov. Pension Benefits - The Base Plan provides retirement, disability, and death and survivor benefits of eligible members or beneficiaries. Benefits are based on members’ years of service, age, and highest average salary. Members become fully vested in their retirement benefits with five years of credited service (5 months for elected or appointed officials). Members are eligible for retirement benefits upon attainment of the ages specified for their employment classification. The annual service retirement allowance for each month of credited service is 2.0%. The benefit payments for the Base Plan are calculated using a benefit formula adopted by the Idaho Legislature. The Base Plan is required to provide a 1% minimum cost of living increase per year provided the Consumer Price Index increases 1% or more. The PERSI Board has the authority to provide higher cost of living increases to a maximum of the Consumer Price Index movement or 6%, whichever is less; however, any amount above the 1% minimum is subject to review by the Idaho Legislature. Member and Employer Contributions- Member and employer contributions paid to the Base Plan are set by statute and are established as a percent of covered compensation. Contribution rates are determined by the PERSI Board within limitations, as defined by state law. The Board may make periodic changes to employer and employee contribution rates (expressed as percentages of annual covered payroll) that are adequate to sufficient assets to pay benefits when due. The contribution rates for employees are set by statute at 60% of the employer rate for general employees. As of June 30, 2025 and 2024, it was 7.18% and 6.71% for general employees, respectively. The employer contribution rate as a percent of covered payroll is set by the Retirement Board and was 11.96% and 11.18% for June 30, 2025 and 2024, respectively. The Lottery’s contributions were $385,082 and $346,637, for the years ended June 30, 2025 and 2024, respectively. Pension Liability (Asset), Pension Expense (Expense Offset), and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2025 and 2024, the Lottery reported a liability for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2024, and 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The Lottery’s proportion of the net pension liability was based on the Lottery’s share of contributions in the Base Plan pension plan relative to the total contributions of all participating PERSI Base Plan employers. At June 30, 2024, the Lottery’s proportion was
Notes to the Financial Statements .06326759 percent. At June 30, 2023, the Lottery’s proportion was .06774918 percent, an increase of the 2022 proportion which was 0.06110666 percent. For the years ended June 30, 2025 and 2024, the Lottery recognized pension expense of $278,312 and $424,773, respectively. At June 30, 2025 and 2024, the Lottery reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of June 30, 2024 Resources Resources
Differences between expected and actual experience Changes in assumptions or other inputs Change in proportionate share Net difference between projected and actual investment earnings on pension plan investments Lottery contributions subsequent to measurement date
$
$
376,789 93,753 71,552 385,082 927,176
$
$
95,232 42,958 138,190
$385,082 was reported as deferred outflows of resources related to pensions resulting from employer contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ending June 30, 2026.
Deferred Outflows of Resources
June 30, 2024 Differences between expected and actual experience Changes in assumptions or other inputs Change in proportionate share Net difference between projected and actual investment earnings on pension plan investments Lottery contributions subsequent to measurement date
$
$
463,427 267,718 72,770 253,777 346,637 1,404,329
Deferred Inflows of Resources $
$
Mortality rates were based on the RP – 2000 combined table for healthy males or females as appropriate with the following offsets: • Set back one year for all general employees and all beneficiaries Economic assumptions were studied in an experience study performed for the period 2015 through 2020. Demographic assumptions, including mortality were studied for the period 2015 through 2020. The Total Pension Liability (Asset) as of June 30, 2024 and 2023, are based on the results of an actuarial valuation date of July 1, 2024 and 2023, respectively. The long-term expected rate of return on pension plan investments was determined using the building block approach and a forward-looking model in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Even though history provides a valuable perspective for setting the investment return assumption, the System relies primarily on an approach which builds upon the latest capital market assumptions. Specifically, the System uses consultants, investment managers and trustees to develop capital market assumptions in analyzing the System’s asset allocation. The assumptions and the System’s formal policy for asset allocation are shown below. The formal asset allocation policy is somewhat more conservative than the current allocation of System’s assets. The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation.
-
The capital market assumptions are:
Cash
0%
-
Large Cap Small/Mid Cap International Equity Emerging Markets Equity Domestic Fixed TIPS Real Estate Private Equity
18% 11% 15% 10% 20% 10% 8% 8%
$346,637 was reported as deferred outflows of resources related to pensions resulting from employer contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2025. The average of the expected remaining service lives of all employees that are provided with pensions through the System (active and inactive employees) determined for measurement periods ending June 30, 2025 was 4.4 years and June 30, 2024 was 4.4 years.
Asset Class
Target Allocation
Long-Term Expected Real Rate of Return 0.00% 4.50% 4.70% 4.50% 4.90% -0.25% -0.30% 3.75% 6.00%
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense (expense offset) as follows:
Years Ended June 30, 2026 2027 2028 2029
$ 113,876 444,761 (90,009) (64,725)
Discount Rate - TThe discount rate used to measure the total pension liability was 6.35%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate. Based on these assumptions, the pension plans’ net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The long-term expected rate of return was determined net of pension plan investment expense but without reduction for pension plan administrative expense.
Actuarial Assumptions - Valuations are based on actuarial assumptions, the benefit formulas, and employee groups. Level percentages of payroll normal costs are determined using the Entry Age Normal Cost Method. Under the Entry Age Normal Cost Method, the actuarial present value of the projected benefits of each individual included in the actuarial valuation is allocated as a level percentage of each year’s earnings of the individual between entry age and assumed exit age. The Base Plan amortizes any unfunded actuarial accrued liability based on a level percentage of payroll. The maximum amortization period for the Base Plan permitted under Section 59-1322, Idaho Code, is 25 years.
Sensitivity of the Employer’s proportionate share of the net pension liability to changes in the discount rate - The following presents the Employer’s proportionate share of the net pension liability calculated using the discount rate 6.35% for 2025 and 2024 as well as what the Employer’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage point higher than the current rate:
The total pension liability in the June 30, 2024 and 2023, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:
June 30, 2025
Inflation
2.30 percent
Employer’s Proportionate share of net
Salary increases including inflation Investment rate of return Cost of Living (COLA) adjustments
3.05 percent 6.35 percent, net of pension plan investment expense 1.00 percent
pension liability
1% Decrease (5.35%)
Current Discount Rate (6.35)%
1% Decrease (7.35%)
$4,497,307
$2,366,615
$ 626,384
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Notes to the Financial Statements June 30, 2024
1% Decrease (5.35%)
Current Discount Rate (6.35)%
1% Decrease (7.35%)
$4,862,620
$2,703,646
$ 939,091
Employer’s Proportionate share of net pension liability
Pension plan fiduciary net position - Detailed information about the pension plan’s fiduciary net position is available in the separately issued PERSI financial report. PERSI issues a publicly available financial report that includes financial statements and the required supplementary information for PERSI. That report may be obtained on the PERSI website at www.persi.idaho.gov. Payables to the pension plan At June 30, 2025 and 2024, the Lottery reported no payables to the defined benefit pension plan for legally required employer contributions and for legally required employee contributions which had been withheld from employee wages but not yet remitted to PERSI.
NOTE 10 – CONTINGENCIES AND COMMITMENTS Prize Annuities The Lottery purchases annuity contracts in the name of individual jackpot prize winners. Although the annuity contracts are in the name of the individual winners, the Lottery retains title to the annuity contracts. The Lottery remains liable for the payment of the guaranteed minimum prizes in the event the insurance companies issuing the annuity contracts default. The guaranteed minimum prize payments for which annuity contracts have been purchased are due in varying amounts through January 2042. The specified payments are $7,328,000 and $8,070,000, for the years ended June 30, 2025 and 2024, respectively.
Required Supplementary Information PERSI- Base Plan Last 10 - Fiscal Years*
NOTE 8 – OTHER POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS
Measurement Period of July 1,
Employer’s portion of the net pension liability (asset)
Employer’s proportionate share of the net pension liability (asset)
Employer’s coveredemployee payroll
Employer’s proportionate share of the net pension liability (asset) as a percentage of it’s coveredemployee payroll
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
0.0632676% 0.0677492% 0.0611067% 0.0613614% 0.0638148% 0.0684102% 0.0688296% 0.0691772% 0.0670535% 0.0672688%
$2,366,615 $2,703,646 $2,406,843 $ ( 48,462) $ 1,481,864 $ 780,883 $ 1,015,250 $ 1,087,348 $ 1,359,277 $ 885,821
$ 3,039,694 $ 2,874,141 $ 2,224,989 $ 2,202,110 $ 2,199,057 $ 2,252,306 $ 2,217,591 $ 2,064,242 $ 1,900,483 $ 1,819,119
77.86% 94.07% 108.17% -2.20% 67.39% 34.67% 47.72% 52.68% 71.52% 48.70%
The Lottery contributes to the Retiree Healthcare, Long-Term Disability, Long-Term Disability Income (Health and Disability) Sick Leave Insurance Reserve Fund (Sick Leave) other postemployment benefits (OPEB) plans. The Retiree Healthcare and Long-Term Disability plans are single-employer defined benefit plans administered by the Idaho Department of Administration in accordance with Idaho Code Section 67-5761. The plans are funded on a pay-as-you-go basis; the State does not set aside any assets in a trust as defined by GASB Statement 75, paragraph 4. The State does not issue a publicly available financial report. The Sick Leave plan is a cost sharing, multiple-employer defined benefit plan administered by the PERSI in accordance with Idaho Code Sections 67-5333, 33-1216, 59-1365, and 331228, and covers substantially all employees of the State of Idaho, its agencies and various participating political subdivisions. Plan assets are set aside in a trust, as defined by GASB Statement 75, paragraph 4, and comingled with assets from other plans for investment purposes. The PERSI issues a publicly available financial report that includes financial statements and the required supplementary information for the PERSI. At June 30, 2025 and 2024, the Lottery has recorded an OPEB asset related to Sick Leave for $302,680 and $271,415, respectively. At June 30, 2025 and 2024, the Lottery has recorded an OPEB liability related to Health and Disability for $34,841 and $16,654, respectively. There were no deferred outflows or inflows of resources related to the OPEB asset and liability as of June 30, 2025 and 2024. Details of the plans can be found in the Comprehensive Annual Report of the State of Idaho, which may be obtained as follows: Office of the Idaho State Controller 700 W State Street, 4th Floor Boise, ID 83702 P.O. Box 83720 Boise, ID 83720-0011 www.sco.idaho.gov
NOTE 9 – CONTRACT WITH INTRALOT Like most U.S. lotteries, the Idaho Lottery contracts with a gaming contractor to provide the Lottery with critical hardware and software, network communications, and technical support personnel necessary to efficiently operate the lottery gaming systems. The Lottery entered into a contract with INTRALOT to provide these services with a contract period of October 1, 2017 to October 1, 2027; with an option for the Lottery to extend the contract for two additional five-year terms. On June 6, 2025, an amendment was agreed to with INTRALOT to exercise the two five-year extensions. This contract includes an all-in price based upon a percentage of sales, which is 2.26% of Total Net Sales for the initial 10-year portion of the contract period. At the beginning of the two five-year extensions the percentage of sales on TouchTab and PullTab games will drop to 1.30%, while all other games will remain at 2.26%. The extension includes an update to the latest back-office gaming system, the added capability of single ticket activation, additional vending machines, the refurbishment of all existing vending machines, and the update and replacement of all retailer terminals and ticket checking devices.
Plan fiduciary net position as a percentage of the total pension liability (asset) 85.54% 83.83% 83.09% 100.36% 88.22% 93.79% 91.69% 90.68% 87.26% 91.38%
PERSI- Base Plan Last 10 - Fiscal Years*
Years Ended June 30,
Statutorily required contribution
Contributions in relation to the statutorily required contribution
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
$385,082 $346,637 $343,948 $ 287,719 $ 273,417 $ 271,321 $ 254,736 $ 244,738 $ 221,998 $ 219,749
$ 385,082 $ 346,637 $ 343,172 $ 265,664 $ 262,932 $ 262,567 $ 255,412 $ 241,269 $ 234,085 $ 215,515
Contribution (deficiency) excess
Employer’s coveredemployee payroll
Contributions as a percentage of the coveredemployee payroll
$ $ $ 776 $ 22,055 $ 10,485 $ 8,754 $ (676) $ 3,469 $ (12,087) $ 4,234
$ 3,178,958 $ 3,039,694 $ 2,874,141 $ 2,224,989 $ 2,202,110 $ 2,199,057 $ 2,252,306 $ 2,127,591 $ 2,064,242 $ 1,900,483
12.11% 11.40% 11.97% 11.94% 12.42% 11.87% 11.31% 11.50% 10.75% 11.56%
*GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10-year trend is compiled, the Lottery will present information for those use for which information is available.
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Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards To the Board of Commissioners Idaho Lottery Boise, Idaho We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Idaho Lottery (the Lottery), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Lottery’s basic financial statements and have issued our report thereon dated November 21, 2025. Reporting on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Lottery’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Lottery’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Lottery’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Lottery’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Boise, Idaho November 21, 2025
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