CHARLOTTE AMALIE — The Virgin Islands Lottery has modernized in recent years, but enforcement has been virtually nonexistent, according to testimony during a Senate Finance Committee hearing Friday.
Executive Director Raymond Williams said with the help of staff, “we have gone from an antiquated and outdated manual draw process to … the industry standard ‘Random Number Generator’ system.”
The lottery also launched a print-on-demand ticket sales eliminating waste and reducing costs — $55,078 since June 30, Williams first told the V.I. Daily News.
“We plan to introduce online ticket sales in the latter part of the second quarter this fiscal year to enhance our traditional ticket sales,” Williams said.
The lottery has set a goal to increase sales by 12 percent “into the future,” and is working to develop new games modeled on those out of the Caribbean and New York that are “frequently played illegally in our territory,” Williams said.
“Research has shown that many members of the community are unaware that playing these foreign lottery games are not only illegal, but also have immense negative impact on the territory,” Williams said.
“Millions of untaxed dollars are leaving the territory and much of those dollars fund various other illegal activity.”
But over the last three years, the lottery has not issued a single citation.
Questioned as to what the department’s enforcement officers do, Williams told Senator Janelle Sarauw that officers deal “with the money transfers and stuff like that,” and “don’t sit on their hands.”
“Your enforcement officers are not fulfilling their job descriptions,” Sarauw said.
“Patience is a virtue, OK?” Williams replied.
Lamarr Jacobs, who was recently hired as the lottery’s director of security and investigations, said officers have been deployed and “you will see some results in short order.”
Senator Marvin Blyden said officers at least need to go out and issue warnings and educate those engaging in illegal gaming, so they can be brought over to the side of legal gaming and “add to our coffers.”
The lottery manages ticket sales and special games like the “Vax to Win” drawing, as well as Video Lottery Terminals in the St. Thomas and St. John district. The V.I. Casino Control Commission regulates casino gaming on St. Croix.
Williams said the Lottery contracted with Gaming Laboratories to audit the Video Lottery Terminal system, which is run by Southland Gaming. It was the first VLT audit since 2013, and all 510 functioning VLTs passed, Williams said.
With current methods in use for more than three decades, Canadian Banknote is studying game play and how prize payments are structured, Williams said.
“If we don’t create customer excitement and enhance our prize structure, we will continue to fall behind the illegal games that are prevalent in the territory.
The Lottery Commission anticipates fiscal year 2022 operating revenue of $21.86 million, comprised of $9.16 million from traditional games, $11.27 million from Southland Gaming, $1.41 million from Caribbean Lottery Services and $21,500 in other income.
Total direct costs are projected at $8.18 million, including prizes, printing and operations. Salaries and benefits total $3.97 million, 5.4 percent less than fiscal year 2021.
Advertising, promotion, professional services and other administrative costs are projected at $3.14 million.
Total operating expenses are projected at $15.29 million, with operating income of $6.57 million.
The Virgin Islands Code requires the lottery to make mandatory transfers to various funds, and those figures are projected to increase in 2022 to $1.9 million for the Educational Initiative Fund, $1.9 million to the Pharmaceutical Assistance Program, $1.27 million to the Government Employees’ Retirement System Retirees Bonus Fund and $337,956 for Horse Racing Improvement Fund.
The Lottery is also budgeting $100,000 for the Office of Veterans Affairs and $228,652 for the General Fund.
After contributions, projected net income is expected to be $914,610.
By SUZANNE CARLSON/The Virgin Islands Daily News