Canadian provincial lottery operator Atlantic Lottery Corporation (ALC) saw revenue drop 11.9% to CAD$635.6m (£375.4m/€442.0m/USD$509.7m) in the year ended 31 March, 2021, as the novel coronavirus (Covid-19) pandemic continued to affect earnings.
ALC chair C. Sean O’Connor said the business – which operates lotteries in New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador – saw revenue hit by the effects of the Covid-19 pandemic for the second straight year.
“Once again, the annual report for Atlantic Lottery must highlight the effects of the Covid-19 pandemic, which heavily impacted the financial results for the year ended March 31, 2021,” he said.
“Like many businesses, we started our fiscal year with shutdowns in the hospitality and horse-racing industry, as well as at some retail locations.”
“Throughout the year, necessary public health measures were brought in to curb localized outbreaks, which continued to affect all aspects of Atlantic Lottery’s operations. The effect of these measures was to reduce overall net income from $395.4 million in 2019-20 to $346.5 million in 2020-21, well below our original pre-pandemic plan.”
Net ticket sales came to $330.8m, which was up 8.5% from 2019-20.
Net video lottery receipts, however, were down 26.4% to $292.8m, due mostly to the impact of restrictions related to the novel coronavirus (Covid-19) pandemic.
Similarly, entertainment center revenue – from Atlantic Lotteries’ Red Shores gaming venues on Prince Edward Island – were down 36.7% to $12.0m.
Looking at revenue by province, Nova Scotia narrowly led the way with $206.4m, down 8.1%. Close behind was New Brunswick, with $203.8m, a decline of 4.5%.
Revenue from Newfoundland and Labrador declined 21.6% to $178.5m, while revenue from Prince Edward Island was down 16.7% to $46.7m.
Atlantic Lotteries then paid direct expenses of $112.0m, down 16.7%. As a result, ALC’s gross profit came to $523.6m.
The business then paid operating and administrative costs of $101.3m, down 8.0%, and capital-related costs of $31.1m, down 6.8%, as well as other expenses of $44.7m, an 8.2% decline.
This led to a net profit of $346.5m, which was 12.4% less than 2019-20’s net profit.
O’Connor said the year saw ALC cut jobs in a restructuring effort, but said this helped the business pursue digital opportunities.
“Unlike some businesses, Atlantic Lottery also executed on a plan for restructuring, which unfortunately resulted in the departure of approximately 10 per cent of our overall workforce,” he said. “This was a difficult but necessary undertaking, which is part of ensuring we remain a world-class, competitive, digital gaming company.
“This strategy also includes increased adoption of our digital products and services. This process, which began prior to the pandemic, has been accelerated by the pandemic as our players demand an ever-growing range of products be available to them digitally.
The company has responded with an improved online experience through alc.ca, a revamped mobile application and the iCasino offering in New Brunswick.”
After the end of the year, Canada successfully legalized single-event sports betting, allowing operators such as Atlantic Lotteries to offer betting on individual sports events, rather than only multiple bets.
In addition, ALC also appointed Patrick Daegle as its permanent chief executive in October. Daegle had already been serving in the role on an interim basis, after Chris Keevill left the organisation to pursue a new job in the private sector in February.