In Fiscal Year 2007-08, growth in Lottery transfers to the Educational Enhancement Trust Fund began to slow. Current forecasts indicate continued slowing of revenue growth and education transfers due to current economic conditions. To address this challenge, the Lottery launched Powerball, a multi-state jackpot game, and is continuing efforts to expand its retail network and multi-priced online games.

The Lottery's operating expense rate is among the lowest in the nation but its administration costs continue to rise due largely to growth in commission payments. To address this issue, the Lottery has changed its scratch-off ticket vendor payment structure to reduce these costs but should further adjust commissions for higher-priced tickets and change its retailer payment structure. The Lottery has renegotiated the lease for its headquarters but continues to lease excess office space. The Lottery could realize additional efficiencies by evaluating its retailer recruitment process and the department should take steps to improve its marketing evaluation and competitively secure advertising services.