NEWS

Atlantic Lotto spent $2M to promote axed GeoSweep game

09/30/2013 05:01 EDT | Updated 11/29/2013 05:12 EST
The Atlantic Lottery Corporation spent almost $2 million to advertise and promote the  lottery before pulling the plug on the game, documents obtained by CBC News through an access-to-information request show.

 was launched in Atlantic Canada last year. Its introduction to the market was accompanied by a splashy promotional campaign, including TV ads, billboards, and buses covered by the logo.

When the lottery corporation announced its decision to remove the game from the Atlantic Canada market this summer, lottery officials wouldn't say how much all of that cost.

"It’s not our practice to release internal business cases and projections," Atlantic Lotto chief financial officer Patrick  told CBC News in late June.

At the time,  also wouldn’t discuss how bad  sales were in Atlantic Canada.

"I’m not at liberty to disclose specific financial data,"  said.

While those sales figures remain a mystery, the access-to-information response sheds some light on the game’s ad budget.

Between January 2012 and July 2013, the lottery corporation says it paid out $1,978,256 to external suppliers to promote .

Production costs came in at more than $622,000, while media charges were nearly $1.3 million.

4 provinces offered game

Atlantic Lotto steered interview requests to , who was unavailable for comment.

In an e-mailed statement, the corporation defended the spending.

“The marketing expenditure for  was in line with what is invested in any game launch,” spokeswoman Courtney  wrote.

“As all four provinces offered the game; the amount was divided equally among each.”

Those promotional costs are in addition to the $8.7 million Atlantic Lotto  into the U.K.-based firm behind .

The New Brunswick and Prince Edward Island governments each put up $4 million for a stake in the company — , formerly known as . Newfoundland and Labrador and Nova  opted out.

That investment is in the parent company, Atlantic Lottery Corporation has stressed, not the GeoSweep game itself.

GeoSweep is a lottery game not unlike other corporation offerings, albeit with a digital — and geographical — twist.

Instead of picking numbers, players could go online to pick a location on a map of Atlantic Canada — their house, for example, or some other place of significance to them.

There were more than 2.3 million such locations, called Geos, up for grabs in the region. The cost to own a Geo was $7.50 for 30 days, or 25 cents daily.

There was one guaranteed daily prize of $1,000, which was selected from Geos that were actually owned. Neighbouring Geos were eligible to share another $500.

A big prize of $250,000 was also up for grabs every day. That draw, however, included all Geos, whether they were occupied or not.

GeoSweep never paid out that daily $250,000 grand prize in more than a year's worth of draws in Atlantic Canada — mathematically, a near-certain indicator of poor sales.

1st and only investment to date

The investment in Geonomics, the company behind the GeoSweep game, is the first — and, so far, only — by Atlantic Lotto, as the corporation seeks to expand its reach beyond the region.

The corproation contends that flatlining growth and increased competition are forcing it to expand into international and digital realms.

The corporation has kicked the tires on lottery opportunities from Illinois to Albania, and pushed to offer online casino gaming.

Profits from Atlantic Lotto go back to the four provincial governments in Atlantic Canada.

When expenses rise and profits fall, there is less cash sent back to those governments.

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