Message from the President and CEO

Financial Results

For the 2009-2010 fiscal year, the Corporation posted consolidated revenues of $3.810 billion and total net income of $1.341 billion, representing respective declines of 1.6% and 7.9% as compared to 2008-2009. Having succeeded in maintaining its revenues and net earnings over the past few years, the organization is now feeling the effects of the difficult economic context. In fact, all Loto-Québec sectors were affected, with the exception of the Casino sector, whose revenues were up by 2.2%.

In response to these circumstances, the Corporation implemented a plan to reduce costs by approximately $20 million in the third quarter. This plan allowed the organization to minimize the impact on the Société des loteries vidéo’s revenues of the closing of the hippodromes in Montréal and Aylmer, where 265 video lottery terminals had been in operation. The plan also served to counteract the decline in tourism activity at Mont-Tremblant, where Loto-Québec inaugurated a casino last June 24.

New Lottery

Lotto Max is the third Canada-wide online game to be introduced since the launch of Lotto 6/49 in 1982. The new lottery replaced Super 7, which was retired after 15 years. Created in collaboration with the four other lottery corporations in Canada, Lotto Max is steadily establishing its popularity among consumers, with its sales revenues having surpassed those of Super 7.

Modernization Work at the Casino de Montréal

The Casino de Montréal modernization project began in the fall of 2009. This investment of some $305.7 million spread over a four-year period will see the relocation of administrative offices to two new galleries, the redevelopment of gaming areas, as well as the construction of a single entrance, multifunctional room, and a floor dedicated to restaurant services. The Casino’s doors are remaining open for the duration of this work.

Online Gaming

In January 2010, we submitted a request to the Government to modify the regulatory framework in order to enable us to develop online gaming offerings. This decision was motivated by various reasons, including the significant growth of the online gaming industry over the past several years. In fact, there are now more than 2,000 illegal sites in operation that offer no responsible gaming mechanisms and whose integrity is occasionally questionable. Our mandate will be to direct this existing gaming activity toward a scrupulous, secure site that promotes responsible gaming and that will contribute to minimizing the social costs that are all currently being assumed by the State.

In recognition of the public’s concerns about gambling problems, we would employ all of our expertise in the area of responsible gaming, and we would base our approach on models that have proven themselves elsewhere in the world, such as in Sweden and England. In addition, numerous control and prevention measures will be implemented, including several that would lead the way within the industry.

Responsible Gaming

In 2009, Loto-Québec obtained the highest certification in the area of responsible gaming — the World Lottery Association’s Level 4. This distinction serves to confirm the quality of our programs and our ability to integrate responsible gaming initiatives into our daily operational activities.

Challenges on the Horizon

Proud of its past accomplishments, and with its sights firmly set on the future, Loto-Québec will continue to spare no effort in order to remain an important economic engine for Québec society, while keeping responsible gaming at the top of its priority list.

The Corporation is dedicated to meeting its formidable challenges over the coming years in parallel with maintaining the balance between its commercial vocation and its social responsibility. Indeed, this commitment to balance has been at the heart of management’s priorities since 2003, and it will continue to be, including with respect to its online gaming initiative, which the Corporation will carry through with all the rigour and integrity that it has embodied for the past 40 years.