Board

Message from the Georgia Lottery

– raise as many dollars as responsibly as possible for the educationalprograms we fund. I am exceptionally pleased that the GeorgiaLottery established a new record this fiscal year for profits,contributing more than $691 million to lottery-funded programs.With a nearly $8 million increase over last year, profits for theGeorgia Lottery Corporation have continued to flourish andbenefit the students of Georgia.

Every year, all of the members on the board of directors make asolid commitment to the funding of educational programs in thestate of Georgia. Plain and simple, this is why the Georgia Lotterywas established. As any organization matures, it is the responsibilityof that company to review each area for growth. I am pleasedwith the direction of the corporation and look forward to sustaining

our progress. I would like to thank my associates for their hard workand dedication. We have and will continue to look at ourmarketplace for ways to improve the quality of our games.

In our eighth fiscal year, we were preparing for our future.Demonstrating a strong performance financially is not enough forthe Georgia Lottery Corporation; it is essential that we work hardereveryday so that our efforts continue to make a differencethroughout the state. As Georgia becomes more competitive withnew lotteries around its borders, we will embrace new ways to createand add innovative changes to our games. At the end of the day,the Georgia Lottery will continue to serve as a beacon for successfullotteries everywhere.

Directorsof

Our purpose with the Georgia Lotteryhas been clear since 1993

2 Georgia Lottery Corporation - 2001 Annual Report

Pictured from left to right are:

Richard Robert EnsleyRoscoe Brown

Sylvan M. Byck Jr.Matthew Ware

Barbara M. DooleyRoy Richards Jr.

J. Veronica Biggins, Chairwoman

3

Veronica

The Georgia Lottery transferred an unsurpassed$691 million to education, increasing profits from theprevious year in excess of $8 million and bringing our

total transfer since inception to over $4.56 billion.More than 590,000 HOPE scholarships have been

awarded, and more than 370,000 students haveattended lottery-funded prekindergarten. As we

continue to support the state’s future by funding thesecritical programs, along with capital outlay and

technological upgrades, dollars raised by the GeorgiaLottery are building a better Georgia.

We are pleased with our progress over the past yearand grateful to everyone who contributed to our

achievements. The relationships we maintain with ourplayers and network of retailers remain a vital elementof our core. A special thanks is extended to each andevery Georgia Lottery employee for a dedication andcommitment to excellence beyond compare. Underthe leadership of a newly appointed chairwoman and

with three new members, the Georgia LotteryCorporation’s board of directors continues to serve

diligently and incisively.

The fiscal year ended on a successful note with afuture bright and full of promise. As we work

consistent with our purpose, operating in the spirit ofintegrity, everyone in Georgia can take pride in the

Georgia Lottery Corporation’s groundbreakingcontributions and extraordinary success.

Fiscal year 2001 was anincredible periodfor the GLC.

As the GeorgiaLottery Corporationmarks the end ofeight fiscal years,we continue toexceed expectations.In fulfilling ourpurpose toresponsibly raisedollars for education,we experiencedanother record-breaking year.

Georgia Lottery Corporation - 2001 Annual Report4 5

President’s Letter

Edu

ca

tion

Education inGeorgia was the

ultimate winnerthis year.

The Georgia Lottery Corporation raised itshighest amount for education, transferring$691 million to the state to fund Georgia’s

HOPE Scholarship Program, Georgia’sPrekindergarten Program, and capital

outlay and technology initiatives.Since the Georgia Lottery began in 1993,

more than $4.56 billion have beengenerated for these essential programs.

Georgia Lottery Corporation - 2001 Annual Report

Thanks to the Georgia LotteryCorporation, every child in Georgia

has the opportunity to get a jumpstart inschool, learn in a progressive,

technologically advanced environment,and pursue goals of higher education.

Since inception, 592,400 students havereceived HOPE scholarships, 372,600children have enrolled in lottery-fundedprekindergarten, and over $1.78 billion

have gone to capital outlay andtechnology initiatives. As the Georgia

Lottery Corporation fulfills its legislativemandate to responsibly raise dollars for

education, the students of Georgiaremain the supreme winners.

Georgia Lottery Corporation - 2001 Annual Report6

372,600 Studentsin Pre-KProgram!

8 Georgia Lottery Corporation - 2001 Annual Report 9Georgia Lottery Corporation - 2001 Annual Report

Lottery retailersearned morethan $148,598,000in bonuses, commissions, and incentives.

From county to county,retailers are sharing aninfectious enthusiasm withGeorgia Lottery playersstatewide. Every smile, greeting andhand shake, is another valuable linkbetween the Georgia LotteryCorporation (GLC) and our consumers.What does it mean to be a GeorgiaLottery retailer? Providing excellentcustomer service is what it means. Weare especially pleased that there is aproud peach displayed at every Georgia Lottery outlet throughout ourgreat state. We are even more delighted that in fiscal year 2001, GeorgiaLottery retailers earned more than $148,598,000 in bonuses, commissions,and incentives. Fiscal year 2001 was a terrific year!

Through ourpartnership

with retailers,players are

continuouslyexcited about

Georgia Lottery games.

What does it mean tobe a Georgia Lotteryretailer?

Retailers

Georgia Lottery

WinnersGeorgia is winning everyday withthe Georgia Lottery Corporation. While dollars raisedhelp students win, players are also winning with theexciting games offered. From instant games to onlinefavorites, over $1.14 billion was awarded to players inthe form of prizes during fiscal year 2001.

Two players split Fantasy 5’s record-breaking top prizeof over $1.2 million, and the game produced itslargest single winner, who won a top prize of $891,959.The year’s largest Big Game winner was Sankofa LLC,comprised of airport cabdrivers. They claimed their$49.4 million cash option prize at Georgia Lotteryheadquarters just as songwriter Willie Denson wasclaiming his $1.29 million cash option Lotto Georgiaprize. A joint press conference was held as GeorgiaLottery President and CEO Rebecca Paul presentedthe big checks and sang “Mama Said There’ll Be DaysLike This,” a hit song penned by Mr. Denson. Everydayis a day like this for the many GLC winners. GeorgiaLottery players are thrilled to win and just as excitedthat lottery profits are promoting education acrossthe state.

Players were entertained by old favorites and newlaunches. The introduction of a state-of-the-art draw set andvivid rubber balls brightened the scene for Cash 3, Cash 4, Fantasy 5, LottoGeorgia and The Big Game. Cash 3 sales were paramount at $729,589,000.The addition of a Monday through Saturday midday drawing helped Cash4 sales increase to $111,152,000.

Georgia Lottery Corporation - 2001 Annual Report

2001 was a fun filled period with the Georgia Lottery’s exciting online and instant games.

GLC Instant Ticket

Games

Fantasy 5 enjoyed record top prizes with a matrixexpansion and a boost in sales to $84,851,000.Lotto Georgia sales reached $80,556,000 whileThe Big Game topped $140,516,000. Quick CashKeno sales peaked at $49,218,000. Meanwhile, instantgames continued to dominate. Led by the premiere of Jumbo BucksClassic, instant games scored their highest marks in Georgia Lottery history withsales of $997,925,000.

Georgia Lottery Corporation - 2001 Annual Report10 11

currently employs approximately 250 peoplestatewide and has nine district offices (Atlanta

East, Atlanta West, Augusta, Columbus, Dalton,Gainesville, Macon, Savannah and Thomasville)

in addition to the GLC headquarters indowntown Atlanta.

The GLC team is comprised of dedicated andprofessional men and women who are

committed to maximizing revenues for specificeducation programs in Georgia by providing

entertaining lottery products and qualitycustomer service to our retailers

and players, while maintainingthe integrity of the GLC

and its games.

The GLC is headed by Presidentand Chief Executive Officer

Rebecca Paul. The President isresponsible for developing

long-term marketing strategiesand overseeing the

day-to-day operationsof the corporation.

The Georgia LotteryCorporation

Georgia Lottery Corporation - 2001 Annual Report

The Sales and Marketing Divisionis responsible for coordinating and overseeing all salesand marketing activities (including promotions and research)and retailer administration.

Corporate Affairsincorporates Human Resources and training, advertising and facilitiesmanagement; and handles external communications including board liaison,legislative affairs, public and player information and media relations.

Finance and Information Systemsprovides services related to financial accounting and reporting, cash management,the budget, collections, prize validation and procurement; and maintainsstate-of-the-art computer systems, technology and telecommunications systems.

Legal Affairsprovides legal advice and assistance, drafts policies and directs securityand investigations; and handles internal auditing.

Front Row (left to right):Andy Davis, Senior Vice President of Finance and Information Systems;

Rebecca Paul, President and CEO;Sidney Chambers, Vice President of Sales and Distribution.

Second Row (left to right):Jeannie Lin, Vice President of Advertising;

Cathy Walls, Senior Vice President of Corporate Affairs;Wanda Wilson, Senior Vice President and General Counsel;

Rosemarie Morse, Vice President of Legal Affairs.Third Row (left to right):

Joan Schoubert, Vice President of Financial Management;Marty Goldman, Senior Vice President of Sales and Marketing;

Larry Sipes, Vice President of Information Technology;Daniel Johnson, Vice President of Systems Development.

(Not pictured: Mar-D Greer, Vice President of Security).

12 13

Independent Auditors’ Report

Board of Directors of the Georgia Lottery Corporation:

We have audited the accompanying balance sheets of

the Georgia Lottery Corporation (the “GLC”) as of June

30, 2001 and 2000, and the related statements of revenues,

expenses, and changes in retained earnings, and cash

flows for the years then ended. These financial statements

are the responsibility of the management of the GLC. Our

responsibility is to express an opinion on these financial

statements based on our audits.

We conducted our audit in accordance with auditing

standards generally accepted in the United States of

America. Those standards require that we plan and

perform the audit to obtain reasonable assurance about

whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the

accounting principles used and significant estimates

made by management, as well as evaluating the overall

financial statement presentation. We believe that our

audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in

all material respects, the financial position of the GLC as

of June 30, 2001 and 2000, and the results of its operations

and its cash flows for the years then ended in conformity

with accounting principles generally accepted in the

United States of America.

August 24, 2001

14 Georgia Lottery Corporation - 2001 Annual Report