2004 was the most profitable year for Mifal Hapayis - Israel National Lottery in the past five years. Mifal Hapayis's profit and loss statement for 2004 indicates that its operating profit rose by NIS 76 million, from NIS 493 million in 2003 to NIS 569 million in 2004. Revenue grew by NIS 40 million, from NIS 3.01 billion in 2003 to NIS 3.05 billion in 2004.
Mifal Hapayis chairman and CEO Shimon Katznelson told "Globes" that the substantial increase in Mifal Hapayis's profitability was thanks to streamlining measures undertaken over the past year. These included a new marketing tender, which reduced commissions to marketers; tenders that lowered prices; a cut in the advertising budget; a new launch of the lotto; and a new collective work contract, which saved salary costs. This is Katznelson's first year in his post.
Mifa Hapayis's revenue from six lottery games totaled NIS 3.05 billion in 2004. Lotto had the highest revenue, at NIS 917 million; Hishgad had NIS 860 million; the subscribers' plan had NIS 394 million; Hapayis 777 had NIS 112 million; Chance had NIS 732 million; and Payis 123 had NIS 35 million.
Mifal Hapayis returned 85% of its revenue, NIS 2.6 billion, to the community. NIS 1.9 billion was paid in prize money, and NIS 700 million was invested in community projects throughout Israel. Mifal Hapayis invested NIS 1.5 billion in 2002-05 in building 2,950 classrooms and kindergartens across the country.
Mifal Hapayis's 2005 revenue target is NIS 3.28 billion. Mifal Hapayis failed to meet its 2004 revenue target of NIS 3.4 billion. Katznelson attributed the failure to the 25% tax levied on prizes.
Published by Globes [online], Israel business news - www.globes.co.il - on April 4, 2005