INDIANAPOLIS, IN — The Hoosier Lottery missed its stated revenue goal but still generated record sales under the first year working with a private management company, the Indianapolis Star reports.

The sales record provides roughly $250 million in surplus revenue for the state during the 12-month period that ended in June, a 12% increase over the previous high of $224 million in 2013.

With the strong earnings, Hoosier Lottery commissioners breathed a collected sigh of relief, as they took a significant risk in 2012 when they hired GTECH to manage its lottery on a day-to-day basis.

Because GTECH fell short of its stated goal by $1.6 million, the company must pay the difference to the state. It is operating under a 15-year contract and stands to receive a financial reward should sales exceed its annual estimates.

GTECH’s management of the lottery accounted for total revenue of more than $1 billion in fiscal 2014, up 9% from the previous record set two years ago.

"I'm as encouraged as I was last year," said Bill Zielke, lottery commission chairman of the commissioners. "This contract worked exactly as we intended it to work."

Colin Hadden, GTECH Indiana chief operating officer and general manager, said he's greatly encouraged with the first year's results. "We're delighted, but we'd rather not have to pay the $1.6 million (penalty)," he said. "This is a marathon. It's not a sprint. It's a 15-year deal. ... We believe there is a significant opportunity for the long haul."