Published: January 14, 2018

Arkansas Scholarship Lottery's revenue is record for a December

The Arkansas Scholarship Lottery's revenue in December reached $44.7 million and exceeded the previous record for the month, set in 2009, the first year of ticket sales.

And the amount raised for college scholarships by the lottery totaled $6.5 million last month -- the largest amount for a December since the lottery raised $6.9 million in 2012.

Lottery Director Bishop Woosley said Friday that the lottery had an excellent month with scratch-off ticket sales in December, with a new $20 game and continued success with $5 and $10 tickets. Scratch-off tickets also are known as instant tickets.

Draw games also were attractive to buyers during the month. The national Powerball and Mega Millions jackpots both grew to around $250 million to $300 million over the course of the month, Arkansas' Natural State Jackpot grew to more than $100,000 late in the month, and "those three combined jackpots had a big impact on sales," Woosley said.

The lottery's scratch-off ticket revenue last month increased by $6.8 million over a year ago to $36.1 million, while the lottery's revenue for draw-game tickets increased by $2.5 million to $8.5 million, the lottery said this week in its monthly report to Gov. Asa Hutchinson and the Legislative Council's lottery oversight subcommittee.

The lottery's other revenue includes fees paid by retailers. The lottery's retailers totaled 1,929 as of Dec. 31, compared with 1,930 a year ago.

Lottery critic Jerry Cox, president of the Family Council, said Friday, "I wonder how many lottery tickets were given as Christmas gifts and how many lottery tickets were given to children as Christmas gifts."

In response, Woosley said in a written statement, "We have no way of tracking tickets once they are purchased. That said, we run a responsible gambling campaign each holiday season with the specific intent to encourage responsible gambling and to remind players that it is improper to give lottery tickets as gifts to anyone under the age of 18."

Despite collecting revenue last month exceeding any previous December, Woosley said the lottery didn't also raise a record amount for scholarships because "our prize expense was more, with several large instant ticket prizes that came in over the course of the month."

"We had a million-dollar prize early on and a $300,000 prize later on which had a big impact on our proceeds for the month. Those prizes are great for our players but can have a big impact on our profits depending on the timing of when they are cashed," he said.

Cox said he would like to see a larger share of revenue go for college scholarships.

For example, he said only 14.7 percent of the lottery's revenue ended up in net proceeds last month, and "that's a shamefully low number."

But Woosley said in his written statement that "historically we have returned close to 19-20% to proceeds over the life of the lottery.

"In 8 years, we have returned over $725 million in proceeds and helped to fund almost 300,000 scholarships for Arkansas students," said Woosley, who has served as the lottery's director since February 2012.

"Our results vary month to month based on prizes and the mix of games we sell. We strive to operate as lean as possible. We are currently operating with 20 less employees than we did at our all time high, and do everything we can to return the most money to scholarships that we can. We will continue to concentrate on that as we go forward," he said.

The Arkansas lottery started selling tickets on Sept. 28, 2009. In December 2009, the lottery's revenue was $42.8 million, a record that stood until last month.

The program has helped finance more than 30,000 Arkansas Lottery Scholarship tickets during each of the past several fiscal years.

The Legislature has cut the size of the future scholarships three times after net proceeds fell short of initial projections and more students than expected were awarded scholarships.

The state Department of Higher Education's latest projection is that in fiscal 2018, scholarships totaling $93.3 million will be awarded to 34,472 students.

So far, the largest number of students to receive these scholarships in a fiscal year was the 35,303 who received $112.8 million in fiscal 2014. The largest amount of scholarships distributed in a fiscal year was $132.9 million given to 33,522 students in fiscal 2013. Fiscal years start July 1.

The lottery's revenue and net proceeds peaked in fiscal 2012 at $473.6 million and $97.5 million, respectively, before dipping in each of the next three fiscal years.

Since fiscal 2016, revenue and net proceeds have rebounded.

Through the first six months of fiscal 2018, revenue totaled $243.3 million -- up from $212.8 million during the same period in fiscal 2017.

That's the largest amount of revenue collected halfway through a fiscal year since the lottery started selling tickets, exceeding the previous high of $227 million at the same point in fiscal 2012.

Through the first six months of fiscal 2018, the lottery raised $41.2 million for college scholarships, up from $36.3 million at the same time a year ago.

The only times in which the lottery raised more for scholarships halfway through the fiscal year was fiscal 2011, in which $46 million was raised, and fiscal 2012, with a total $45.6 million.

In December, the lottery's unclaimed prizes totaled $709,544 to increase the unclaimed-prize reserve fund to $4.09 million.

Under state law, the lottery transfers the unclaimed-prize reserve fund, minus $1 million, to college scholarships at the end of the fiscal year.

Woosley said the Legislature changed the lottery's monthly distribution of unclaimed prizes to net proceeds to the end of the fiscal year in fiscal 2011.

In order to compare the lottery's net proceeds of $46 million halfway through fiscal 2011 with $41.2 million halfway through fiscal 2018, $3.1 million in year-to-date unclaimed prizes should be added to the $41.2 million in fiscal 2018 "to get an apples to apples comparison," he said.

"For fiscal year 2012 and after, the net proceeds each month should be comparable without adjusting for unclaimed prizes," Woosley said.

For all of fiscal 2018, Woosley has projected the lottery's revenue at $459 million and net proceeds at $83.5 million.

Since Aug. 1, retailers have been given the option of accepting debit cards on ticket purchases under a new law. Before that law took effect, retailers had been limited to accepting only cash for tickets.

Woosley said he expects the lottery will do a survey this spring on how many retailers accept debit cards.

"There have been too many initiatives and launches in retail over the past 6 months to fit that in," he said in his written statement.

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