October take at lottery hits a high mark

Month’s revenue at $39.8M but scholarships’ funds lag

A surge from scratch-off tickets in October helped the Arkansas Scholarship Lottery’s revenue reach $39.8 million — the highest mark for the month since the lottery’s first year of operations in 2009.

The lottery raised $5.6 million for college scholarships last month and that fell short of each of its previous Octobers, except for $5.1 million in October of last year, according to the monthly lottery report to Gov. Asa Hutchinson and the Legislature’s lottery oversight subcommittee.

Asked why last month’s net proceeds lagged most of the previous Octobers, Woosley said Tuesday that in the past few years, the lottery hasn’t been adding unclaimed prizes into its monthly reports for net proceeds until the end of the fiscal year, “so if you include unclaimed [prizes] with this month’s total it comes to about $6.2 million.

“That would be an apples-to-apples comparison,” he said Tuesday.

Revenue in October increased by $5.8 million over the $34 million collected in the same month in 2016, the lottery reported.

“We had an excellent month of instant ticket sales and a good sales month with our draw games with particular success for Natural State Jackpot sales,” Woosley said in his written statement. Instant tickets also are called scratch-off tickets.

The largest amount of revenue that the lottery has collected in the month of October is the $46.3 million recorded in 2009 — the first full month that the lottery sold tickets. The lottery started selling scratch-offs on Sept. 28, 2009, and started selling Powerball tickets on Oct. 31, 2009.

The lottery has helped finance more than 30,000 Arkansas Academic Challenge Scholarships during each of the past seven fiscal years. The Legislature has cut the size of future scholarships three times during this period because of lagging projections for net proceeds and more students than projected being awarded the scholarship.

Revenue peaked at $473.6 million and net proceeds at $97.5 million in fiscal 2012 before dropping for three consecutive fiscal years. Since then, net proceeds

have rebounded in the past two fiscal years to $85.2 million. Fiscal years start July 1 and end June 30.

In October, scratch-off revenue increased by about $5.5 million over revenue a year ago to $34 million, while draw-game revenue inched up by about $220,000 over a year ago to $5.6 million, according to the lottery report.

The draw games are Powerball, Mega Millions, Cash 3, Cash 4, the Natural State Jackpot, Fast Play and Lucky for Life. Revenue also includes fees paid by retailers.

“We have been seeing a good trend with instant tickets for many months and this was no different,” Woosley said. A new oversize scratchoff ticket called the Big Money Multiplier “thus far has been the highest selling $10 game we have ever had for the 6-week period it has been available,” he said in his written statement.

The $5.6 million raised for college scholarships last month is up by about $500,000 over the same month a year ago. The largest amount raised for scholarships in the month of October is $9.8 million in 2010.

During the first four months of fiscal 2018, revenue has totaled $162.4 million — up by $21.9 million over the same period in fiscal 2017.

The number of lottery retailers was 1,935 at the end of October — up by 16 from 1,919 a year ago.

Effective Aug. 1, a new law allowed lottery retailers the option of accepting debit cards for ticket purchases. Before the law became effective, the retailers had been limited to accepting cash for purchases.

“Our system cannot track debit purchases so there is no way of obtaining the information,” Woosley said when asked how much of an impact the debit-card purchases are having on overall

sales.

But, he added, “I think the law allowing the purchase of lottery tickets using debit cards has definitely had a positive impact on sales.”

Woosley said lottery officials

haven’t counted how many of the retailers accept debit cards yet, and “it is likely we will conduct a survey of which retailers are accepting debit cards before the end of the fiscal year.”

During the first four months of fiscal 2018, net proceeds totaled $27.9 million — compared with $25.1 million in the same period in fiscal 2017.

Unclaimed prizes last month were $563,676 and will increase the unclaimed prize reserve fund to $3.2 million as of Oct. 31. At the end of the fiscal year, the balance of the reserve fund, minus $1 million, goes to college scholarships under state law.

Woosley has projected revenue of $459 million and net proceeds for scholarships at $83.6 million in fiscal 2018.

“As of now, we are about $4.8 million above budget for proceeds for the year,” said Woosley, who has been lottery director since February 2012. “I am not sure if we have ever been in a better position at this point during a fiscal year.”

Last month, the state Department of Higher Education reported that it expects to award Arkansas Academic Challenge Scholarships to more than 36,000 students this

fiscal year and that’s more than have been awarded in each of the previous seven fiscal years in which the lottery has helped pay for the scholarships. The department has projected that it will award scholarships worth $97.3 million to 36,014 students in fiscal 2018.

Beyond the lottery, state general revenue of $20 million a year and the lottery reserve fund of $20 million help pay for the scholarships. The reserve fund helps cover the department’s temporary cash shortfalls to pay for scholarships before the fund is replenished with money raised by the lottery.