Law kicks in on debit card use in lottery
BRYANT — For now, the owner of the Arkansas Scholarship Lottery’s top-selling retailer is hedging his bets on debit cards.
A sign near the cash registers at Y&E Superstop along Interstate 30 in Bryant states, “No debit cards for lottery.”
The store’s owner, Eddie Park, is among a few of the lottery’s top-10 ticket-selling retailers who said they’ve not yet decided whether to accept debit cards for lottery ticket purchases, although a state law giving more than 1,900 retailers the option went into effect Tuesday.
“We are going to hold it for a while [and] see what everybody else is doing,” Park said, adding he’s no rush to make a decision.
The law authorizing lottery retailers to accept debit cards, Act 876 of 2017, also allows retailers to accept other “noncash, noncredit method of payment” such as Apple Pay and Google Wallet.
It makes the retailers who accept these payment methods responsible for any costs, fees or charge-backs that go with the transactions. Credit cards and checks are still prohibited for lottery ticket purchases.
Park, whose store has been the top seller for the past three fiscal years, said the fees card companies charge on each debit card transaction is among the factors that will weigh into his decision.
Some retailers said the fees charged to stores may range from 30 cents to 60 cents per transaction.
A handful of Y&E Superstop customers interviewed Tuesday afternoon said it doesn’t make a difference to them whether the store begins accepting debit cards on their ticket purchases.
“I think that’s their own preference. It costs them money,” said a woman who declined to give her name as she gathered dozens of discarded lottery tickets from a trash bin outside the store.
Willie Eason of Bryant, a retired Anheuser-Busch warehouse worker, said “I don’t use any debit card because I would spend too much money.” “I would be broke,” he said. Park’s store sold $2.18 million in tickets in fiscal 2017, which ended June 30.
The lottery reported revenue of $449.9 million for 2017 and reported raising $85.2 million for college scholarships.
Lottery Director Bishop Woosley, uncertain whether use of debit cards will boost revenue, has projected 2018 lottery revenue of $459 million and net proceeds for college scholarships at $83.6 million.
The lottery has helped finance more than 30,000 Arkansas Academic Challenge Scholarships each of the past seven fiscal years.
Lottery retailers, such as Park, are weighing the commissions the lottery pays them and any additional business that can result from accepting debit cards for lottery ticket purchases against the cost of the debit card transaction fees.
Each lottery retailer receives a “base commission” of 5 percent of sales of scratch-off tickets and of tickets for draw games such as Powerball, Mega Millions, Cash 3, Cash 4 and the Natural State Jackpot.
The retailer also gets a “cashing commission” of 1 percent for each dollar in prizes redeemed by customers. Retailers are required to redeem prizes up to $500.
Each also gets a “selling commission” of 1 percent of a prize amount of $10,000 or more on each ticket validated and paid to a player. The selling commission is limited to $50,000.
Under the lottery’s rules, each retailer also may receive a commission of up to 10 percent on “special games” authorized by Woosley.
The lottery’s second-ranked top-selling retailer, Freeway Mart near the intersection of Baseline and Chicot roads in Little Rock, started accepting debit cards on lottery ticket purchases Tuesday, said manager Bongil Ko.
Ko said he doesn’t like having to pay the card companies’ fees on debit card transactions, but he “just doesn’t want to lose the customer.”
The lottery’s third-ranked top retailer, Tobacco Corner Plus in Morrilton, also started accepting debit cards for lottery purchases Tuesday, but it’s charging a 2 percent fee on the purchases to help cover the cost of card transaction fees, according to a store employee.
The fourth-ranked, Wildwood Shell in Sherwood, is accepting debit cards for lottery ticket purchases, said Nicole Endsley, store manager. One woman bought $200 in lottery tickets there using her debit card Tuesday.
“It makes it a lot easier. It doesn’t hold up the line because they have to have cash,” she said.
The debit card transaction fees will be a small part of the overall business, she said.
The fifth-ranked lottery retailer, Kwick Check III on Geyer Springs Road, is accepting debit cards only for lottery ticket purchases of at least $20, said store owner Yun Lee.
Requiring a minimum lottery ticket purchase of $20 allows him to break even and “make some profit,” he said.
So far, Woosley said, “we have had a lot of positive feedback from both our chains and our independents on this change.
“I think as time goes on and customer demand increases, you will see more and more retailers accept debit cards,” he said.
E-Z Mart has 85 lottery outlets in Arkansas, according to the lottery.
Murphy Oil USA, the chain with the second-most lottery outlets, is accepting debit cards, said Jerriane Thomas, a spokesman for the El Dorado-based company. Murphy Oil USA has 69 lottery outlets in Arkansas, according to the lottery.