Lot­tery rev­enue for July down from 2016 to­tal

Scratch-off ticket pur­chases surge

Northwest Arkansas Democrat-Gazette - - NORTHWEST ARKANSAS - MICHAEL R. WICKLINE

The Arkansas Schol­ar­ship Lot­tery’s rev­enue and the amount raised for col­lege schol­ar­ships dipped in July from a year ago when the lot­tery posted record rev­enue and net pro­ceeds for the month.

July rev­enue to­taled $36.8 mil­lion — $1.4 mil­lion less than the $38.2 mil­lion in the same month a year ago — the lot­tery re­ported in its monthly re­port to Gov. Asa Hutchin­son and the Leg­isla­tive Coun­cil’s lot­tery over­sight sub­com­mit­tee.

While scratch-off ticket rev­enue surged from $27.8 mil­lion in July 2016 to $29.5 mil­lion last month, drawgame rev­enue dropped from $10.3 mil­lion to $7.2 mil­lion year over year.

Lot­tery rev­enue also in­cludes fees from re­tail­ers, who num­bered 1,934 on July 31, up from 1,917 a year ago.

The re­lease of a pop­u­lar Willy Wonka scratch-off in July boosted rev­enue for that type of game from a year ago, lot­tery Di­rec­tor Bishop Woosley said Thurs­day.

“This con­tin­ues a pos­i­tive growth trend that we have seen in the last few months with in­stant tick­ets,” he said. Scratch-offs also are re­ferred to as in­stant tick­ets.

Draw-game ticket rev­enue in July de­clined from the same month a year ago be­cause last month didn’t have the draw­ing power of last year’s July Power­ball jack­pot of $478 mil­lion, which was the fifth-largest ever, and the $540 mil­lion Mega Mil­lions jack­pot, which was the third-high­est ever, Woosley said.

“Those two jackpots had an enor­mous im­pact on our sales and pro­ceeds for the month. It is re­ally un­prece­dented to have that type of dual jack­pot month,” he said in a writ­ten state­ment.

Net pro­ceeds last month dropped to $6.6 mil­lion from $8.7 mil­lion in July of 2016 be­cause “last July was our best pro­ceeds July in his­tory due to the two large multistate jackpots and a record un­claimed prize amount due to the 1.6 bil­lion dol­lar Power­ball jack­pot in Jan­uary [2016],” ac­cord­ing to Woosley.

“It was go­ing to be im­pos­si­ble to com­pete with that num­ber with­out sim­i­lar sized jackpots as we saw last July. That said, this was one of our best sales and pro­ceeds months in July in a long time. And we are start­ing the [fis­cal] year with a nice sur­plus in pro­ceeds. That is a great place to be,” he said.

The lot­tery has been sell­ing tick­ets since Sept. 28, 2009, and has helped fund 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 more stu­dents than ini­tially pro­jected earned the schol­ar­ship and the amount raised for schol­ar­ships fell short of lot­tery pro­po­nents’ ini­tial pro­jec­tions of about $100 mil­lion a year.

Net pro­ceeds for the schol­ar­ships peaked at $97.5 mil­lion in fis­cal 2012 and then dropped for three con­sec­u­tive years. The funds have in­creased in each of the past two fis­cal years.

In fis­cal 2017, which ended June 30, lot­tery rev­enue to­taled $449.9 mil­lion, a de­cline of about $13.4 mil­lion from fis­cal 2016. Net pro­ceeds for col­lege schol­ar­ships reached $85.2 mil­lion, ex­ceed­ing the amount raised in fis­cal year 2016 by $2,403.

For fis­cal 2018, Woosley has pro­jected rev­enue of $459 mil­lion and net pro­ceeds at $83.6 mil­lion, as un­cer­tainty re­mains about the num­ber of lot­tery re­tail­ers that will ac­cept debit cards for ticket pur­chases and any re­sult­ing in­crease in sales.

The Leg­is­la­ture changed state law ear­lier this year to give lot­tery re­tail­ers the op­tion of ac­cept­ing debit cards start­ing Aug. 1. Re­tail­ers have been di­vided about whether it makes fi­nan­cial sense for them to ac­cept debit cards and hope their gains ex­ceed the card trans­ac­tion fees.

For ex­am­ple, spokes­men for Murphy USA and Kroger Co. have said their lo­ca­tions in Arkansas will ac­cept debit-card lot­tery pur­chases, while an ex­ec­u­tive for E-Z Mart Stores Inc. has said its stores won’t ac­cept debit cards for now.

In fis­cal 2017, the Arkansas Depart­ment of Higher Ed­u­ca­tion handed out $86.1 mil­lion in Arkansas Aca­demic Chal­lenge Schol­ar­ships, a de­cline from $96.4 mil­lion in fis­cal 2016, ac­cord­ing to Tara Smith, deputy di­rec­tor for the depart­ment.

The largest schol­ar­ship amount dis­trib­uted was $132.9 mil­lion in 2012.

“We will be pro­vid­ing an up­date on avail­abil­ity for funds for Work­force Chal­lenge Schol­ar­ship at the next lot­tery over­sight meet­ing [on Thurs­day],” Smith said in an email.

The Work­force Chal­lenge Schol­ar­ship Pro­gram was cre­ated as a re­sult of this year’s Leg­is­la­ture and Gov. Asa Hutchin­son en­act­ing Act 613 of 2017.

The pro­gram will use any ex­cess lot­tery pro­ceeds to fund schol­ar­ships for stu­dents en­rolled in higher-ed­u­ca­tion pro­grams that lead to qual­i­fi­ca­tion for jobs in high-de­mand oc­cu­pa­tions.

El­i­gi­ble stu­dents would have to be in a pro­gram at a pub­lic or pri­vate higher-ed­u­ca­tion in­sti­tu­tion in Arkansas that leads to an as­so­ciate de­gree or a cer­tifi­cate pro­gram in in­dus­try, health or in­for­ma­tion tech­nol­ogy and qual­i­fies them to work in an oc­cu­pa­tion iden­ti­fied by the Depart­ment of Work­force Ser­vices un­der Act 613.

“Any un­used net lot­tery pro­ceeds that were trans­ferred to ADHE in [fis­cal] 17 for Aca­demic Chal­lenge will be put aside for the Work­force Chal­lenge Schol­ar­ship,” Smith said in her email.

“We have $4,887,236.92 re­main­ing from un­used net lot­tery pro­ceeds in FY17. Those funds will be put in the new trust ac­count for the Work­force Chal­lenge Schol­ar­ship for which we will take ap­pli­ca­tions for next year.

“We are still work­ing on pro­jec­tions for FY18 be­cause we are still pro­cess­ing new ap­pli­ca­tions and up­dat­ing cur­rent re­cip­i­ents sta­tuses to de­ter­mine if they meet con­tin­u­ing el­i­gi­bil­ity re­quire­ments,” she said.

The lot­tery has been sell­ing tick­ets since Sept. 28, 2009, and has helped fund more than 30,000 Arkansas Aca­demic Chal­lenge Schol­ar­ships dur­ing each of the past seven fis­cal years.

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