Big January jackpots boost lottery’s revenue

Large Mega Millions and Powerball jackpots in January fueled a $7 million increase over the same month last year in the Arkansas Scholarship Lottery’s revenue, to $44 million.

Net proceeds — the amount raised for college scholarships — inched up by nearly $300,000 from the same month a year ago to $8.2 million, the lottery said in its latest monthly report to Gov. Asa Hutchinson and the Legislative Council’s lottery oversight subcommittee.

“Any time you see a significant sales increase, what generally follows is a higher prize expense, [and] we saw that this January,” lottery Director Bishop Woosley said Monday when asked why the lottery’s net-proceeds increase last month lagged its revenue increase on a percentage basis. “The increase in prize expense had an impact on our proceeds.”

For the first seven months of fiscal 2018, the lottery set a record in revenue collection, but net proceeds were around the average of the past few years.

Revenue and net proceeds in January fell short of the 2016 records for the month. Bolstered by a $1.6 billion Powerball jackpot in January 2016, the lottery collected $58.7 million in revenue and raised $13.8 million for college scholarships. That is the record for any month since the lottery started selling tickets Sept. 28, 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 the past several years because of net proceeds falling short of initial projections and more students than initially projected getting the 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 amount in scholarships distributed in a fiscal year was $132.9 million given to 33,522 students in fiscal 2013. Fiscal years start July 1.

In January, scratch-off ticket revenue increased from $31.2 million a year ago to $33.7 million, while the draw-game ticket revenue increased from $5.7 million a year ago to $10.2 million, the lottery reported.