Lottery scores its best month in dozen years
March’s $67.9M a record; agency opposes keno bill
Bolstered by surging scratch-off ticket sales, the Arkansas Scholarship Lottery’s total revenue in March rose by $20.1 million over the same month a year ago to $67.9 million, to set a record for any month in the agency’s history.
The lottery has been selling tickets since Sept. 28, 2009. Its previous record haul for any month was $63 million in January, said Scott Hardin, a spokesman for the state Department of Finance and Administration, under which the lottery operates.
The amount raised for college scholarships last month increased by about $1 million over the same month a year ago to $8.3 million. The record amount raised for scholarships in any month is $13.8 million in January 2016.
The Arkansas Scholarship Lottery reported these figures in its monthly report to Gov. Asa Hutchinson and the Legislature’s lottery oversight subcommittee. The lottery has helped finance Arkansas Academic Challenge Scholarships for more than 30,000 college students during each of the past 10 fiscal years.
In another lottery-related development, lottery Director Eric Hagler said the agency opposes a bill that would create the Arkansas Lottery Keno and ILottery Act. Some state lawmakers have taken a dim view in the past about the lottery offering keno games.
Rep. Les Eaves, R-Searcy, chairman of the House Rules Committee, said Tuesday afternoon that he doesn’t expect the bill to be considered by the committee during this regular legislative session.
In March, scratch-off ticket revenue rose by $18.1 million over the same month a year ago to $59.7 million, while draw-game revenue increased by $2 million to $8.1 million.
Draw games include Mega Millions, Powerball, Fast Play, Natural State Jackpot, Cash 3, Cash 4 and Lucky for Life.
Asked why scratch-off revenue saw such a large increase last month, coupled with an increase in draw-game revenue, lottery Gaming Director Mike
Smith said the lottery offered a popular multiplier theme of scratch-off tickets in March.
“The multiplier-themed games have become a staple product that is in high demand by our players,” he said in the lottery’s written statement about last month’s results. “Our draw games, especially our in-state games, have continued to be popular with our players this fiscal year.”
Lottery Sales Director Mark Hearn noted in the written statement, “We pulled our Sales Representatives out of the field in March 2020, which initially caused a dip in sales.
“Our reps are back in the field and we are seeing the benefits of a return to a hands-on approach to providing premium support for our retail network,” he said. The lottery had 1,972 retailers at the end of March.
Hagler said in the written statement that “[federal] stimulus money, a change in the tax-deadline [and] the re-opening of the larger economy have also likely served to benefit sales.”
Revenue set a record, but not net proceeds.
“Net Proceeds do not always track sales in linear fashion,” Hagler said. “Couple this fact with the accounting adjustments on cash sales, and the result is a lag on reporting.” For example, unclaimed prizes for March totaled $1.024 million, an amount that will be transferred to scholarships at the end of fiscal 2021, on June 30, he said.
He also said an adjustment in April’s report “completes the total picture for March. We expect to see an approximate $2M in additional Net Proceeds from March’s effort.”
FISCAL YEAR SO FAR
March is the ninth month of fiscal 2021.
During the first nine months of fiscal 2021, revenue totaled $456 million, compared with $368.8 million in the same period in fiscal 2020.
So far in fiscal 2021, scratch-off revenue totaled $378.1 million, compared with $310.4 million in the same period in fiscal 2020. Draw-game revenue totaled $77.4 million, compared with $57.9 million in the same period in fiscal 2020.
The amount raised for college scholarships this fiscal year totaled $71.6 million, compared with $57.5 million in the same period in fiscal 2020.
The unclaimed prize reserve fund totaled $7.6 million at the end of March. Under state law, the balance minus $1 million will be transferred to college scholarships at the end of the fiscal year.
The lottery’s previous director, Bishop Woosley, projected fiscal 2021 revenue at $456.8 million and the amount for college scholarships at $78.2 million. He said that in May 2020, not long after the start of the covid-19 pandemic.
In fiscal 2020, lottery revenue reached $532 million to set a fiscal year record, and $89.4 million was raised for college scholarships, which was the sixth-largest amount in the lottery’s history.
The record amount raised for college scholarships was $98.6 million in fiscal 2019. Woosley attributed the drop in fiscal 2020 to poor sales for Mega Millions and Powerball tickets.
KENO, ILOTTERY
House Bill 1869 by Rep. Aaron Pilkington, R-Clarksville, would create the Arkansas Lottery Keno and Ilottery Act.
In June, Woosley told lawmakers that the lottery is considering implementing the game of keno and a digital channel as an iLottery offering.
Under Act 8 of the Second Extraordinary session in 2014 — sponsored by now-Senate President Pro Tempore Jimmy Hickey, R-Texarkana — the Legislature temporarily barred the lottery from deploying keno games through a ban on “multi-draw screenbased” lottery games until March 13, 2015.
Hagler, who started work as the lottery’s director in August, said, “we are aware of and we are opposed to HB1869.
“One question is, who is behind this piece of legislation? It isn’t the Office of the Arkansas Lottery,” he said in the lottery’s written statement.
The adoption of keno is far different from simply adding a new game to the lottery portfolio, and physical keno is an equipment-intensive endeavor, which will require the lottery to lease additional equipment from a vendor, Hagler said.
“In short, this type of heavy lift benefits the vendor from inception; the strain is on the Lottery in the early years — and perhaps beyond,” he said. “When presented with promises of increased revenue, it is important to remember, ‘revenue is a possibility, but the expenses are guaranteed.’”
Eaves said he talked to Pilkington and doesn’t expect Pilkington to ask the committee to consider the bill during this session.
“That’s a big bill and probably a big lift” to get out of the House Rules Committee, Eaves acknowledged in an interview.
Pilkington could not be reached for comment by telephone Tuesday.
SCHOLARSHIPS
The Arkansas Division of Higher Education has projected that it will distribute $91 million in Academic Challenge Scholarships in fiscal 2021 to 31,000 students.
It distributed $90.6 million of those scholarships to 31,469 students in fiscal 2020.
These scholarships are financed with lottery proceeds and $20 million a year in general revenue.
Academic Challenge Scholarships peaked at a total $132.9 million in fiscal 2013, going to 33,353 students. The total amount awarded of that scholarship has dropped since then largely because the Legislature cut the amounts of the initial scholarships.
The 2017 Legislature created the Workforce Challenge program to use the lottery’s excess proceeds to provide up to $800 a year for students enrolled in programs that lead them to being qualified in high-demand occupations.
The 2019 Legislature created the lottery-financed Concurrent Challenge program. High school juniors and seniors are eligible to receive the scholarships for a semester or an academic year in which they are enrolled in an endorsed concurrent course or certain programs.