Large jackpots drive lottery revenue surge

Amount raised for scholarships increases from $8.2 million to $12.3 million

Bolstered by more than $1 billion Powerball and Mega Millions jackpots, the Arkansas Scholarship Lottery’s revenue in March increased from $54.2 million a year ago to $58.7 million.

The amount raised by the lottery for college scholarships for the month increased from $8.2 million to $12.3 million, the lottery reported this week in its monthly report to Gov. Sarah Huckabee Sanders and the Legislative Council’s lottery oversight subcommittee.

The large Powerball and Mega Millions jackpots are the main reason for the increased amount raised for college scholarships, lottery Gaming Director Mike Smith said Friday. Ticket sales for draw-game ticket sales such as Powerball and Mega Millions are more profitable to the lottery than scratch-off ticket sales.

The lottery’s draw-game ticket revenue surged from $9 million in March of 2023 to $14 million last month, while the lottery’s scratch-off ticket revenue dipped slightly from $45.1 million in March of 2023 to $44.6 million last month, according to the lottery’s reports.

The draw-game ticket revenue increased primarily because of the large multistate game jackpots, Smith said.

Powerball ticket revenue increased from $1.7 million in March of 2023 to $4.5 million last month and Mega Millions ticket revenue increased from $1.6 million in March of 2023 to $3.7 million last month, based on the lottery reports.

The peak advertised jackpot last month for Powerball was $1.3 billion and the peak advertised jackpot for Mega Millions last month was $1.13 billion, Smith said.

The winner of the $1.3 billion Powerball jackpot won’t be announced for at least a couple more weeks until their ticket is verified and arrangements for the massive payment are made, Oregon lottery officials said this week, according to The Associated Press. A person with a ticket matching all six Powerball numbers in Saturday’s jackpot drawing came forward Monday to claim the prize from last weekend’s drawing. They bought the ticket at a convenience store in northeastern Portland.

The March 26 drawing for an estimated $1.13 billion Mega Millions jackpot was won by a ticket sold in the Jersey Shore city of Neptune, N.J., lottery officials said.

The Arkansas Scholarship Lottery’s other draw games include Cash 3, Cash 4, Fast Play, Lotto, Lucky for Life and Natural State Jackpot.

Smith said scratch-off ticket revenue from retailer cash sales in March was “flat” year over year.

“The reported scratch off revenues were slightly less in March 2024 versus March 2023 due to game launch date differences,” he said in a written statement. “Three days of March 2024 scratch off revenues were booked in February. Last year the games launched February 28 and this year they launched February 27.”

March was the ninth month of fiscal year 2024, which ends June 30.

During the first nine months of fiscal 2024, lottery revenue totaled $464.2 million — up slightly from $459.5 million in the same period in fiscal 2023 — according to the lottery’s reports.

During the first nine months of fiscal 2024, the lottery’s scratch-off ticket revenue totaled $359 million — up from $352.9 million in the same period in fiscal 2023 — and the lottery’s draw game ticket revenue totaled $104.6 million — a slight dip from $106 million in the same period in fiscal 2023 — the lottery reported.

During the first nine months of fiscal year 2024, the amount raised for college scholarships totaled $87.9 million, an increase from $80.7 million in the same period in fiscal 2023, according to the lottery’s reports.

At the end of each fiscal year, the lottery transfers the balance of its unclaimed prize reserve fund, minus $1 million, to scholarships. The lottery’s unclaimed prize reserve fund totaled $9.2 million at the end of March after receiving $206,735 in unclaimed prizes.

Smith said the lottery’s amount raised for college scholarships through March 31 is $19 million better than the projected budget for fiscal year 2024 after nine months.

For all 12 months of fiscal 2024, the lottery has projected total revenue of $567.9 million and raising $100.7 million for college scholarships.

In fiscal 2023, which ended June 30, the lottery raised $114.7 million for college scholarships, the largest amount it has produced in any fiscal year. The lottery’s previous high for scholarships was $106.6 million raised in fiscal 2021, which ended June 30, 2021.

The lottery’s revenue in fiscal 2023 totaled $608.2 million, lagging behind the $632.5 million collected in fiscal 2021. In fiscal 2021, lottery officials attributed the performance in part to factors brought on by the covid-19 pandemic, such as people spending more time at home.

Former lottery director Eric Hagler attributed the record amount of money raised for college scholarships in fiscal 2023 to collecting more draw-game ticket revenue in that fiscal year.

Hagler, who had served as the lottery’s director since August of 2020, tendered his resignation March 28 without explanation.

Arkansas Department of Finance and Administration spokesman Scott Hardin has said state Department of Finance and Administration Secretary Jim Hudson did not make a request for Hagler’s resignation, and “Secretary Hudson and Eric never discussed the subject. We wish him the best as he pursues new opportunities and appreciate his service to the state.”

Asked about a timeline for filling the lottery director post, finance department spokesman Scott Hardin said Friday, “We don’t have any updates to share regarding a potential timeframe for a new director.”

COLLEGE SCHOLARSHIPS

So far in fiscal 2024, the state Division of Higher Education has disbursed $73.8 million in Arkansas Academic Challenge scholarships and 28,743 students have been awarded scholarships, state Department of Education spokeswoman Kim Mundell said Friday.

In fiscal 2023, the Division of Higher Education disbursed Arkansas Academic Challenge scholarships totaling $74.3 million to 26,109 students. For fiscal 2024, the Division of Higher Education projected it will award 27,000 students Academic Challenge scholarships totaling $75 million.

Fiscal 2023 is the second consecutive fiscal year over the past 13 fiscal years in which Arkansas Academic Challenge scholarships were awarded to fewer than 30,000 students.

The amount handed out for Academic Challenge scholarships peaked at $132.9 million in fiscal 2013, with awards going to 33,353 students. Scholarship totals have dropped largely because the legislature cut the amount of initial scholarships several times.

The Arkansas Academic Challenge scholarships are financed with lottery proceeds plus $20 million a year in state general revenue.

So far in fiscal 2024, the division has disbursed $780,754 in Workforce Challenge scholarships, Mundell said, and 1,073 students have been awarded those scholarships.

In fiscal 2023, the Division of Higher Education disbursed Workforce Challenge scholarships totaling $521,277 to 701 students. For fiscal 2024, the division projected awarding Workforce Challenge scholarships totaling $750,000 to 2,000 students.

In 2017, the legislature created the Workforce Challenge Scholarship to use excess proceeds to provide up to $800 per year for students enrolled in programs that lead to qualifications in high-demand occupations.

So far in fiscal 2024, the division has disbursed $3.5 million in Concurrent Challenge scholarships and 8,680 students have been awarded scholarships, Mundell said.

In fiscal 2023, the division disbursed Concurrent Challenge scholarships totaling $2.6 million to 13,982 students. In fiscal 2024, the division projects distributing Concurrent Challenge scholarships totaling $3 million to 17,000 students.

In 2019, the legislature created the Concurrent Challenge program that allows high school juniors and seniors to receive scholarships for a semester or an academic year in which they are enrolled in an endorsed concurrent course or certain programs.