State lottery revenue increases in February
Amount raised for scholarships declines
The Arkansas Scholarship Lottery’s revenue in February increased over a year ago, but the amount raised for college scholarships slipped last month from a year ago.
The lottery’s scratch-off revenue last month increased from $35.7 million a year ago to $37.2 million, while the lottery’s draw game revenue increased from $6.5 million a year ago to $8.7 million, the lottery reported Friday in its monthly report to Gov. Sarah Huckabee Sanders and the Legislatures’ lottery oversight subcommittee.
Lottery Director Eric Hagler said inclement weather weighed on February ticket sales in the previous two years, but not this year.
“We have seen tremendous sell-through of the [scratchoff ticket] portfolio, which is a testament to the incredible work being done by our Gaming Department in conjunction with our instant ticket vendor, Scientific Games,” he said Friday in a written statement.
The lottery’s increased draw game revenue was driven by jackpots in the multistate games as well as AR Lotto, Hagler said.
Among the lottery’s draw game tickets, Powerball ticket revenue increased from $1.8 million a year ago to $2.7 million, and Mega Millions ticket revenue inched up from $1 million a year ago to $1.1 million, according to the lottery.
Ticket revenue for the AR Lotto draw game, which started in mid-september, totaled $992,880 in February, according to the lottery. No one has won the AR Lotto jackpot yet. The jackpot started at $250,000. The AR Lotto jackpot totaled $1.8 million Friday, according to the lottery’s website.
“We have booked $5 million in sales and … our first winner will be an instant millionaire even after taxes,” Hagler said.
Asked how often the lottery expected the AR Lotto jackpot to be hit in fiscal year 2023, he said the “matrix of the AR LOTTO game, considering our player population, portends that the jackpot is likely to be hit once or twice a year.
“As players enter the game, the odds of a winning combination increase,” Hagler said. “Colorado Lottery launched a similar game ahead of Arkansas, and that game has produced one winning combination.”
The amount raised for college scholarships dropped from $7.4 million a year ago to $7 million in February because the lottery closed seven games in February that resulted in unclaimed prizes of $988,418, he said.
“This resulted in lower net proceeds as unclaimed prizes are not recognized as net proceeds until the end of each fiscal year (June 30),” Hagler said.
February is the eighth month of fiscal 2023, which started July 1, 2022 and ends June 30.
During the first eight months of fiscal 2023, the lottery’s total revenue reached $405.2 million — up from $379.6 million in the same period in fiscal 2022.
So far in fiscal 2023, the lottery’s scratch-off ticket revenue is $307.8 million, a slight decline from $311.3 million in the same period in fiscal 2022.
But the lottery’s draw game ticket revenue is $97 million so far in fiscal 2023, up from $67 million in the same period in fiscal 2023. Sales of the lottery’s draw game tickets are more profitable to the lottery than are sales of scratch-off tickets.
During the first eight months of fiscal 2023, the amount raised for college scholarships totals $72.4 million, up from $61.9 million in the same period in fiscal 2022.
At the end of each fiscal year, the lottery’s unclaimed prizes reserve fund minus $1 million is transferred to college scholarships. The unclaimed prizes reserve fund totaled $8 million at the end of February.
For fiscal 2023, the lottery projected total revenue of $535.9 million and raising $91.4 million for college scholarships.
In fiscal 2022, the lottery collected revenue of $580.2 million and raised $99.7 million for college scholarships. They were the second-largest amounts the lottery has reported in any fiscal year, trailing only fiscal 2021 when the lottery collected revenue of $632.5 million and raised $106.6 million for college scholarships.
Lottery officials attributed the records set in fiscal 2021 in part to factors brought on by the covid-19 pandemic, such as people spending more time at home.
For fiscal 2023, Hagler said “we are well ahead of forecast for Net Proceeds.
“Current trend line is pointing us towards a possible historic record for the Lottery, beating FY21’S high-water mark of $106 million in Net Proceeds,” he said in his written statement.
SCHOLARSHIPS
So far in fiscal 2023, the Division of Higher Education has handed out Arkansas Academic Challenge Scholarships totaling $53.5 million to 28,421 students, according to Nick Fuller, the division’s assistant director of finance.
In fiscal 2022, which ended June 30, the division awarded a total of $75.1 million in Arkansas Academic Challenge Scholarships to 28,716 students.
Fiscal 2022 is the first fiscal year in the past 12 fiscal years that Arkansas Academic Challenge Scholarships were awarded to fewer than 30,000 students. Fuller has said that’s because of the continued trend of overall enrollment decline in higher education and the total number of high school students continuing to get smaller, leading to a smaller pool from which scholarships are awarded.
The amount handed out for the 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.
The 2017 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 2023, the Division of Higher Education has handed out Workforce Challenge Scholarships totaling $414,336 to 2,509 students, Fuller said.
In fiscal 2022, the division awarded these scholarships totaling $605,694 to 690 students.
The 2019 Legislature created the Concurrent Challenge program that allows high school juniors and seniors to receive the scholarships for a semester or an academic year in which they are enrolled in an endorsed concurrent course or certain programs.
So far in fiscal 2023, the division has handed out Concurrent Challenge Scholarships totaling $2.1 million to 7,438 students, Fuller said.
For the Concurrent Challenge program, the division awarded scholarships totaling $2.7 million to 16,432 students in fiscal 2022.