Report Shows Scholarship Decline from ’14 to ’15 at Arkansas Lottery

Arkansas Lottery

The Arkansas Lottery released its financial report for the month of June earlier today. As previously expected, the Arkansas Lottery allocated a little less than $72.5 million for college scholarships during Fiscal Year 2015–almost $9 million less than the “very conservative budget” lottery officials initially approved last year.

The report shows that from Fiscal Year 2014 to Fiscal Year 2015 lottery ticket sales declined by about $1.4 million, but lottery scholarship funds dropped by roughly $9 million.

Last June the Arkansas Lottery supplemented scholarship funding with $5 million from its Unclaimed Prizes account.

All told, the Arkansas Lottery spent 17.7% of its income on scholarships during the past year–down from 19.8% in Fiscal Year 2014. Below is a breakdown of lottery revenue and scholarship allocations from the past 12 months. (more…)

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Arkansas Lottery Hires New Sales Director Amid Decline

Arkansas Lottery

According to an article in the Arkansas Democrat-Gazette, the Arkansas Lottery has hired a new sales director amid lagging sales and scholarships.

The article states,

“The Arkansas Scholarship Lottery’s sales director, Mitch Chandler, didn’t meet the minimum requirements for the post in the lottery’s job description, according to records obtained by the Arkansas Democrat-Gazette.

“Lottery Director Bishop Woosley said Thursday he waived the requirement for Chandler to have a bachelor’s degree.

“The job was not posted, and the public wasn’t invited to apply; lottery officials hope the new sales director will help reverse years of declining revenue and scholarship proceeds.”

The article goes on to say the new sales director will receive around $104,000 per year.

Right now the Arkansas Lottery is positioned to come up several million dollars short of its initial scholarship budget for Fiscal Year 2015. Many continue to cite lagging ticket sales as part of the reason for the scholarship shortfall.

However, we have maintained for years, now, that the Arkansas Lottery does not have a “revenue problem.” It has a priorities problem.

Every state lottery we have reviewed started with significant sales followed by a period of decline and plateau. When the lottery opens shop, people are lined up to buy tickets; once the novelty wears off, ticket sales decline and then stabilize.

The Arkansas Lottery managed to keep its sales artificially propped up by rolling out more gambling more quickly than any state lottery we know. Now the state is saturated with lottery games, and ticket sales have declined. Meanwhile, the Lottery has doled out money on administrative and advertising expenditures, and it has continued to reduce the percentage of its gross revenue it allocates for scholarships.

The Arkansas Legislature moved the Lottery under the purview of the Department of Finance and Administration in hopes doing so would improve the Lottery.

The Lottery keeps trying to bolster itself through new games and marketing. If the Lottery keeps doing what it has always done, it is going to get the same results it has always gotten.

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Lottery Scholarship Proceeds Slip to 15% as Revenue Increases in May

Arkansas Lottery

The Arkansas Lottery has released its financial summary for the month of May. The report shows lottery revenue increased by more than $1.8 million from April to May.

Despite this increase in revenue, scholarship proceeds dropped by nearly $472,000–falling to $5.4 million or 15% of the Lottery’s revenue for the month.

All told, the Arkansas Lottery has taken in $375,419,115.97 since July 1, 2014, but it has only paid out $64,171,317.48 in scholarship money–17% of the Lottery’s overall revenue for the year.

The Arkansas Lottery’s fiscal year closes at the end of this month. Looking at the numbers, it appears the Arkansas Lottery likely will pay out between $70 and $76 million in scholarships this fiscal year–about 17% – 18% of its gross revenue.

Below is a breakdown of the Lottery’s revenue and scholarship payments this fiscal year.

Month Gross Lottery Revenue Paid to Scholarships % Gross Revenue
July  $               30,925,067.43  $              5,928,447.99 19%
August                   31,571,412.10                  5,296,965.80 17%
September                   30,710,493.31                  4,317,227.10 14%
October                   32,959,739.29                  5,939,625.59 18%
November                   30,617,278.28                  5,577,035.16 18%
December                   34,507,731.54                  5,474,318.77 16%
January, 2015                   35,433,619.67                  7,287,773.28 21%
February                   41,770,314.46                  6,161,343.01 15%
March                   37,367,453.25                  6,898,524.35 18%
April                   33,866,970.54                  5,881,005.95 17%
May                   35,689,036.10                   5,409,050.48 15%
Total  $                375,419,115.97  $              64,171,317.48 17%

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