From 2010 through 2013, the average state lottery paid out approximately 29% of its gross revenue to the state for education funding, scholarships, or other purposes. During that time the Arkansas Lottery only paid out 20.5% – 21.6%–roughly 8% – 9% below the national average.
This is based on research we have assembled this year. We have reviewed annual reports from every state lottery for fiscal years 2010, 2011, 2012, and 2013. The findings are not good for Arkansas.
While each state has different populations and different income levels, each state lottery ought to operate on roughly equal principles. A “successful” lottery in New York may sell more lottery tickets than a lottery in Oklahoma, but the profit margins and percentage of revenue allocated for education or other purposes ought to be roughly the same across the board.
If we look at the numbers, we see the New York Lottery transferred about 34% of its gross revenue to the state each year from 2010 to 2013; the Oklahoma Lottery transferred 35%; Louisiana transferred 35% – 36%; but the Arkansas Lottery transferred a paltry 20.5% – 21.6%.
In fact, Arkansas was third from the bottom nationwide in average transfers to the state from 2010 – 2013. Only two states–Massachusetts and Minnesota–transferred a smaller percentage of gross revenue, on average, to their states than Arkansas.
Now to be fair, our statistics omit three states: Illinois no longer publishes annual financial reports for its lottery, so we were unable to compile accurate figures for it; because of the way South Dakota reports its video lottery ticket sales, its financial reports give the (false) impression the state is receiving upwards of 70% or more of lottery ticket sales (the actual percentage is much less); and Kansas operates casinos under its state lottery, but does not appear to transfer casino revenue to state education funds; what money is transferred comes from traditional lottery ticket sales; because the lottery reports casino revenue as part of its gross revenue, it is difficult to determine what percentage of lottery revenue is actually being transferred to the state. Even with these states factored in, however, the statistics would not be much different for Arkansas. Arkansas’ lottery would still be in the bottom tier.
This January the Arkansas Legislature will weigh whether or not the Arkansas Lottery ought to be able to run so-called “monitor games” in Arkansas. Requiring the Arkansas Lottery to set aside a minimum percentage of gross revenue for education (the way Louisiana does) might be something worth looking into at the same time.
Jerry is the founder and president of Family Council. He began Family Council in 1989 after a successful effort to amend the Arkansas Constitution to prevent the use of public funds for abortions. He and his wife reside in Little Rock. They have four sons.