From July 1 through November 30, 2014, the Arkansas Lottery earned an average of $11.86 every second–but the Lottery is still failing.
According to financial reports published on the Arkansas Lottery’s website, the lottery earned roughly $156.8 million in gross revenue during the first five months of its fiscal year that began last July. That’s an average of $1 million every day! However, lottery revenue is still more than $7 million behind budget.
Even more concerning, the Lottery is more than $2.5 million behind in scholarship funding for the year, and appears–once again–to have reduced the percentage of gross revenue paid out for scholarships.
| Month | Gross Lottery Revenue | Paid to Scholarships | % Gross Revenue |
| July | $30,925,067.43 | $5,928,447.99 | 19.2% |
| August | 31,571,412.10 | 5,296,965.80 | 16.8% |
| September | 30,710,493.31 | 4,317,227.10 | 14.1% |
| October | 32,959,739.29 | 5,939,625.59 | 18.0% |
| November | 30,617,278.28 | 5,577,035.16 | 18.2% |
| Total | $156,783,990.41 | $27,059,301.64 | 17.3% |
According to the Lottery’s budget for the year, lottery revenue ought to be closer to $164 million by now, and college scholarship funding should be around $29.6 million.
Lottery revenue is 4.4% behind budget, but college scholarship funding is 8.7% behind budget, and the percentage of gross revenue being allocated for scholarships down at the Lottery Commission has plummeted to new lows.
Last September we speculated that the Arkansas Lottery would reduce the percentage of gross revenue it allocates for college scholarships from 19.8% to to 18.76%. That was a rather bleak prediction, but it looks like even we may have been little overly-optimistic. At the rate things are going, the Arkansas Lottery will do well to set aside even 18% of its revenue for scholarships.
For Fiscal Year 2015, the Arkansas Lottery Commission hopes to bring in about $416,770,000 and pay out about $78,185,000 in scholarships. Looking at these numbers, however, it appears the Arkansas Lottery may earn around $374 million in gross revenue, and it may only pay out between $64.5 and $67.5 million. Scholarship funding may come up short by $10 million or more this year compared to initial budget predictions.
There’s no doubt lottery ticket sales are struggling, but the Lottery’s strategy of reducing scholarship funding every time ticket sales take a dip doesn’t make sense. We do not know of any lottery in the nation that sets aside a lower percentage of revenue for education than the Arkansas Lottery has set aside for scholarships since last summer.
The Louisiana State Lottery is required by law to set aside at least 35% of lottery revenue for education. That’s why Louisiana’s lottery can take in less money, but still pay out more for education than Arkansas’. The Arkansas Lottery is not required to budget a minimum percentage of gross revenue for scholarships, and the results speak for themselves: Scholarship funding is dropping.
The Arkansas Lottery is literally a million-dollar-a-day operation, and it’s still failing to deliver on its promises. This simply proves once again what we have been saying for years: The problems at the Arkansas Lottery Commission are more than simply revenue. It’s the Lottery’s priorities.
