August 27, 2010 | Posted in Arkansas Lottery | By

The Arkansas Lottery Commission is back to doing fuzzy math.

Last week, we told you about Lottery Spokesman Julie Baldridge’s statement that the 100 lottery vending machines they purchased cost $50,000 each.  But yesterday, Arkansas Lottery Director Ernie Passailaigue told the Legislative Oversight Committee the machines only cost $16,500 each.

The sudden change in the machines’ price tag was news to me—and, from what I could tell, to some of the legislators on the committee as well.  When they pressed Mr. Passailaigue about the change in price, Passailaigue said that Baldridge’s statement on the radio was “misinformation”.

Well, I broke down the cost of the vending machines, and I think Julie Baldridge was probably being much more honest and accurate than Passailaigue gave her credit for.

According to the costs the Lottery Director outlined yesterday, the 100 machines they purchased were $16,500 each, but the Arkansas Lottery has to pay Interlot, the company who sold them the machines, a percentage of the gross sales for each machine over the next 7 years.

When I combined the projected payments Arkansas will be doling out to Interlot with the $16,500 they paid up front, the total cost of each machine comes out to approximately $50,000.

In essence, the machines do cost $50,000 each—it’s just that the Arkansas Lottery is buying them on more of a payment plan (with a $16,500 down payment) rather than paying cash for them up front.

I will admit that I was incorrect when I said last week that the Arkansas Lottery had already spent $50,000 on each machine, but I was simply working with the numbers I heard Lottery Officials give out on the radio; if they had been more transparent in purchasing the machines, and explained to the Public in detail how they were going about paying for each one, there would have been no misunderstanding.  However, there’s no way that any lottery official can stand up and, with a straight face, say that these machines only cost $16,500.  Based on their projections, $50,000 is the cost of each machine after all the payments are made.

No one puts 10% down on a 30-year mortgage, and then tells their friends, “This house only cost me $12,000.”  We all know the real price tag on a home is the down payment plus the monthly payments.  These vending machines are no different.

It appears that Julie Baldridge was telling the truth on KARN last week.  That’s something we could use a lot more of from our lottery officials.

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.