In 2009 Arkansas rolled out a state-run lottery to fund college scholarships.
Here in no particular order are a few facts about the state’s lottery scholarship program.
The State Lottery Has Never Delivered on Its Promised $100 Million Per Year for Scholarships
Back in 2008 then-Lt. Governor Bill Halter promised Arkansans that a state-run lottery could provide $100 million per year every year in college scholarship funding.
However, to date the Arkansas Lottery consistently has fallen short of that promise.
Only a Fraction of the Arkansas Lottery’s Revenue Goes to Scholarships
One reason the Arkansas Lottery has failed to provide $100 million in scholarship funding is that only a fraction of the state’s lottery revenue actually goes to scholarships.
Most of the money pays for lottery prizes.
So far this fiscal year, the Arkansas Lottery has given college students about 14-15 cents out of every dollar it has made.
About 69 cents out of every dollar has been spent on prizes for people who buy lottery tickets.
For perspective, the average state lottery spends about 30% of its revenue on education and allocates much less than Arkansas does for prizes.
Lawmakers Have Been Forced to Reduce and Restructure the Lottery Scholarship to Deal With Shortfalls
In 2009, Arkansas’ lottery-funded scholarship gave $2,500 to college freshmen; $2,750 to sophomores; $3,000 to juniors; and $3,500 to seniors.
The Arkansas Legislature later restructured the scholarships to deal with a shortfall in funding from the state lottery. The scholarship amounts were changed to $2,000 for freshmen; $3,000 for sophomores; $4,000 for juniors; and $5,000 for seniors.
In 2015 the Arkansas Legislature had to restructure the scholarships once again — this time to $1,000 for freshmen; $4,000 for sophomores and juniors; and $5,000 for seniors.
Arkansas Taxpayers Still Subsidize the Lottery Scholarship
Many Arkansans do not realize that since the Arkansas Lottery passed in 2008, the Arkansas Legislature has continued to budget millions of dollars in taxpayer funding to supplement the lottery scholarship each year.
Last year the legislature gave the Academic Challenge Scholarship — the scholarship that the lottery funds — $25 million.
That’s a fairly typical amount.
Even though the Arkansas Lottery makes hundreds of millions of dollars every year, very little money goes to students — and regular taxpayers still end up footing part of the bill for the scholarships.