Lottery Spends 16% of Revenue on Education, 71% on Prizes

On Friday the Arkansas Lottery released its financial report for the month of August.

The report indicates the state-run lottery made nearly $49.7 million last month, but budgeted less than $7.9 million for scholarships — about 15.8% of the Lottery’s revenue.

However, the Arkansas Lottery spent 70.5% of its money on prizes for lottery players in August; in July, 71.6% of the Lottery’s revenue went to prizes.

As we have written many times, the Arkansas Lottery spends an inordinate amount of money on prizes, compared to most state lotteries.

The average state lottery spends about 60% of its budget on prizes and 30% on education.

The Arkansas Lottery could provide millions of dollars more in scholarship funding every year if it would rework its budget to spend less on prizes and more on students.

Below is a breakdown of lottery revenue, scholarship spending, and prizes since the state’s new fiscal year began last July.

Scholarship Spending

MonthGross Lottery RevenuePaid to Scholarships% Gross Revenue

Prize Allocation

MonthGross Lottery RevenueTotal Prizes% Going to Prizes
August 49,672,105.0435,023,856.8370.5%

Arkansas Lottery Launches New Scratch-Off Tickets

The Arkansas Lottery launched five new scratch-off tickets last week.

The tickets cost anywhere from $1 – $10 each, and are part of the state-run lottery’s trend of rolling out a steady stream of new lottery games every month.

As we have said many times, these scratch-off tickets prey on poor and desperate lottery players by offering long odds on expensive tickets and big jackpot prizes.

Players who buy the lottery’s newest $10 scratch-off ticket have roughly a two out of three chance of losing their money — and the odds of winning the jackpot are a staggering one in 360,000.

Scratch-off tickets like these are controversial, because they are tied to problem gambling and gambling addiction.

A 2015 study in Canada described them as “paper slot machines.” 

A 2018 study published in the Journal of Behavioral Addictions found a link between how often a person played scratch-off tickets and the severity of a person’s gambling problem.

Despite all of this, the Arkansas Lottery relies very heavily on scratch-off tickets for revenue.

And even though lottery ticket sales have spiked this year, only a fraction of the money the Arkansas Lottery makes is going to students.

Photo Credit: Powerball and Mega Millions Lottery Billboard in Missouri by Tony Webster, on Flickr.