Arkansas Lottery Uses Predatory Advertising, Sees High Sales in Poor Counties

This week KUAR published a news piece on the Arkansas Lottery’s efforts to address gambling addiction, writing,

[T]he lottery worked to receive the Responsible Gambling Certification from the North American Association of State and Provincial Lotteries and the National Council on Problem Gambling last summer.

[Lottery Director Bishop Woosley] said the lottery finished its certification in an effort to ensure the lottery doesn’t contribute to problem gambling in the state.  

The Arkansas Lottery working to address problem gambling is a little like the tobacco industry fighting against lung cancer.

According to the article, the Arkansas Lottery tries to be “responsible” in how it designs, advertises, and sells its lottery tickets to avoid giving people the impression that the Lottery is a way to get rich quick.

However, the Arkansas Lottery uses “get rich quick” messaging in its advertisements.

Just a couple of months ago the Arkansas Lottery unveiled a new advertisement for its Millionaires Club scratch-off ticket that says, “whatever your dreams are, you could unlock them” with this lottery ticket.

Here’s the ad:

The Arkansas Lottery’s slogan is “This Is Winning.”

And the Lottery makes a point of publishing the photographs of people who win large prizes from lottery tickets.

That kind of marketing is bound to give people the impression that the Arkansas Lottery is a way to hit it big.

The Arkansas Lottery also sells the most tickets, per capita, in some of Arkansas’ poorest counties.

Here are the ten counties with the highest lottery ticket sales, per capita, in February:

ARKANSAS $536,629.50 19,019 $28.22 17.9%
MONROE $211,575.00 8,149 $25.96 26.0%
DALLAS $197,212.50 8,116 $24.30 21.3%
NEVADA $213,333.50 8,997 $23.71 21.3%
HOWARD $323,264.00 13,789 $23.44 17.3%
PRAIRIE $204,300.50 8,715 $23.44 15.8%
POINSETT $567,786.50 24,583 $23.10 23.7%
UNION $940,397.50 41,639 $22.58 18.2%
OUACHITA $571,403.00 26,120 $21.88 23.3%
JACKSON $390,018.50 17,997 $21.67 25.6%

The bottom line: If the Arkansas Lottery wants to operate responsibly, it has a very long way to go.

Image Source: YouTube screenshot.

Scholarship Funding Dismal, Prizes High at AR Lottery: February Report

Today the Arkansas Lottery released its financial report for the month of February.

The report shows the Arkansas Lottery took in over $40 million last month.

In spite of making more than a million dollars every single day, the Lottery still paid only $7.2 million to scholarships — less than 18 cents out of every dollar the Arkansas Lottery made.

All told, the Lottery is budgeting about 15.6% of its revenue for college scholarships this fiscal year.

However, the Arkansas Lottery continues to budget extraordinary amounts of money for prizes.

In February, the state lottery spent nearly 71% of its revenue on prizes.

For perspective, the typical state lottery spends about 30% of its revenue on education and only about 55% – 65% on prizes.

To put it simply: The Arkansas Lottery spends too much money on prizes and too little on scholarships.

Below is a breakdown of lottery revenue, scholarship budgeting, and prize spending so far this fiscal year.

Scholarship Funding

Month Gross Lottery Revenue Paid to Scholarships % Gross Revenue
July $41,239,173.79 $4,523,930.75 11.0%
August 40,899,086.75 4,942,736.97 12.1%
September 36,202,677.79 6,565,973.32 18.1%
October 38,932,640.23 6,318,099.21 16.2%
November 36,118,641.12 5,947,177.45 16.5%
December 46,134,469.21 6,371,983.49 13.8%
January, 2020 40,802,067.75 8,239,083.77 20.2%
February 40,670,746.71 7,233,556.77 17.8%
Total $320,999,503.35 $50,142,541.73 15.6%

Prize Budget

Month Gross Lottery Revenue Total Prizes % Going to Prizes
July 41,239,173.79 27,395,174.44 66.4%
August 40,899,086.75 27,981,278.90 68.4%
September 36,202,677.79 25,380,100.69 70.1%
October 38,932,640.23 26,836,578.14 68.9%
November 36,118,641.12 24,593,530.95 68.1%
December 46,134,469.21 32,772,295.09 71.0%
January, 2020 40,802,067.75 27,636,240.24 67.7%
February 40,670,746.71 28,772,455.23 70.7%
Total 320,999,503.35 221,367,653.68 69.0%

Arkansas Lottery Rolls Out Even More Instant Tickets

This week the Arkansas Lottery rolled out five new scratch-off tickets.

These instant tickets are in addition to the five that the Lottery unveiled last month.

The new tickets cost anywhere from $1 – $20 each.

The new tickets are:

  • 10Xtra ($1 with a top prize of $5,000)
  • 20Xtra ($2 with a top prize of $25,000)
  • 50Xtra ($5 with a top prize of $100,000)
  • 100Xtra ($10 with a top prize of $250,000)
  • 200Xtra ($20 with a top prize of $500,000)

As we have said before, scratch-off tickets 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 also found a link between how often a person played scratch-off tickets and the severity of a person’s gambling problem.

Expensive scratch-off tickets like the new $20 200Xtra ticket are especially controversial, because they encourage people to wager — and lose — large amounts of money at once.

These types of tickets prey on the poor and desperate.

They use large jackpots to entice people to play the lottery.

Players who buy scratch-off tickets will lose their money anywhere from 66% – 80% of the time.

Despite these facts, the Arkansas Lottery still relies very heavily on scratch-off tickets.

The vast majority of the money from the Arkansas Lottery’s scratch-off tickets pays for prizes for lottery players. Very little of the money funds scholarships.

To put it simply:

As long as the state-run lottery depends on scratch-off tickets and spends most of its money on prizes, it will never provide as much funding as possible for Arkansas’ college scholarships, and it will prey on Arkansans.