Lottery Ticket Sales Surge Amid Pandemic

According to KATV news, Arkansans have spent $17 million on state lottery tickets in the past seven weeks.

Lottery ticket sales have surged in the wake of the COVID-19 pandemic.

Lottery officials say the uptick in sales could be the result of lower gas prices, closure of the casinos during the pandemic, and simply boredom.

However, our office recently analyzed weekly sales from the Arkansas Lottery, and it appears that lottery ticket sales in Arkansas rose after Arkansans began receiving economic stimulus checks from the federal government.

In other words, there’s a very good possibility Arkansans have been spending their unemployment checks and federal stimulus money on lottery tickets.

Here are five points worth remembering about the Arkansas Lottery:

The bottom line: The Arkansas Lottery preys on the poor and desperate, and it has failed time and again to live up to its promises.

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

Here’s The One Thing the Arkansas Lottery Can Do to Increase Scholarship Funding by Millions

For more than a decade we have written about how the Arkansas Lottery fails to make college scholarship funding a priority.

The Arkansas Lottery has one of the highest prize budgets of any state lottery in America.

At the same time, it budgets far less for education than the typical state lottery does — and far less than it is capable of budgeting.

So far this fiscal year, the Arkansas Lottery is spending about 16% of its revenue on college scholarships and about 70% of its revenue on prizes.

That means if the Arkansas Lottery takes in $450 million this fiscal year, its scholarship and prize budget will look something like this:

Gross Revenue Scholarships Prizes
$450,000,000.00 $72,000,000.00 $315,000,000.00

The Arkansas Lottery can boost its scholarship funding by several million dollars. All it has to do is decrease its prize budget and spend that money on scholarships instead.

The typical state lottery spends closer to 60% of its gross revenue on prizes.

If the Arkansas Lottery reduced its prize budget from 70% of its revenue to 60%, it could increase its scholarship budget to 25% if its gross revenue.

If the Arkansas Lottery did that, here’s how much money it could pay to college scholarships, assuming the Lottery took in $450 million in a year:

Gross Revenue Scholarships Prizes
$450,000,000.00 $112,500,000.00 $270,000,000.00

But Lottery officials have said for years that if they cut prizes and increase scholarship funding, fewer people will buy lottery tickets, and lottery sales will drop.

That has not been the case in other states, but let’s assume that did happen in Arkansas.

Here’s what Arkansas’ scholarship funding would look like if the Lottery raised its scholarship budget to 25% of its gross revenue — even if lottery ticket sales dropped:

Gross Revenue Scholarships Prizes
$450,000,000.00 $112,500,000.00 $270,000,000.00
$400,000,000.00 $100,000,000.00 $240,000,000.00
$350,000,000.00 $87,500,000.00 $210,000,000.00
$300,000,000.00 $75,000,000.00 $180,000,000.00

By budgeting 25 cents out of every dollar for college scholarships instead of 15 – 16 cents out of every dollar, the Arkansas Lottery would be able to spend millions of dollars more on Arkansas’ students — even if lottery ticket sales plummeted by $150 million.

There is really no excuse for the Arkansas Lottery to be stingy when it comes to funding college scholarships.

All the Arkansas Lottery has to do is simply spend less on prizes and more on education — just like other states do.

Lottery Budgets Little for Scholarships Despite Best Month All Year

On Monday the Arkansas Lottery released its financial report for the month of April.

The report shows the Arkansas Lottery took in more than $49.5 million last month — the best month the Arkansas Lottery has had since March of 2019.

In spite of this, the Lottery budgeted only $8.3 million for college scholarships — less than 17 cents of every dollar the Lottery made.

For perspective, the typical state lottery budgets about 30 cents out of every dollar for education.

The report also reveals the Arkansas Lottery spent 71.5% of its revenue on prizes last month.

That’s one of the highest prize budgets of any lottery in the nation.

There’s a very real possibility that the COVID-19 economic stimulus was part of the reason the Arkansas Lottery saw such an uptick in sales.

The Arkansas Lottery’s instant ticket sales were up by $2 million in April compared to March and $9 million compared to February.

As we wrote last week, it seems like more than a coincidence that the Lottery’s scratch-off ticket sales would surge at about the same time that Arkansans started receiving economic stimulus checks from the federal government.

Right now the Arkansas Lottery is on track to pay out about $80 – $85 million for college scholarships this fiscal year — far less than the $100 million per year that Arkansans were promised in 2008.

Below is a breakdown of Arkansas Lottery ticket sales and scholarship funding so far this fiscal year.

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%
March 47,876,969.85 7,386,497.30 15.4%
April 49,549,754.16 8,318,312.64 16.8%
Total $418,426,227.36 $65,847,351.67 15.7%

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