Taxpayers Still Subsidize the Arkansas Lottery’s Scholarship Fund

A state budget appropriation measure passed last months serves as a reminder that taxpayers in Arkansas are still heavily subsidizing the Arkansas Lottery’s college scholarship fund.

When voters passed the constitutional amendment legalizing the state-run lottery in 2008, Arkansans were promised that lottery ticket sales would generate $100 million per year for college scholarships.

Since then, the Arkansas Lottery has struggled to live up to those promises, and the Arkansas Legislature has continued to budget millions of dollars in taxpayer funding to supplement lottery scholarships each year.

In April the legislature appropriated $25 million for the Academic Challenge Scholarship — the scholarship that the lottery funds — for the state’s upcoming 2023-2024 budget cycle.

Even though the Arkansas Lottery makes hundreds of millions of dollars every year, relatively little money goes to students — and regular taxpayers still end up footing part of the bill for the scholarships.

Articles appearing on this website are written with the aid of Family Council’s researchers and writers.

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

Arkansas Lottery Still Banking On Expensive Scratch-Off Tickets

Over the years we have written time and again about expensive scratch-off tickets at the Arkansas Lottery — tickets that sell for $10 or $20 apiece instead of $1 or $2.

Scratch-off lottery tickets are controversial, because they are associated with problem gambling and gambling addiction.

In the past, researchers have compared scratch-off tickets to “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.

High-dollar scratch-off tickets are even more controversial, because the combination of long odds and big jackpots may encourage people to buy them out of desperation.

For example, in November of 2021 the Arkansas Lottery rolled out its “$1,000,000 Riches” scratch-off ticket.

The ticket sells for $20. The odds of winning the top prize of $1 million are approximately 1 in 800,000.

Scratch-off tickets like this one offer big payouts to people who may be living on very little money.

That means they are likely to entice people to play the lottery out of desperation in hopes of “hitting it big.”

Statistically speaking, a person who spends $20 on one of these scratch-off tickets has a two-thirds chance of losing.

Right now the Arkansas Lottery sells several varieties of scratch-off tickets for $10 and $20 each.

The vast majority of the money the Arkansas Lottery makes from scratch-off tickets pays for prizes for a handful of lottery players. Very little goes to Arkansas’ students.

As long as the Arkansas Lottery continues to operate this way, it will keep preying on the poor and desperate, and the Lottery’s scholarship funding will remain low.

Arkansas Lottery Spending Nearly 70% of Revenue on Prizes

Financial reports filed with the Arkansas Governor’s Office show the state-run lottery has spent nearly 70% of its revenue on prizes in Fiscal Year 2022.

Recent reports show the Arkansas Lottery has taken in approximately $434.6 million. Of that money, some $301.3 million went to prizes.

For perspective, the typical state-run lottery budgets approximately 60% of its revenue for prizes.

The Arkansas Lottery could pay millions of dollars more to scholarships every year if it simply would reduce its prize budget and raise its scholarship budget.

Unfortunately, the Lottery has shown little interest in doing that.

You can find recent financial reports from the Arkansas Lottery here.

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