AR Lottery: Revenue Down, Expenses Up, and Everything is Fine?

Earlier today Family Council staff member Ken Yang attended a meeting between lottery officials and lawmakers who are on the Lottery Oversight Committee. Below are highlights from the meeting.

  • With two months remaining in the lottery’s fiscal year, the lottery is $5.9 million behind in projected revenue. In other words, sales are down.
  • 2014 net proceeds (the money that goes for scholarships) are projected at $89.5 million–millions of dollars lower than previous years.
  • The lottery has authorized “higher staff compensation” (i.e. “raises”) in its budget for fiscal year 2014.
  • MegaMillions, one of two multi-state lotteries Arkansas participates in, is going to be overhauled. In the future players can expect even worse odds than ever before on the top prizes. Too many people are winning, and the company responsible for the game thinks making it harder to win the big jackpot will cause more people to buy tickets.

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Arkansas Lottery Expecting Revenue to Decline by Millions Next Year

Last week the Arkansas Lottery Commission approved a budget for fiscal year 2014 predicting lottery revenue to decline by several million dollars.

According to an article in last week’s Arkansas Democrat-Gazette, the decline will be $21 million altogether.

Reviewing the budget approved last week reveals that revenue itself is expected to go down by more than $9 million; the 2013 budget expected lottery ticket sales to top $98.5 million, while sales for 2014 are only expected to go as high as $89.5 million.

Additionally, charts accompanying the budget indicate lottery ticket sales are down for the spring of 2013 over the spring of 2012.

All of that means less money for the scholarships the lottery is supposed to provide, and verifies what we said before: Lottery ticket sales cannot stay high forever; eventually they drop, and they drag scholarships down with them.

Proposal to Change Lottery Scholarships Draws Flak

A proposal to change lottery scholarship amounts drew a lot of flak yesterday.

Senator Johnny Key (R-Mountain Home) proposed a graduated scholarship model to make up for a shortfall in funding.

Under his proposal, college freshman would be eligible for $2,000 in lottery scholarship money; sophomores, $3,000; juniors, $4,000; and seniors, $5,000.

The proposal is driven by insufficient funding from the Arkansas Lottery coupled with the fact that 40% of college freshman who received lottery scholarships were unable to keep those scholarships the following year—they either left college or were unable to meet the minimum GPA and other requirements to keep their scholarships. Sen. Key’s proposal would reward students who meet those requirements and stay in school.

The proposal is drawing intense flak from people like former Lt. Governor Bill Halter, however, who spearheaded the effort to institute the lottery. According to an AP story, Halter told a legislative committee yesterday, “This is in no way what was described to Arkansas voters.”

Now, that is true: The Arkansas Lottery is nothing like what the people of Arkansas were promised. For instance… (more…)