One Simple Way the Arkansas Lottery Can Pay More in Scholarships

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We keep saying it over and over again: There is one simple way the Arkansas Lottery can pay out more in scholarship money. All Lottery officials have to do is increase the percentage of lottery revenue budgeted for scholarships.

As we wrote earlier this week, the Arkansas Lottery only paid 18% of its revenue last month toward college scholarships.

And for Fiscal Year 2015–which ended last June–the Arkansas Lottery paid a paltry 17.7% of its gross revenue toward scholarships.

To put these numbers in perspective, the State of Louisiana has a law on the books requiring its lottery to pay 35% of its gross revenue toward education. That’s why Louisiana’s lottery is able to make less money in lottery ticket sales than the Arkansas Lottery, but still pay out more in education funding.

Lottery officials continue to insist that if they set aside a larger percentage of gross revenue for scholarship funding, then the Lottery will have less money for prizes, marketing, and so forth; this, they say, would cause lottery ticket sales to go down, and fewer ticket sales would mean less money for scholarships.

The argument, essentially, is that by keeping the percentage of gross revenue allocated for scholarships lower than most states, Arkansas is somehow able to sell more lottery tickets and make more money for education as a result.

To show how flawed this argument is, here is a breakdown of the numbers: (more…)

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Lottery Gives 18 Cents on the Dollar to Education in July

Arkansas Lottery

Last week the Arkansas Lottery published its first financial report for Fiscal Year 2016.

The numbers reveal the Arkansas Lottery gave 18 cents of every dollar to college scholarships during the month of July. This is roughly on par with previous months from the past year; it is less than what the Arkansas Lottery allocated when it first started six years ago–roughly 21 – 22 cents of every dollar–and well below the 30 – 35 cents of every dollar the typical state lottery allocates.

All told, the Arkansas Lottery took in $31.7 million in scholarships during the month of July, and it paid $5.8 million to the state’s scholarship fund.

While it is too early to start making serious predictions, at this rate the Arkansas Lottery is set to pay out approximately $70 – $75 million in scholarships by the end of Fiscal Year 2016 next June.

Below are the specific numbers the Arkansas Lottery published for the month of July:

Month (FY16) Gross Lottery Revenue Paid to Scholarships % Gross Revenue
July, 2015 $31,665,651.14 $5,784,683.09 18.3%

For context, here are the numbers for Fiscal Year 2015, which just ended last June.

Month (FY15) Gross Lottery Revenue Paid to Scholarships % Gross Revenue
July, 2014  $30,925,067.43  $5,928,447.99 19%
August 31,571,412.10 5,296,965.80 17%
September 30,710,493.31 4,317,227.10 14%
October 32,959,739.29 5,939,625.59 18%
November 30,617,278.28 5,577,035.16 18%
December 34,507,731.54 5,474,318.77 16%
January, 2015 35,433,619.67 7,287,773.28 21%
February 41,770,314.46 6,161,343.01 15%
March 37,367,453.25 6,898,524.35 18%
April 33,866,970.54 5,881,005.95 17%
May 35,689,036.10 5,409,050.48 15%
June 33,815,559.59 8,278,928.14 24%
Total  $409,234,675.56  $72,450,245.62 17.7%

Lottery proponents continue to argue if the Arkansas Legislature requires the Lottery to set aside a minimum percentage of its gross revenue for scholarships–such as, for example, 30%–then the Lottery will have to cut prizes and advertising; that’s going to translate into fewer people buying lottery tickets, and that will mean less lottery revenue all around–and ultimately less money for scholarships.

We have demonstrated quite clearly that this argument simply does not hold up. If the Arkansas Lottery budgeted at least 30% of its gross revenue for college scholarships, it would pay out more money than it does for scholarships right now–even if lottery ticket sales plummeted by $100 million, from $410 million to $310 million.

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Report Shows Scholarship Decline from ’14 to ’15 at Arkansas Lottery

Arkansas Lottery

The Arkansas Lottery released its financial report for the month of June earlier today. As previously expected, the Arkansas Lottery allocated a little less than $72.5 million for college scholarships during Fiscal Year 2015–almost $9 million less than the “very conservative budget” lottery officials initially approved last year.

The report shows that from Fiscal Year 2014 to Fiscal Year 2015 lottery ticket sales declined by about $1.4 million, but lottery scholarship funds dropped by roughly $9 million.

Last June the Arkansas Lottery supplemented scholarship funding with $5 million from its Unclaimed Prizes account.

All told, the Arkansas Lottery spent 17.7% of its income on scholarships during the past year–down from 19.8% in Fiscal Year 2014. Below is a breakdown of lottery revenue and scholarship allocations from the past 12 months. (more…)

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