Lottery Scholarship Proceeds Slip to 15% as Revenue Increases in May

Arkansas Lottery

The Arkansas Lottery has released its financial summary for the month of May. The report shows lottery revenue increased by more than $1.8 million from April to May.

Despite this increase in revenue, scholarship proceeds dropped by nearly $472,000–falling to $5.4 million or 15% of the Lottery’s revenue for the month.

All told, the Arkansas Lottery has taken in $375,419,115.97 since July 1, 2014, but it has only paid out $64,171,317.48 in scholarship money–17% of the Lottery’s overall revenue for the year.

The Arkansas Lottery’s fiscal year closes at the end of this month. Looking at the numbers, it appears the Arkansas Lottery likely will pay out between $70 and $76 million in scholarships this fiscal year–about 17% – 18% of its gross revenue.

Below is a breakdown of the Lottery’s revenue and scholarship payments this fiscal year.

Month Gross Lottery Revenue Paid to Scholarships % Gross Revenue
July  $               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%
Total  $                375,419,115.97  $              64,171,317.48 17%

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Lottery Scholarship Proceeds Drop in April

Arkansas Lottery

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

According to the summary, the Arkansas Lottery took in roughly $33.9 million in April, and paid out $5.9 million–about 17% of its gross revenue–for scholarships.

Scholarship funds were down by more than $1 million from March, when the Lottery allocated $6.9 million for college scholarships.

Since July 1, 2014, the Arkansas Lottery has sold roughly $339.7 million worth of tickets, and has allocated $58.8 million for scholarships–again, about 17% of its revenue.

At this rate, the Arkansas Lottery ought to finish Fiscal Year 2015 with $71 – $75 million in its college scholarship fund–significantly less than the $81.2 million lottery officials initially budgeted for scholarships this year.

You can see a full breakdown of lottery revenue and scholarship allocation for Fiscal Year 2015 below.

Month Gross Lottery Revenue Paid to Scholarships % Gross Revenue
July $30,925,067.43 $5,928,447.99 19.2%
August 31,571,412.10 5,296,965.80 16.8%
September 30,710,493.31 4,317,227.10 14.1%
October 32,959,739.29 5,939,625.59 18.0%
November 30,617,278.28 5,577,035.16 18.2%
December 34,507,731.54 5,474,318.77 15.9%
January, 2015 35,433,619.67 7,287,773.28 20.6%
February 41,770,314.46 6,161,343.01 14.8%
March 37,367,453.25 6,898,524.35 18.5%
April 33,866,970.54 5,881,005.95 17.4%
Total $339,730,079.87 $58,762,267.00 17.3%

 

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State Starts with Minimal Cuts to Lottery Expenses

Arkansas Lottery

According to an article published in today’s Arkansas Democrat-Gazette, the Department of Finance and Administration is starting with minimal cuts to expenses at the Arkansas Lottery.

According to the article, DFA has eliminated 6 staff positions totaling roughly $400,000 in salary costs.

Of course $400,000 sounds like a lot of money, but consider this: The Arkansas Lottery hopes to allocate around $78,000,000 for college scholarships this year; however, ticket sales have continued to struggle, and the Arkansas Lottery is giving less than 19% of its gross revenue to the scholarship fund.

Even if DFA gives all $400,000 to the scholarship fund, that amounts to a 5% increase in scholarship dollars at best.

This year, the Arkansas Lottery plans to spend $6.45 million on salaries and benefits, and roughly $338.5 million total. Reducing salary expenses by $400,000 represents a savings of only 6.2% on staff compensation, and it amounts to a little over 0.1% of the Lottery’s overall expenses.

While we are glad the Arkansas Lottery Commission has been abolished and Lottery operations are merging with the Department of Finance and Administration, the average state lottery allocates 30% – 35% of its gross revenue for things like education or scholarships; Arkansas is allocating less than 19%.

Eliminating costs and redundancies at the Arkansas Lottery may be a step in the right direction, but it’s probably going to take more significant measures to turn the Arkansas Lottery into even an “average” program.

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