AR Could Get More Money with 4/10-cent Sales Tax than a Lottery

Arkansas Lottery

Here’s some sad news: The State of Arkansas could get more money for college scholarships by raising the state sales tax four-tenths of a penny than it currently “generates” with the Arkansas Lottery.

According to reports on the Department of Finance and Administration’s website, the State of Arkansas has collected roughly $1.4 – 1.6 billion annually in sales taxes since 2010. The state sales tax is currently 6.5% — meaning for every dollar you spend at the store, the state charges six-and-a-half cents in sales tax.

salestaxchartIn order to collect an additional $90 – $100 million — the amount of money lottery proponents promised Arkansas’ college students would receive — the State of Arkansas would need to charge a “whopping” four-tenths of a penny extra on each sales dollar, raising the tax rate from 6.5% to 6.9%.

Now, I am not advocating higher taxes. I think we are taxed enough as it is. But in 2009, if lawmakers had said, “We have to come up with an extra $100 million in college scholarships, and we can do it either by raising the state sales tax or by instituting a state-run lottery,” I would have told our lawmakers, “Raise the sales tax.”

Here are five reasons why: (more…)

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Lawmakers Hear Sales Pitch for “Monitor Games”

Arkansas Lottery, Casinos,

Arkansas lawmakers heard a sales pitch yesterday for “monitor games” from lottery contractor Intralot.

Intralot is an international corporation based out of Greece; they supply the Arkansas Lottery with many of its games. “Monitor games” are lottery games much like the electronic gambling you would expect to see in a casino. They typically include bingo, keno, poker, and similar games.

According to Arkansas News Bureau, the presentation for monitor games was made to the lottery’s Legislative Oversight Committee, composed of lawmakers from both houses, on Tuesday. Intralot officials claim Arkansas would be a likely candidate for “bingo” style electronic games, and that the Arkansas Lottery could see an extra $18 million a year.

Here’s the problem: These machines are just one more step in a very long, predictable pattern from the Arkansas Lottery. Every time lottery ticket sales start to sag, the Lottery rolls out some new game or gimmick to keep people buying lottery tickets. We’ve seen it since 2009.

(more…)

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Report: Lottery Still Pays 20-Cents on the Dollar for Scholarships

Arkansas Lottery

The Arkansas Lottery Commission released a report this week showing the Lottery still only allocates, at best, about 20-cents in scholarship revenue for every dollar it makes selling lottery tickets.

According to Lottery Commission reports for the month of October, the Arkansas Lottery took in $33,271,398.30 in revenue, but only paid out $6,773,936.78 in college scholarships.

Moreover, lottery officials indicated to reporters from the Arkansas Democrat-Gazette that the net proceeds may have actually been bolstered by unclaimed prize money the lottery has on hand (that is, prize money people have won but never picked up) and by the timing of recent lottery payouts. In other words, the $6.8 million may have actually been more than you might expect simply because of when the lottery happened to pay some of its bills and because a lot of people haven’t stopped by to pick up their winnings.

So let’s do the math: $6,773,936.78 / $33,271,398.30 = .2036 or 20.4%.

So for every $1 the Arkansas lottery commission made in October, about 20 cents went to college scholarships. The other 80 cents were spent elsewhere.

At this rate, the Arkansas Lottery won’t meet its scholarship goals for 2014.  (more…)

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