LITTLE ROCK — Sales of Arkansas lottery tickets were up $10 million in fiscal 2012 from the previous year, officials announced Monday, but it’s not clear how much of that will go toward scholarships.
Lottery officials announced unaudited annual sales of $474 million in tickets for the just-ended fiscal year, a week ahead of the official scholarship audit.
In the first 11 months of the fiscal year, the lottery brought in $88.4 million for scholarships. The amount for the full fiscal year will not be available until next week.
“I don’t want to get ahead of our financial people, but I think we’re going to see a healthy total for this year’s scholarship fund,” Lottery Director Bishop Woosley said in a news release.
In fiscal 2011, the lottery sold $464 million in tickets, with $94.2 million going toward the scholarship fund. That amount came as somewhat of a surprise. Former Lottery Director Ernie Passailaigue had originally projected the lottery would bring in $105 million for scholarships, then cut his estimate to $98 million shortly before the final actual figure came to light.
Expectations for the lottery’s performance in the 2012 fiscal year have fluctuated. Interim Director Julie Baldridge told the Legislature in December that on the basis of sales in the first five months, lottery sales were on track to total $449 million through June 30, $15 million less than last fiscal year.
She could not promise the lottery would raise more than $89 million for scholarships in fiscal 2012, she said then, but said she hoped to raise the projection if sales picked up.
In May, Woosley told the Lottery Commission that he expected the lottery to raise more than $96 million for scholarships.
“We've done a little better in the sale of our more-profitable draw tickets,” Woosley said in Monday’s statement. “Three years of experience has taught us how to best focus advertising dollars and the preferences of Arkansas players.”
According to the lottery’s figures, the share of ticket sales that came from the less-profitable instant, or scratch-off, tickets fell this year to 82.8 percent, from 84 percent in fiscal 2011 and 87 percent in fiscal 2010.
There was about $5.4 million in sales of Mega Millions tickets alone during the three days after the jackpot exceeded the record of $380 million, Baldridge said, and a third of that went directly to scholarships.
The lottery’s net proceeds of $88.4 million for the first 11 months of the fiscal year is slightly less than the $90.5 million that had been raised for scholarships in the first 11 months of fiscal 2011.
The 2012 figure is lower in part because the lottery has been setting aside money each month in anticipation of end-of-the-year charges, which it did not do last year, Baldridge said.
In fiscal 2011 and fiscal 2012 combined, the lottery has awarded 64,708 scholarships, Woosley’s statement said.
Members of the first class of scholarship recipients were awarded annual amounts of $5,000 for four year universities and $2,500 a year at two-year colleges.
Citing incorrect revenue projections, the Legislature last year cut the amounts of scholarships by 10 percent, to $4,500 for students going to four-year institutions and $2,250 for two-year institutions.
In January the leaders of the Legislature’s lottery oversight committee agreed that the Legislature shouldn’t lower the scholarship amounts for the 2012-13 school year.
Monday’s figures appear to bear out that decision, said co-Chairman Rep. Barry Hyde, D-North Little Rock. He had expected enough sales to fund between $93 million and $97 million in scholarships.
“From a scholarship standpoint, we ought to be in good shape,” he said. “We easily should have gotten past the $94 million mark, and that was really what we based our numbers on as far as setting the scholarship amount last year.”
Unless the final figures show that the lottery brough tin more than $100 million for scholarships in the 2012 fiscal year, Sen. Johnny Key, R-Mountain Home, said Monday, there will have to be discussions of changing scholarship funding.
“It would have to be somewhere over $100 million,” he said.
If the lottery again raised about $94 million for scholarships, “we would still have to look at restructuring how the scholarships are awarded, maybe changing that formula,” he said, noting that some have considered moving to a tiered approach so that students get larger scholarships every year or changing the eligibility requirements.
“It would have to be over $100 million because we’re spending $120 million right now, and that’s including the $20 million we appropriate from state funds,” he said.
Earlier this year, the state Department of Higher Education outlined scenarios in which it projected the lottery would not be able to meet scholarship obligations starting in 2014 or 2015 if its annual net proceeds are $89 million or $94 million.
In May, the Arkansas Lottery Commission approved a budget that projected the lottery will raise $98 million for scholarships in the 2013 fiscal year, which started July 1.
Both leaders of the lottery oversight committee said they think Woosley, who started as lottery director in February after serving as its chief counsel, is doing a good job.
“I think he has come in and settled the waters, which is certainly what he had hoped to do. It appears they have some good ideas moving forward on marketing and increasing sales,” Key said.
Asked whether the higher sales figures reflect the change in leadership, Hyde said: “Clearly. Leadership matters.”
Front Section, Pages 1 on 07/03/2012