The Arkansas Scholarship Lottery commission Wednesday voted unanimously to authorize the agency director to pursue a change in law that would allow retailers to accept debit cards for lottery purchases.
Lottery director Bishop Woosley recommended retailers be allowed to take debit cards because it would likely provide some sales bump and because lotteries across the country are moving toward non-cash transactions. But doing so, he said, would likely require a change in state law, so approaching the legislature with the issue seems like the best next step.
"The next general session, I think they would correct me if I was wrong" and declared it legal under existing law, Bishop told a commission subcommittee earlier Wednesday. "And I think they would correct me with extreme prejudice. I think we need to err on the side of caution."
The lottery statute says tickets can be sold for "cash." At issue is whether a debit card can be considered the same as cash or if allowing their use would require a change in the law.
The vote came on the same day the commission received a focus group study that included questions on debit card use and letters from some retailers opposed to the idea.
David Johnson, who operates three convenience stores in Northwest Arkansas, said in a Jan. 23 letter to a lottery official that the 1.25 percent to 3.5 percent charged for debit transactions would "cut deeply into retailer profit."
"Allowing this would be a disaster for retailers," he wrote.
Commission members stressed that authorizing Woosley to seek a change in the law was a first step and not the final decision on whether debit cards would be allowed or, if so, how it would be set up.
"We recognize our retailers as valued partners," commissioner Doug Pierce said. "We don't want to do anything to harm them. And our ultimate goal is to find middle ground and a solution that works for both of us."
Woosley said the lottery is "sympathetic" to the retailer concerns, but said there are ways to make it work. Thirty-seven lotteries across the country accept debit cards, he noted.
"I think [retailers] understand business decisions," he said. "And we'll make the best of it with them if this is ultimately approved."
Also Wednesday, Woosley reported lottery net proceeds for scholarships were down in February from a year earlier.
He offered commissioners an overview of the February figures after the commission convened at 10 a.m., saying the declining figures were based in part on bad weather and a winner who claimed a big prize.
A copy of Woosley's report shows net proceeds for scholarships were about $5.9 million in February, down 8.3 percent from more than $6.4 million in February 2013.
Instant or scratch-off ticket sales were down 15 percent over that same span from nearly $36.4 million to about $30.9 million. Online tickets, which include Powerball and Mega Millions, increased almost 47 percent from nearly $5.5 million to more than $8 million this February.
The commission voted in February to revise downward its projected net proceeds for the current fiscal year from $89.5 million to about $82.8 million.
Woosley's report shows the $5.9 million in February net proceeds were off 18.7 percent from the revised budget of nearly $7.3 million for the month. Instant ticket sales were slightly higher than projected, while online tickets were down slightly from budget in February.
Woosley said a series of winter weather events coincided with four instant game launches, leading to a decline in those sales. And, he said, a Little Rock player who claimed a $1 million scratch-off winner negatively affected the month's bottom line.
"A million-dollar winner is always good for winner awareness," he said. "On the other hand, we have to put it on our books and account for it."