The head of the Arkansas Lottery said that it looks as if the program will raise less than forecast for college scholarships at the end of this fiscal year.
The lottery's director, Bishop Woosley, told lawmakers Thursday that despite growth in instant-ticket sales, drops in other games are reducing overall earnings this year.
Woosley said declines in "online" types of games, including the Powerball and Mega Millions games, will likely leave the state's scholarship fund $3 million short of the $78.1 million target for the end of the fiscal year, which ends June 30.
Sen. Jimmy Hickey, R-Texarkana, a vice chairman of the newly formed lottery oversight subcommittee of the Arkansas Legislative Council, said that the anticipated shortfall was unfortunate. However, it further demonstrates the need for legislative action this past session that changed scholarship eligibility requirements, abolished the once-independent Lottery Commission and placed it under state control, Hickey said.
"It appears we'll be short and we have been short, and that is what all of this is about is to try and correct the problem and get ahead of the curve," Hickey said. "It's going to take some management. ... We'll try to operate in a way that will make it efficient for that program."
In each of the past five fiscal years, the lottery has helped finance more than 30,000 scholarships.
In late February, Gov. Asa Hutchinson signed Act 218 into law, moving the 6-year-old independent Arkansas Lottery Commission under the state Department of Finance and Administration.
Hutchinson also signed Act 1105, which starting in the 2016-17 school year will reduce the amount of scholarships for first-year students and change the eligibility requirements.
Last fiscal year, lottery games raised $81.5 million in college scholarships.
After two consecutive months where total revenue fell short of last year's performance, the year-to-date funds available for transfer to the scholarship program rest at $58.7 million.
The lottery director said it's possible the lottery could see a strong finish during the remaining two months of fiscal 2015 but it's unlikely to reach $78.1 million, as originally expected.
Modest jackpots over the past several months for online ticket sales means fewer consumers are willing to pay for a ticket without a big payout, Woosley said.
With the year nearly over and proceeds trailing projections by roughly $3 million, it will be tough to hit targets. "That's a big number to close," Woosley said. "The Powerball and Mega Millions [games] are at a level where they could go on a run," Woosley said. "If we see that, we could make up some ground. If we don't, we may just levelize."
Overall lottery revenue peaked in fiscal 2012, when $97.5 million was generated for scholarships. Proceeds dropped to $90.3 million in fiscal 2013 and $81.4 million in fiscal 2014.
In the first nine months of the year, overall revenue lagged behind that seen during the same period last year, dropping from $310.7 million to $305.8 million.
The fall continued again in April, which saw the lottery take in $33.8 million in revenue, $3 million less than last April.
The lottery's year-to-date revenue fell to $339.7 million, compared with $347.3 million at the same point last year.
That drop was due to a drop in sales of draw-game tickets from $76.6 through the first 10months of last year to $61.9 million this year.
"Every single state is having significant reductions in those revenues," Woosley said. "We're talking $800 million nationwide."
Scratch-game ticket sales climbed during the first ten months of fiscal 2015 to $277.3 million, up from $270.2 million during the same period a year ago.
Despite recent declines in lottery revenue and, subsequently, scholarship funds, Woosley told lawmakers he expects proceeds to climb in fiscal 2016, in part because of cuts in operating costs and personnel.
Woosley said he expects to see a the amount of money available for scholarships reach $79.5 million next year.
After two years, and an expected third, of drops in available scholarship money, Woosley told lawmakers that he intends on hiring a consultant to come in and help "stem the reduction in revenue," a plan he said Hutchinson supported.
Metro on 05/15/2015