The Arkansas Scholarship Lottery's revenue was $40.5 million in March, an increase of $3.2 million over the same month a year ago, largely from an increase in scratch-off ticket sales, according to the agency's monthly report.
However, the amount raised for college scholarships slipped by $1.1 million compared with the same month a year ago, to $5.7 million, because of a million-dollar winning ticket.
The lottery's scratch-off revenue last month increased by $3.15 million from a year ago to $34.7 million, while its draw-game ticket revenue increased by about $50,000 to $5.8 million, the lottery reported Monday to Gov. Asa Hutchinson and the Legislature's lottery oversight subcommittee. The lottery's draw games include Powerball, Mega Millions, Natural State Jackpot, Cash 3 and Cash 4.
The lottery's scratch-off ticket sales have increased during 17 of the past 19 months and that "coincides with changes that we made in product and advertising over the last two years and with our improved retailer execution in the last year as well," lottery Director Bishop Woosley said Monday in a written statement.
"With better games, we have more and bigger winners. With more winners we have improved winner awareness which gets people's attention and brings them into the retail locations to try their luck," he said.
The lottery's net proceeds for college scholarships dropped in March from the same month in 2015 because "we had our 50th instant ticket millionaire claim their ticket in March," Woosley said.
"While those prizes are great for our players, they do have a direct impact on the proceeds we raise for scholarships. In this case, that prize reduced what we were able to raise for the month of March in proceeds. We had our 51st millionaire late last week which will also impact proceeds for the current month," he said.
The lottery started selling tickets on Sept. 28, 2009.
Along with $20 million a year in state general revenue and a $20 million lottery reserve fund used to cover temporary scholarship funding shortfalls, the lottery has helped fund more than 30,000 Arkansas Academic Challenge Scholarships during each of the past six fiscal years.
The Legislature has cut the size of the scholarships for future recipients three times.
The lottery's revenue and net proceeds have dipped each of the past three fiscal years after peaking in fiscal 2012 at $473 million and $97.5 million, respectfully.
But they're rebounded so far in fiscal 2016. That's the result of increased scratch-off ticket sales and a world-record $1.6 billion national Powerball jackpot in January that helped the lottery generate record monthly revenue of $58.7 million and record net proceeds of $13.8 million.
During the first nine months of fiscal 2016, the lottery's revenue has increased by $39.5 million over the same period in fiscal 2015, to $345.3 million. That's the largest amount of lottery revenue collected during the first nine months of a fiscal year since fiscal 2012, when it totaled $362.8 million at the same point.
So far in fiscal 2016, the lottery's scratch-off ticket revenue has increased by $21.3 million over the same period last fiscal year to $270.1 million, while the lottery's draw-game tickets have increased by $18 million over the same period last fiscal year to $74.5 million.
The lottery's other revenue includes fees paid by retailers.
During the first nine months of fiscal 2016, the lottery's net proceeds for college scholarships have increased by $7.2 million from the same period in fiscal 2015 to $60.1 million. That's the largest amount of net proceeds raised by the lottery during the first nine months of a fiscal year since fiscal 2013 when they totaled $63.2 million at this point.
The lottery also reported an unclaimed prize balance of $5.08 million as of March 31.
Act 1180 of 2011 requires that unclaimed prize money, minus $1 million, be transferred to the state Department of Higher Education's scholarship account on the last day of each fiscal year.
Woosley, who has been the lottery's director since February 2012, has projected that the lottery's revenue will be $411 million and net proceeds for college scholarships will be $79.5 million in fiscal 2016 -- up from $409.2 million in revenue and net proceeds of $72.4 million in fiscal 2015.
"We are on course to meet our budget projection for the year," Woosley said when asked.
In March, lottery consultant Camelot Global Services projected the lottery's revenue at $450 million and the lottery's net proceeds at $85 million in the current fiscal year. Camelot Global Services has offices in London and Philadelphia.
The Department of Higher Education's Arkansas Academic Challenge Scholarships distributions for the current fiscal year "are essentially complete and total $96,563,987," department Director Brett Powell said in a written statement. "If there are any adjustments they would be no more than $20-30,000."
The department handed out $99.7 million in these scholarships in fiscal 2015. The scholarship program handed out more than $100 million in these scholarships during each fiscal year from fiscal 2011-2014 with scholarships peaking at $132.5 million in fiscal 2013, according to department records.
In February, Powell told lawmakers that the department expects to hand out about $85 million in lottery-financed scholarships in the fiscal year that starts July 1 before that total rebounds to about $97 million. The projected decline in Arkansas Academic Challenge Scholarships in fiscal 2017 from fiscal 2016 is largely based on changes in the scholarship program's eligibility requirements and the sizes of the scholarships during future recipients' first year in college, according to Powell.
In March, the lottery signed off on Camelot Global Services' proposed five-year business plan that calls for the agency to deploy about 600 more terminals, hire five more employees and increase its marketing budget from $5 million to $7.9 million, among other changes.
Camelot Global Services' self-described "ambitious" plan projects ticket revenue will increase from $450 million in the current fiscal year to $615 million in fiscal 2021 and net proceeds for college scholarships will increase from $85 million in the current fiscal year to $109 million in fiscal 2021.
Under Camelot's contract, the consulting firm will receive base compensation and expense reimbursements up to $750,000 a year, but it also will be eligible for incentive compensation of at least 12.5 percent of the lottery's adjusted operating income above $72.28 million in a fiscal year. The contract also calls for Camelot to help the lottery renegotiate contracts with vendors; the savings would be used to help pay for Camelot's services. The contract will run through June 30, 2020, with options for two one-year extensions.
Camelot would be paid a total of $23.8 million from fiscal 2016 through fiscal 2021 if the lottery meets the projections outlined in the business plan, Woosley has said.
Metro on 04/12/2016