The Arkansas Scholarship Lottery's revenue in April totaled $37.5 million -- an increase of $3.6 million over the same month a year ago.
The lottery raised $7.3 million for college scholarships in April and that's $1.5 million more than it raised a year ago, the lottery disclosed Tuesday in its monthly written report to Gov. Asa Hutchinson and the Legislative Council's Lottery Oversight Subcommittee.
Lottery Director Bishop Woosley said the increase in net proceeds for college scholarships in April was a result of an increase in scratch-off and draw-game ticket sales and "the cuts to expenses that we have implemented over the last year."
The lottery started selling tickets Sept. 28, 2009. It has helped fund more than 30,000 Arkansas Academic Challenge Scholarships during each of the past six fiscal years. The scholarships also are financed with $20 million a year in state general revenue and a $20 million lottery reserve account used to cover temporary scholarship funding shortfalls.
Lottery revenue and net proceeds have declined in each of the past three fiscal years, after peaking in fiscal 2012 at $473 million and $97.5 million, respectively. But they've rebounded so far in fiscal 2016.
The Arkansas Legislature has cut the size of the scholarships for future recipients three times over the past several years because proceeds fell short of initial projections and more students than initially projected received the scholarships.
The state Department of Higher Education has handed out $96.5 million in lottery-financed scholarships in fiscal 2016, said department Director Brett Powell. The department awarded $99.7 million of these scholarships in fiscal 2015 and more than $100 million during each fiscal year from 2011-2014, with scholarship awards peaking at $132.5 million in fiscal 2013.
Scratch-off sales increased by $2.4 million in April over a year ago to $30.8 million, while draw-game sales increased by $1.2 million over a year ago to $6.5 million, the lottery reported Tuesday. Other revenue includes various fees paid by lottery retailers.
Woosley said April was the 18th month during the past 20 months that the lottery experienced increased scratch-off sales.
"I believe the improvements to gaming and advertising adopted by the lottery in late 2014 are behind the surge in scratch-off sales, and lower gas prices and improved execution by our retail outlets has been a contributing factor," he said in a written statement.
Woosley said draw-game sales increased in April primarily because "of larger jackpots for Powerball and Natural State [Jackpot], which increased toward the end of the month, resulting in stronger draw-game sales."
During the first 10 months of fiscal 2016, lottery revenue has totaled $382.8 million -- up from $339.7 million during the same period in fiscal 2015. That's the largest amount the lottery has collected at this point in a fiscal year since fiscal 2012, when revenue totaled $402.2 million.
So far in fiscal 2016, net proceeds for scholarships have totaled $67.5 million -- up from $58.7 million during the same period in fiscal 2015. That's the largest amount of net proceeds collected at this point in a fiscal year since 2013, when net proceeds totaled $71.4 million.
The lottery also reported an unclaimed-prize balance of $5.16 million as of April 30.
Act 1180 of 2011 requires that unclaimed-prize money, minus $1 million, be transferred to the Department of Higher Education's scholarship account on the last day of each fiscal year.
Woosley, who has been lottery director since February 2012, projected last year that the revenue will be $411 million and net proceeds for 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 feel confident we will reach those projections," Woosley said Monday.
Woosley also has submitted projections for fiscal 2017 that forecast revenue at $473 million and net proceeds for scholarships at $80.9 million.
In November, lottery officials signed a contract with consultant Camelot Global Services to develop a business plan and help implement the plan. The consultant firm has offices in London and Philadelphia.
"As of [Tuesday], we have paid Camelot $577,305.94," Woosley said.
Under the contract, Camelot will receive base compensation and expense reimbursements up to $750,000 a year, but 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 negotiate 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 a two-year expansion.
In March, the lottery signed off on the consultant's five-year business plan that calls for the agency to set out about 600 more terminals, hire five more employees and increase its marketing budget from $5 million to $7.9 million, among other things.
Woosley said none of the changes has been implemented yet.
"We are still discussing changes and how they will be implemented, with the first wave likely to begin in the first quarter of the fiscal year," he said. Fiscal 2017 starts July 1.
Metro on 05/11/2016