Because of a drop in draw-game ticket revenue, the Arkansas Scholarship Lottery's total revenue in November was less than it was in the same month a year ago, but net proceeds -- the amount that goes toward college scholarships -- were the highest they have been since 2013, the agency reported this week.
Lottery revenue in November dipped by about $850,000 from a year ago to $36.2 million. But about $120,000 more for scholarships was raised last month than the same month a year ago as net proceeds reached $6.7 million, the lottery said in its monthly report to Gov. Asa Hutchinson and the Legislative Council's lottery oversight subcommittee.
The lack of a large jackpot with the multistate games -- such as Powerball or Mega Millions -- last month helped reduce the draw-game prize expense, retailer commissions and marketing and advertising costs. Those, coupled with a drop in administrative expenses, helped to increase the amount raised for scholarships, said lottery Director Bishop Woosley.
In November, scratch-off ticket revenue increased by about $900,000 over the same month a year ago to $30.6 million. But draw-game revenue declined by $1.7 million in the same period to $5.5 million. Other revenue included about $54,000 in fees paid by more than 1,900 retailers.
November was the first month in which the price of the Mega Millions game's tickets doubled from $1 to $2 and its starting jackpot more than doubled to $40 million. Other draw games include Powerball, Cash 3, Cash 4, the Natural State Jackpot and Fast Play.
Mega Millions ticket revenue increased from about $893,000 in November 2016 to $1 million last month, while Powerball ticket revenue declined from $3.6 million to $1.8 million in the same period, Woosley said.
"The main difference was that we [had] a Powerball jackpot of over $400 million last November that drove game sales," Woosley said in a written statement. "Otherwise, we had an excellent month of sales with instant tickets continuing to be up versus the same month last year and most of our draw games being up." Instant tickets also are called scratch-offs.
Woosley said it will take months to judge whether it was a good decision to change the Mega Millions game. The changes were made by the multistate group that manages it.
Arkansas' lottery has helped finance more than 30,000 Arkansas Academic Challenge Scholarships during each of the past seven fiscal years. During this period, the Legislature has cut the size of future scholarships three times as a result of net proceeds lagging initial projections, and more students than initially projected receiving the scholarships.
The state Department of Higher Education's latest projection is that the department will award scholarships totaling $93.3 million to 34,472 students in fiscal 2018, said Tara Smith, a deputy director at the department. Fiscal years start July 1 and end on June 30.
So far, the largest number of students to receive these scholarships in a fiscal year was the 35,303 who received $112.8 million in fiscal 2014, according to the department. The largest monetary amount handed out in a fiscal year was the $132.9 million distributed to 33,522 students in fiscal 2013.
Arkansas' lottery started selling tickets on Sept. 28, 2009.
Revenue and net proceeds peaked at $473.6 million and net proceeds for scholarships at $97.5 million in fiscal 2012 before dropping for three consecutive fiscal years. Since then, net proceeds have rebounded in the past two fiscal years to $85.2 million.
Woosley has projected revenue of $459 million and net proceeds at $83.6 million in fiscal 2018.
During the first five months of fiscal 2018, revenue totaled $198.6 million -- up from $177.5 million during the same period in fiscal 2017.
So far in fiscal 2018, net proceeds have reached $34.7 million -- up from $31.7 million during the same period last fiscal year.
Unclaimed prizes totaled $107,385 last month to increase that fund to $3.3 million as of Nov. 30. At the end of the fiscal year, the balance of the reserve fund, minus $1 million, goes to scholarships under state law.
"As of right now, we are $5,188,981 above budget for proceeds for the [fiscal] year and almost $20 million up in sales for the [fiscal] year versus budget," Woosley said.
"We are having an excellent year and hope the trend will continue for the remainder of this fiscal year," said Woosley, who has been the lottery's director since February 2012. "This is the best position we have been in versus budget at this time of year since the start-up phase."
Lottery retailers totaled 1,930 on Nov. 30 -- up from 1,926 a year ago.
Effective Aug. 1, a new law allowed retailers the option of accepting debit cards for ticket purchases. Before the law, retailers had been limited to accepting only cash for tickets.
Woosley reiterated Tuesday that the lottery cannot track debit-card purchases, so there is no way to obtain information about the exact effect of such purchases on overall sales, but it's likely the lottery will conduct a survey before the end of the fiscal year about which retailers are accepting debit cards.
A Section on 12/13/2017