The Arkansas Scholarship Lottery's scratch-off ticket revenue in January dropped slightly from what was collected in the same month a year ago, but draw-game ticket revenue increased, leading to total revenue of $40.8 million.
Total revenue was about $225,000 higher than what was collected in the same month a year ago.
Net proceeds, the amount raised for college scholarships, last month increased by about $390,000 over year-ago figures to $8.2 million, the lottery said in its monthly report to Gov. Asa Hutchinson and the Legislative Council's lottery oversight subcommittee.
Lottery Director Bishop Woosley said that last month produced the third-largest revenue total for a January. Net proceeds tied for third place with two other months in the lottery's history.
The lottery started selling tickets on Sept. 28, 2009, and helped finance Arkansas Academic Challenge Scholarships for more than 30,000 students in each of the past nine fiscal years. The division projects it will distribute $94.6 million to 33,315 students in fiscal 2020, which started July 1.
The amount distributed for scholarships peaked at $132.9 million in fiscal 2013; they went to 33,522 students. The total handed out dropped to $112.7 million for 35,303 students in fiscal 2014 before dropping below $100 million for each fiscal year since then, according to the state Division of Higher Education. That's largely the result of the Legislature cutting the amount of the initial scholarships three times in 10 years.
The 2017 Legislature created the Workforce Challenge Scholarship program to use excess lottery proceeds to provide up to $800 a year for students enrolled in higher-education programs that lead to them being qualified to work in high-demand occupations.
The division forecasts awarding 1,945 Workforce Challenge Scholarships totaling $1.6 million in fiscal 2020 -- up from 214 students who received about $170,000 in fiscal 2019, said division spokeswoman Alisha Lewis.
JANUARY DETAILS
Scratch-off revenue slipped from $33.5 million in January 2019 to $32.9 million last month.
But draw-game revenue increased from $7 million in January 2019 to $7.8 million last month, the lottery reported. Draw games include Powerball, Mega Millions, Natural State Jackpot, Cash 3, Cash 4, Fast Play and Lucky for Life.
Other revenue includes fees totaling nearly $49,000 paid by the 1,980 lottery retailers.
Woosley said the lottery had "a great month" on scratch-off ticket sales, but the continuous dreary, wet weather last month "likely had a negative impact as we find that people are less likely to get out and spend their money when the conditions are cold and rainy.
"In addition, we had a Powerball jackpot that exceeded the $300 million mark for the first time in quite some time this past month," he said in a written statement. "That helped boost sales and allowed us to beat January 2019 sales."
January is the seventh month of fiscal 2020.
So far in fiscal 2020, lottery revenue totals $280.3 million -- a decline from the $299.6 million collected in the same period in fiscal 2019 -- according to the monthly report.
During the first seven months of fiscal 2020, scratch-off revenue reached $234.1 million-- up from $232.1 million in the same period in fiscal 2019.
But draw-game revenue dipped from $67.1 million in the period to $45.7 million in the same period in fiscal 2020.
During the seven months of fiscal 2019, "we had several huge multi-state jackpots including a $1.5 billion Mega Millions jackpot and a $700 million Powerball jackpot," Woosley wrote. But so far in fiscal 2020, the jackpots have struggled to grow to the $200 million to $300 million levels, he said.
"As a result, we are down a combined $21 million in Powerball and Mega Million sales versus the same time last year [and] those two games account for the entire deficit between this year and last year," he said. "If you take the percentage return from those jackpot games that is allocated to scholarship proceeds, that accounts for all of the $8.7 million difference. Otherwise, we are up in almost every other product we sell this fiscal year."
Thus far in fiscal 2020, the amount raised for college scholarships totaled $42.9 million -- a decline from $51.6 million in the same period in fiscal 2019.
At the end of the fiscal year, the lottery will transfer the balance of the unclaimed prize reserve fund, minus $1 million, to college scholarships. The unclaimed prize reserve fund totaled $7.1 million as of Jan. 31, after gaining $1 million in unclaimed prize funds.
For fiscal 2020, Woosley has projected revenue of $497 million and net proceeds at $89.3 million.
"As for proceeds, we were $2.1 million over budget for January, which helped us cut the previous deficit from $3.5 million down to just over $1.4 million," Woosley said.
"Assuming [scratch-off sales] continue to be strong and hoping we get another strong Powerball or Mega Millions run, we are in good shape to meet our proceeds budget."
Some members of the Legislative Council's lottery oversight subcommittee signaled in December that they wanted to hear from lottery consultant Camelot Global Services about whether the firm has any ideas to improve the lottery's performance.
The subcommittee meets next on Feb. 20. Woosley and John Skrimshire, Camelot Global Services' vice president of commercial operations, are to give an update on the business plan by Camelot and the lottery, according to the General Assembly's website.
COMPETITION
Asked about the impact of the state's casinos and the start of the Mississippi lottery in November on the Arkansas lottery, Woosley said that based on ticket revenue in certain counties, the casino in Jefferson County "is having some impact" and the Mississippi lottery "has probably [had] some negative impact on border sales."
The revenue last month from sales in Chicot County declined by $62,272, or 20% compared with a year ago, to $245,400, while revenue dipped by $49,250, or 16%, to $253,270 in Phillips County and by $8,546, or 1% to $769,372, in Crittenden County, according to lottery records.
Total revenue in January from sales in Jefferson County declined by $250,843, or 14%, from a year ago to $1.58 million, while total revenue from sales in Garland County increased by $45,263, or 3%, to $1.35 million, records show.
Racetracks in Hot Springs and West Memphis have expanded to full-fledged casinos under Amendment 100 to the Arkansas Constitution approved by voters in November 2018.
The Saracen Casino Resort in Pine Bluff has 300 slot machines at the Saracen Casino Annex. An 80,000-square-foot casino with 2,000 slot machines is planned to open across the street by June.
Metro on 02/12/2020