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Big jackpots boost state's lottery to biggest haul in 11 years

by Michael R. Wickline | February 12, 2021 at 7:05 a.m.
Arkansas Scholarship Lottery tickets are shown in this file photo.

Bolstered by ticket purchases for a $1 billion Mega Millions jackpot and a $730 million Powerball jackpot, the Arkansas Scholarship Lottery's revenue in January totaled $62.9 million to set a record for any month at the 11-year-old lottery.

The haul in January eclipsed the previous highs of $61.1 million in May and $58.7 million in January 2016, said Scott Hardin, a spokesman for the state Department of Finance and Administration, which oversees the lottery.

The lottery last month also raised $10.9 million for college scholarships, but that fell short of the record amount raised in any January -- and for that matter, the record for any month in the lottery's history -- $13.8 million in 2016, Hardin said.

In January 2016, ticket purchases were fueled by a $1.6 billion Powerball jackpot.

The lottery reported its January figures Wednesday in its monthly report to Gov. Asa Hutchinson and the Legislature's lottery oversight subcommittee.

It started selling tickets on Sept. 28, 2009, and has helped finance Arkansas Academic Challenge Scholarships for more than 30,000 students in each of the past 10 fiscal years.

The lottery revenue of $62.9 million in January far exceeded the $40.8 million in January 2020.

"We continue to see strong sell-through across the entire game portfolio," said lottery Director Eric Hagler.

Scratch-off ticket revenue remains strong, he said.

"Limited entertainment options are one factor in driving sales, but we also believe we have rolled out an exciting roster of instant and draw games for our players," Hagler said in a written statement. Scratch-off tickets also are called instant tickets.

In January, scratch-off revenue increased from $32.9 million a year ago to $42.6 million, while draw-game revenue increased from $7.8 million a year ago to $20.2 million, the lottery reported Wednesday.

Revenue also includes fees paid by retailers. These fees were nearly $59,000 in January, compared with nearly $49,000 a year ago. There were 1,962 retailers on Jan. 31, a decline from 1,980 a year ago.

The draw-games include Mega Millions, Powerball, Natural State Jackpot, Cash 3, Cash 4, Fast Play and Lucky for Life. Draw-game ticket revenue is more profitable than scratch-off ticket revenues.

In January, the lottery's Mega Millions revenue increased from $1.4 million from a year ago to $8.1 million, while its Powerball revenue increased from $3 million a year ago to $7.2 million.

Lottery marketing and communications director Donna Bragg tweeted that the agency sold $1.5 million in Mega Millions tickets on Jan. 22 before that day's drawing, when a ticket purchased in Michigan matched all the numbers to win the $1 billion jackpot.

Fast-Play was the Arkansas lottery's third most popular draw game last month. Its revenue increased from $1.2 million a year ago to $2 million.

The $10.9 million that the lottery raised for scholarships last month beat the $8.2 million raised a year ago.

"Net proceeds is a complex figure but, in very general terms, it typically tracks sales -- but not always," Hagler said.

"For January 2021, strong sales were the overwhelming driver for delivering strong net proceeds."

January is the seventh month of fiscal 2021, which started July 1, 2020, and ends June 30.

During the first seven months of fiscal 2021, total revenue reached $346 million -- up from $280 million at the same time in fiscal 2020.

So far in fiscal 2021, scratch-off revenue totals $282.9 million and draw-game revenue is $62.6 million. That's up from $234.1 million and $45.7 million, respectively, during the same period in fiscal 2020.

During the first seven months of fiscal 2021, the lottery has raised $57.6 million for scholarships, an increase over the $42.7 million raised at the same time in fiscal 2020.

Through the end of January, the unclaimed prize reserve fund held $4.7 million, after collecting $846,005.82 in unclaimed prizes last month.

At the end of each fiscal year, the unclaimed prize fund balance minus $1 million is transferred to college scholarships.

For fiscal 2021, former lottery Director Bishop Woosley projected revenue at $465.8 million and the amount for scholarships at $78.2 million during what he called in May a "a great deal of uncertainty in the lottery world and the world in general."

Hagler said, "We anticipate exceeding budget, but our forecast continues to account for worldwide uncertainty regarding the post-pandemic environment."

In fiscal 2020, lottery revenue reached $532 million to set an annual record, while $89.4 million was raised for scholarships, which was the sixth-largest in the lottery's history. The record amount raised for scholarships is $98.6 million in fiscal 2019.

Woosley attributed the drop in scholarship proceeds in fiscal 2020 to poor sales for Mega Millions and Powerball tickets.

SCHOLARSHIPS

So far in fiscal 2021, the Arkansas Division of Higher Education has spent $47.3 million on Arkansas Academic Challenge Scholarships, $1.6 million on Concurrent Challenge Scholarships and $406,265 on Workforce Challenge Scholarships, said division spokeswoman Alisha Lewis.

"Most awards have NOT been paid for the spring semester," she said in a written statement. "NONE of the concurrent roster has been paid for the spring. That is only Fall 2020."

The division has projected that it will distribute $91 million in Academic Challenge Scholarships to 31,000 students in fiscal 2021. It distributed $90.6 million in Academic Challenge Scholarships to 31,649 students in fiscal 2020. These scholarships are financed with lottery proceeds and $20 million a year in state general revenue.

The total amount of Academic Challenge Scholarships peaked at $132.9 million in fiscal 2013, going to 33,353 students. The total amount of that scholarship's dollars awarded has dropped since then largely because the Legislature cut the amounts of the initial scholarships.

The 2017 Legislature created the Workforce Challenge program to use excess lottery proceeds to provide up to $800 a year for students enrolled in programs that lead them to being qualified for high-demand occupations.

The 2019 Legislature created the lottery-financed Concurrent Challenge program. High school juniors and seniors are eligible to receive the scholarships for a semester or an academic year in which they are enrolled in an endorsed concurrent course or certificate program under certain conditions.

In advance of this year's regular session, Division of Higher Education Director Maria Markham has promoted the idea of creating a need-based scholarship program called Challenge Plus financed with excess lottery proceeds. Legislation to create the program hasn't been introduced yet.

Lottery revenue in January
Lottery revenue in January
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