With gas prices higher than a year ago, the Arkansas Scholarship Lottery’s revenues in March dropped from a record level reached a year ago for any month.
The lottery’s total revenues in March dropped from $67.9 million a year ago to $54.9 million, and the amount raised for college scholarships slipped from $8.3 million a year ago to $7.4 million last month, the lottery reported this week in its monthly report to Gov. Asa Hutchinson and the Legislative Council’s lottery oversight committee.
The lottery’s revenues in March were $5.7 million higher than the lottery’s budget, while the amount raised for college scholarships lagged the budget by $319,636, said lottery Chief Fiscal Officer Jerry Fetzer.
The lottery started selling tickets Sept. 28, 2009.
It’s helped raise money for Arkansas Academic Challenge Scholarships for more than 30,000 students during each of the past 11 fiscal years, though the number of Academic Challenge Scholarships awarded this fiscal year may fall short of that 30,000-student mark for the first time.
The lottery’s $67.9 million in revenues in March 2021 remains the lottery’s record for any month, lottery Director Eric Hagler said Tuesday. A year ago, Hagler said federal stimulus money, a change in the tax deadline and the re-opening of the larger economy likely served to boost lottery ticket revenues.
The $13.8 million raised for college scholarships in January 2016 continues to be the high-water mark for net proceeds in any month for the lottery. In January 2016, the lottery’s ticket sales were fueled by a $1.6 billion Powerball jackpot.
In March, the lottery’s scratch-off ticket revenues dropped from $59.7 million a year ago to $47.3 million, while the lottery’s draw game revenues declined from $8.1 million a year ago to $7.4 million, according to the lottery’s reports. The lottery’s draw games include Powerball, Mega Millions, Fast Play, Natural State Jackpot, Lucky For Life, Cash 3 and Cash 4.
Lottery Gaming Director Mike Smith pointed out Tuesday the lottery averaged more than $1.92 million per day in scratch-off revenue in March 2021.
“We knew that post-pandemic revenue would dip, and our budget forecast for March 2022 reflected our belief,” he said in a written statement.
“We forecast sales at $42,000,000; in fact, we beat our forecast and booked $47,300,000 in instant revenues for March 2022,” Smith said.
The lottery’s scratch-off tickets are also called instant tickets.
Lottery Sales Director Mark Hearn said increased prices at the gas pump weighed on consumer discretionary spending and played a role in the decline in ticket sales.
A month ago, the rising price of gasoline had some lottery players planning on slicing their lottery ticket purchases, with some players fearing the cost would rise to $5 per gallon soon. The price of gasoline has dropped slightly since then.
A year ago, the statewide gas price average was $2.67 for a gallon of regular unleaded fuel, according to the AAA..
The statewide gas price average in Arkansas is $3.70 for a gallon of regular unleaded fuel compared to $3.90 a gallon a month ago, the AAA reported Tuesday. That’s short of the state’s highest gas price average of $3.97 for a gallon of regular unleaded fuel July 17, 2008.
Smith said the lottery’s draw-game revenues in March declined from a year ago because jackpots for Powerball, Mega Millions and the Natural State Jackpot were higher in March 2021, which created a slight drag on sales last month.
“Simply put, as jackpots grow, sales follow,” Smith said.
FISCAL 2022
March is the ninth month of fiscal 2022.
During the first nine months of fiscal 2022, the lottery’s revenues totaled $434.6 million, down from $456 million during the same period in fiscal 2021.
So far in fiscal 2022, scratch-off revenues total $358.7 million — a decline from $378.1 million from the same period in fiscal 2021 — while draw-game ticket revenues total $75.3 million — a slight slip from $77.4 million from the same period in fiscal 2021, according to the lottery’s reports.
During the first nine months of fiscal 2022, the lottery has raised $69.3 million for college scholarships, down slightly from $71.6 million from the same period in fiscal 2021.
The lottery’s unclaimed prize reserve fund totaled $7.2 million at the end of March, after receiving $1.1 million in unclaimed prizes.
At the end of the fiscal year, the lottery transfers the balance of the unclaimed prizes reserve fund minus $1 million to college scholarships.
In late January, Hagler warned state lawmakers that the next three months would be challenging because the lottery had “absolutely record-setting months” during the same months last year because “when you are lapping year after year it is very difficult to run that kind of horsepower consistently through every month.” For fiscal 2022, Hagler has projected total revenue of $509.2 million, which would be a drop from the record of $632.5 million in fiscal 2021, and the amount raised for college scholarships at $88.6 million, a decline from $106.6 million a year ago.
Lottery officials attributed the records set in fiscal 2021 in part to factors brought on by the covid-19 pandemic, such as people spending time at home.
For fiscal 2022 so far, Hagler said the amount raised for college scholarships is $8.7 million higher than the lottery’s budget, and unclaimed prizes are $891,412 higher than budgeted.
“This results in current total proceeds of $9,644,813 better than budget,” he said. “And, while we do not predict a record-setting performance two years in a row, we are very, very pleased with lottery performance and consumer appetite for our products.”
SCHOLARSHIPS
The Arkansas Academic Challenge Scholarship is financed with the lottery’s net proceeds along with $20 million a year in general revenue.
The state Division of H i g h e r Ed u c at i o n h a s awarded those scholarships to 27,897 students and disbursed $73.4 million so far in fiscal 2022, said division spokeswoman Alisha Lewis.
The division forecasts that it will hand out $90 million in these scholarships to 31,000 students in fiscal 2022, after awarding about $86 million a year ago.
Asked if the division expects the number of students awarded Academic Challenge Scholarships to be below 30,000 in fiscal 2022, Lewis said in a written statement, “I think we will be closer than the 27k but yes, it could be less than 30k.
“Declining enrollment always affects these numbers, but we also have students who have deferred Arkansas Scholarship Lottery when they receive other aid like ArFuture,” she said.
The amount handed out for Academic Challenge Scholarships peaked at $132.9 million in fiscal 2013, going to 33,353 students. Scholarship totals have dropped largely because the Legislature cut the amount of initial awards several times.
The 2017 Legislature created the Workforce Challenge Scholarship to use excess proceeds to provide up to $800 a year for students enrolled in programs that lead to qualifications in high-demand occupations.
So far in fiscal 2022, the division has awarded those scholarships to 2,730 students and disbursed $421,644, Lewis said. Division officials have said they expect to distribute $450,000 for these scholarships in fiscal 2022, compared to $487,865 a year ago.
The 2019 Legislature created the 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 certain programs.
For the Concurrent Challenge Program, the division has awarded scholarships to 12,378 students and disbursed $1.9 million so far in fiscal 2022, Lewis said. For fiscal 2022, the division projects distributing $2.7 million in these scholarships to 13,000 students, compared with $2.4 million to 14,091 students a year ago.