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Arkansas lottery officials anticipate adding new $2 draw game later this year

September start planned for draw game Arkansas Lotto by Michael R. Wickline | May 23, 2022 at 6:53 a.m.
Sekoiyn Phillips, a Corner Store cashier, pulls lottery scratch off tickets for a customer Wednesday, May 12, 2021 at the Corner Store on Stagecoach Road in Little Rock.. (Arkansas Democrat-Gazette/Staci Vandagriff)

Arkansas Scholarship Lottery officials expect to begin selling a new draw game called the Arkansas Lotto later this year.

Lottery Director Eric Hagler said the new draw game is tentatively scheduled to begin in mid- to late September, but the game remains in testing and the time frame "could be pushed out."

The last draw game added to Arkansas' lottery was the Natural State Jackpot, which launched in October 2012, said Scott Hardin, a spokesman for the state Department of Finance and Administration, under which the lottery operates.

The lottery started selling tickets Sept. 28, 2009, and has helped finance Arkansas Academic Challenge scholarships for more than 30,000 college students during each of the past 11 years.

Hagler said a ticket for the new lotto game will cost $2, while the cost for a Natural State Jackpot ticket is $1.

He said the maximum prize for the Arkansas Lotto game will be $250,000 on the initial roll, and a pari-mutuel feature, like Powerball and Mega Millions, will drive the top jackpot through sales.

"We believe the new LOTTO game fills a gap in the ASL Game Portfolio," Hagler said last week in a written statement. Many states offer lotto games, he said.

The lottery's other draw games include Powerball, Mega Millions, Fast Play, Natural State Jackpot, Lucky for Life, Cash 3 and Cash 4.

"Natural State Jackpot at $1 per ticket rolls seven-days a week with an initial roll of $50K," Hagler said. "LOTTO will roll twice a week with an initial roll of $250K."

Adding a draw game balances the lottery's game portfolio, he said.

"Draw games provide anticipation of the roll; instant tickets provide immediate gratification," Hagler said.

Draw games provide superior profit margins ranging from 45% to 50% compared with instant tickets with profit margins ranging from 8% to 12%, he said. Instant tickets also are called scratch-off tickets, and most of the lottery's ticket sales are scratch-off tickets.

In fiscal 2023 that starts July 1, the lottery is forecasting $9 million in Arkansas Lotto ticket revenue from $4.5 million in $2 ticket sales during the initial approximately eight-and-a-half-month run in the next fiscal year, Hagler said.

For fiscal 2023, the lottery has projected $535.9 million in total revenue and $91.4 million raised for scholarships, he said. He said the projected budget for fiscal 2023 is reasonable.

During Wednesday's meeting of the Legislative Council's lottery oversight subcommittee, Hagler said he expects the lottery to raise around $100 million for college scholarships in fiscal 2022 that ends June 30.

"Now, the wheels could fall off tomorrow," he added.

"We don't know what the international environment is going to do to blow back on the U.S. economy, but right now that's what we think," Hagler said.

He said he expects the lottery to have its second-best performance for total revenue and the amount raised for college scholarships in any fiscal year in fiscal year 2022, but the lottery won't exceed its record revenue and amount raised for college scholarships in fiscal 2021 that ended June 30.

In fiscal 2021, the lottery's revenue totaled $632.5 million and the amount raised for college scholarships was $106.9 million.

"We are plowing through a serious recession," Hagler told lawmakers. "The economy is not favorable to retail, and we sell in a retail market."

Record fuel prices are affecting lottery ticket sales, he said.

During the first 10 months of fiscal 2022 that ends June 30, the lottery's revenue totaled $486.4 million compared with $521.6 million in the same period in fiscal 2021.

So far in fiscal 2022, the lottery reported $402.4 million in scratch-off ticket revenue -- a decline from $434.7 million in the same period in fiscal 2021 -- and $83.4 million in draw-game ticket revenue -- a drop from $86.3 million in the same period in fiscal 2021.

During the first 10 months of fiscal 2022, the amount raised for scholarships reached $77.3 million, a dip from $83.9 million in the same period in fiscal 2021.

At the end of the fiscal year, the lottery transfers the balance of its unclaimed prize reserve fund minus $1 million to college scholarships. The lottery reported a balance of $8.3 million in its unclaimed reserve fund at the end of April, after receiving $1.05 million in unclaimed prizes in April.

For fiscal 2022, Hagler projected total revenue of $509.2 million and the amount raised for scholarships at $88.6 million.

The lottery has beat its budget for net proceeds for scholarships so far in fiscal 2022 by $9.2 million, he said.


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