In the absence of a large multistate jackpot fueling sales, the Arkansas Scholarship Lottery's revenue in November dipped by about $13.6 million from a year ago to $44.9 million and the amount raised for college scholarships slipped by about $1.5 million to $9.1 million.
In November 2022, a record $2 billion Powerball jackpot fueled the lottery's fortunes and its revenue reached $58.5 million and the amount raised for college scholarships hit $10.6 million. The Powerball jackpot reached $2 billion on Nov. 7, 2022, and the winning ticket was sold in Altadena, Calif.
Lottery director Eric Hagler said Friday that the lottery forecast that November and December of 2023 "would be 'tough sledding' and our prognostication is proving to be correct.
"Recessionary forces are weighing on consumers in the discretionary category," he said in a written statement. "Fuel prices and grocery items have fluctuated, but interest rates have only risen. We expect to see recovery to normal in late [third quarter] and into [fourth quarter], with performance remaining ahead of our most aggressive budget since inception of the lottery.
"All things considered, the lottery is performing very well in fiscal 2024," Hagler added.
Fiscal year 2024 started July 1 and ends June 30, 2024.
The Arkansas Scholarship Lottery has been selling tickets since Sept. 28, 2009, and has helped finance Arkansas Challenge Scholarships for more than 30,000 college students during 11 of the past 13 fiscal years.
The lottery's scratch-off revenue dipped from $40.4 million in November 2022 to $37 million last month and the lottery's draw-game revenue fell from $18 million in November 2022 to $7.8 million last month, the lottery said last week in its monthly report to Gov. Sarah Huckabee Sanders and the Legislative Council's lottery oversight subcommittee.
The lottery's Powerball ticket sales plummeted from $11 million in November 2022 to $2.1 million last month, according to the lottery's reports.
Besides Powerball, the lottery's other draw games include Mega Millions, Fast Play, Cash 3, Cash 4, Natural State Jackpot, Luck for Life and LOTTO.
Hagler noted that there was a historic Powerball jackpot in November 2022.
"We did not have jackpot support last month, which is reflected in our numbers," he said. "If you back out Powerball sales from last year and replace with this year's sales, we are essentially flat for the month" in draw-game sales.
FISCAL 2024 DETAILS
November is the fifth month of fiscal 2024, and during this period, the lottery's revenue totaled $255.6 million, an increase of $3.4 million from the $252.2 million in revenue collected in the same period in fiscal 2023, according to the lottery's reports.
During the first five months of fiscal year 2024, the lottery's scratch-off ticket revenue totaled $192.7 million -- up from $190.2 million in the same period in fiscal 2023 -- and the lottery's draw-game revenue reached $62.5 million -- up from $61.6 million in the same period in fiscal 2023, according to the lottery's reports.
So far in fiscal 2024, the lottery reported raising $49 million for college scholarships -- an increase of $2.1 million from the $46.9 million raised in the same period in fiscal 2023.
Under state law, at the end of the fiscal year, the lottery transfers its unclaimed prize reserve balance minus $1 million to college scholarships.
The lottery's unclaimed prize reserve balance totaled $6.06 million on Nov. 30 after receiving $115,051 in unclaimed prize money in November, according to the lottery.
So far in fiscal 2024, Hagler said the lottery's total revenue is $25.6 million, or 11%, ahead of the projected budget, and the amount raised for college scholarships is $13.2 million, or 31%, ahead of the projected budget.
For all of fiscal 2024, the lottery has projected total revenue of $567.9 million and raising $100.7 million for college scholarships.
In fiscal 2023, which ended June 30, the lottery raised $114.7 million for college scholarships, the largest amount it has produced for scholarships in any fiscal year. The lottery's previous high was $106.6 million raised in fiscal 2021, which ended June 30, 2021.
The lottery's revenue in fiscal 2023 totaled $608.2 million, lagging behind the $632.5 million collected in fiscal 2021. In fiscal 2021, lottery officials attributed the lottery's performance in part to factors brought on by the covid-19 pandemic, such as people spending more time at home.
Hagler attributed the record amount of money raised for college scholarships in fiscal 2023 to collecting more draw-game ticket revenue in that fiscal year.
SCHOLARSHIPS
In a letter dated Dec. 1 to the Legislative Council lottery oversight subcommittee, state Division of Higher Education Commissioner Ken Warden said he is submitting for the subcommittee's review the division's recommendations for the Arkansas Academic Challenge Scholarship Program in accordance with state law, and "I propose the review of eligibility and award amounts for potential changes at each level within the Academic Challenge Scholarship Program."
The balance in the state's Scholarship Trust Account is $264,937,341.30, said Scott Hardin, a spokesman for the state Department of Finance and Administration.
Asked why Warden proposed that review, state Department of Education spokeswoman Kim Mundell said in a written statement that "reviewing our policies and procedures is simply good practice.
"This review will give us an opportunity to evaluate the effectiveness of the scholarship program and look for ways we might better serve our students," she said. "We have no specific proposals or guidance and would not create any before a review was conducted."
So far in fiscal 2024, the state Division of Higher Education has disbursed $39.6 million in Arkansas Academic Challenge scholarships to 28,737 students, Mundell said.
In fiscal 2023, the Division of Higher Education disbursed Arkansas Academic Challenge scholarships totaling $74.3 million to 26,109 students. For fiscal 2024, the Division of Higher Education projects it will award 27,000 students Academic Challenge scholarships totaling $75 million.
Fiscal 2023 is the second-consecutive fiscal year in the past 13 fiscal years that Arkansas Academic Challenge scholarships were awarded to fewer than 30,000 students.
The amount handed out for Academic Challenge scholarships peaked at $132.9 million in fiscal 2013, with awards going to 33,353 students. Scholarship totals have dropped largely because the Legislature cut the amount of initial scholarships several times.
The Arkansas Academic Challenge scholarships are financed with lottery proceeds, plus $20 million a year in state general revenue.
The 2017 Legislature created the Workforce Challenge Scholarship to use excess proceeds to provide up to $800 per year for students enrolled in programs that lead to qualifications in high-demand occupations.
So far in fiscal 2024, the division has disbursed $416,309 in Workforce Challenge scholarships, Mundell said. She said 931 students have been awarded those scholarships.
In fiscal 2023, the Division of Higher Education disbursed Workforce Challenge scholarships totaling $521,277 to 701 students. For fiscal 2024, the division projects awarding Workforce Challenge scholarships totaling $750,000 to 2,000 students.
The 2019 Legislature created the Concurrent Challenge program that allows high school juniors and seniors to receive scholarships for a semester or an academic year in which they are enrolled in an endorsed concurrent course or certain programs.
So far in fiscal 2024, the division has disbursed $2.1 million in Concurrent Challenge scholarships to 7,364 students, Mundell said.
In fiscal 2023, the division disbursed Concurrent Challenge scholarships totaling $2.6 million to 13,982 students. In fiscal 2024, the division projects distributing Concurrent Challenge scholarships totaling $3 million to 17,000 students.
The Challenge Plus Scholarship will first be awarded to students who qualify in the 2024-25 academic year, according to Mundell.
Act 386 of 2023 created the Arkansas Challenge Plus Scholarship program to provide additional funds for students based on their financial need.
Under Act 386, a student will be eligible for the new program for an academic semester or academic year if the student applies for and maintains eligibility for a scholarship under the Arkansas Academic Challenge Scholarship program and demonstrates financial need as determined by the Free Application for Federal Student Aid (FAFSA).
The scholarship will be awarded in increments of $1,000 for each eligible student in each academic year with a maximum of $4,000, as determined by the Division of Higher Education under Act 386. The scholarship amounts may vary each year depending on the amount of funding available under the law.
The sum of an Arkansas Challenge Plus Scholarship and Arkansas Academic Challenge Scholarship won't exceed $5,000 for each eligible student in an academic year under Act 386.
Under Act 1105 of 2015, the scholarship size for Arkansas Academic Challenge Scholarship recipients is $1,000 for the freshman year at two- and four-year colleges. The scholarship size is $3,000 for recipients for the sophomore year at a two-year college, $4,000 for the sophomore and junior years at four-year colleges and $5,000 for the senior year at four-year colleges.
The Challenge Plus Scholarship is projected by the state to cost about $13.5 million a year, according to an estimate from the Division of Higher Education.