While the Arkansas lottery’s ticket sales so far this fiscal year are trailing sales for the same period last year by $23.5 million, the amount raised for college scholarships has slipped by only $600,000, the lottery’s director said.
That’s partly because, although overall ticket sales have declined, draw-game ticket sales have increased over year-ago figures as scratch-off ticket sales have dropped, lottery Director Bishop Woosley said Monday.
The lottery has “a better margin,” and makes more money for college scholarships on the sales of drawgame tickets, such as Powerball and the Natural State Jackpot, than on scratch-off ticket sales, he said.
When the lottery’s overall ticket sales drop, the lottery’s commissions to retailers, lottery vendor contract expenses and prize expenses drop, Woosley said, also helping the lottery maintain scholarship amounts.
Additionally, the lottery has reduced administrative expenses, said Woosley, who was hired by the Arkansas Lottery Commission in a 6-2 vote a year ago at an annual salary of $165,000.
Former lottery Director Ernie Passailaigue, who resigned in October 2011, was paid $326,832 a year, and Passailaigue’s two vice presidents - one resigned and the other was fired - were paid $225,655 a year. Woosley hasn’t filled either vice president post.
The lottery’s ticket sales totaled $238.3 million during the first seven months of fiscal 2013, compared with $261.8 million for the same period in fiscal 2012, according to the lottery’s reports to the Legislature’s lottery oversight committee. Monthly ticket sales have lagged year-ago figures for six of the past seven months.
The lottery has raised $50.6 million for college scholarships during the first seven months of fiscal 2013, compared with $51.2 million during the same period in fiscal 2012, Woosley said. The amount raised for scholarships in fiscal 2012 includes $3.6 million in unclaimed prizes that will be transferred to scholarships at the end of the fiscal year.
Last April, Woosley projected the lottery would raise $98.5 million for college scholarships in fiscal 2013.
But he later lowered hisestimates, telling lawmakers in November that they “are probably safe to assume” that the lottery will raise “somewhere in the $89 million to $90 million” range for college scholarships in fiscal 2013 “if sales trends continue to hold.”
Lower-than-expected lottery proceeds led lawmakers to cut the size of lottery scholarships for first-time recipients in 2011. Legislation to further reduce the size of the scholarships passed the House of Representatives on Monday.
Arkansas lottery started selling tickets on Sept. 28, 2009, and raised $82.7 million for scholarships during a nine-month period in fiscal 2010.
It generated $94.2 million for college scholarships in fiscal 2011, its first full fiscal year, and $97.5 million in fiscal 2012.
More than 30,000 students have received scholarships during each of the past three fiscal years.
Former Lt. Gov. Bill Halter of North Little Rock, who ran a 2008 campaign leading voters to approve a constitutional amendment to allow for a state lottery for college scholarships, and Passailaigue projected the lottery would raise about $100 million a year for college scholarships.
The state Department of Finance and Administration estimated that a lottery’s net proceeds for college scholarships would be about $55 million a year.
Last month, lottery ticket sales totaled $32.4 million; that trailed $35.1 million in ticket sales for the same month last year, lottery officials reported. According to lottery officials:
Scratch-off ticket sales last month were $26.7 million, lagging year-ago sales of $29.6 million. But draw-gameticket sales last month were $5.7 million, ahead of year-ago sales of $5.4 million.
The amount raised for college scholarships last month was $6.5 million compared with $5.5 million in January 2012.
During the first seven months of fiscal 2013, scratchoff ticket sales totaled $191.8 million compared with $222.2 million for the same period in fiscal 2012.
During the first seven months of fiscal 2013, drawgame ticket sales totaled $46.4 million compared with $39.6 million for the same period in fiscal 2012.
As for why the scratch-off ticket sales are lagging while draw-game ticket sales have picked up, Woosley said there are various explanations.
“But the best explanation is that we have had several large Powerball jackpots that have boosted our draw-game sales and we introduced the Natural State Jackpot [game] in August, which has beenvery successful,” he said.
“Our [scratch-off ticket] sales dropped in the early part of the fiscal year, but have been improving since,” Woosley said.
During the first seven months of fiscal year 2013, Powerball ticket sales have increased by $6 million to $26.2 million over the same period last fiscal year, he said. The Natural State Jackpot’s sales in fiscal 2013 are $3.7 million. (The game didn’t exist in fiscal 2012.) The Cash 3 ticket sales in fiscal 2013 are $3.54 million, $56,620 ahead of sales in fiscal 2012.
But Mega Millions ticket sales have declined by $2.5 million to $7.9 million, and the Decades for Dollars ticket sales have dipped by $1.4 million to $1.8 million over the same periods, Woosley said.
Arkansas participates with Georgia, Virginia and Kentucky in the Decades for Dollars game, which has a grand prize of $250,000 for 30 years.
Northwest Arkansas, Pages 7 on 02/19/2013