Correction: The state lottery loses money by operating its claim centers in Camden, Jonesboro and Springdale, its director, Bishop Woosley, stated in July. This article incorrectly characterized Woosley’s past comment about the costs.
The Arkansas Lottery Commission on Wednesday unanimously approved a revised budget that reduces its projection for money raised for scholarships by $3 million to $78.2 million. It also voted to close three regional prize claim centers in a cost-cutting move.
Officials are projecting that the fiscal 2015 scholarship proceeds will be the lowest of any fiscal year since the lottery started selling tickets on Sept. 28, 2009.
The new budget contains no references to electronic monitor games, which the Legislature barred the lottery from starting until mid-March when lawmakers can weigh in on them.
The lottery also trimmed its ticket revenue projection from $429.3 million to $416.8 million.
The amount raised for scholarships peaked in fiscal 2012 at $97.5 million. It dropped to $90.2 million in fiscal 2013 and to $81.4 million in fiscal 2014.
With the lottery falling short of its projections for net proceeds, the Legislature has responded in the past few years by twice cutting the sizes of awards to newer recipients.
In April, the Legislature's lottery oversight committee voted to oppose the lottery's implementation of electronic monitor games. But, the next day, the commission voted to allow lottery staff members to move forward with rolling out the games, which were scheduled to be introduced on Sept. 29, the day after the fifth anniversary of the lottery starting to sell tickets.
In a special session in July, the Legislature issued a moratorium on the games until March 13, which is months into the coming legislative session.
Lottery Director Bishop Woosley, who supported introducing the electronic monitor games, told the commissioners that he wanted to present them a budget that did not rely on electronic monitor games revenue, since it was unclear what the Legislature would ultimately decide to do about those games.
"It is unknown if that will be brought up or even be an issue in the next session. And so we had to revise the budget based on that game not being available. ... Ultimately what we decided to do was just to pull all of the revenues, all of the sales, all of the commissions, everything related to monitor games out of the budget and just leave it at that," Woosley told the commission.
Supporters of the monitor games said the games are like other lottery offerings, including Powerball and Mega Millions, except the drawings would be held every four minutes and results would be shown on monitors. They also argued that the games are already offered in 15 other states.
Some lawmakers and Gov. Mike Beebe, who opposed the games, said voters did not envision offering those types of games when they approved the constitutional amendment in 2008 that authorized creation of the lottery.
Commissioner Mark Scott said it appeared that the new budget would allow the commission to fund all of the scholarships awarded to college students this year.
Earlier in the day, Shane Broadway, the director of the state Department of Higher Education, said all scholarships should be funded if the lottery transfers $75 million to the department this fiscal year.
"If you do get below probably $75 million is where you got to look out down the road," Broadway said.
Scott asked if the commission staff had any ideas on how to make up for the $3 million in scholarships that Woosley said would be lost by the elimination of the electronic monitor games.
Woosley said he was researching other options for the lottery to improve sales but did not have any proposals to present. He showed commissioners several games not currently offered in the state, including one with a "Three Stooges" theme.
But the director warned that any new contracts or games approved by the commission would take several months to implement.
"In the lottery, it's very difficult to snap your fingers and [a game is on the market]," Woosley said.
In other business, the commission voted to close regional claims centers in Springdale, Jonesboro and Camden at the end of their leases. The Springdale center will close Nov. 1, and the other two will follow on Nov. 30.
The closures will save the lottery $381,000 in operational costs and the salaries and benefits of six employees, Woosley said. Those positions will be eliminated, although the employees will be allowed to apply for other openings.
Woosley said in an interview that the leases for the centers were signed at the beginning of the lottery five years ago and this was the first time they were up for renewal. He said closing the centers was not tied to declining ticket sales.
"They just did not make financial sense to keep open," Woosley said.
Lottery players can claim prizes of up to $500 at the lottery's nearly 1,900 retailers. Prizes of up to $1 million can be collected at the Camden, Jonesboro or Springdale locations or at a claims center in Little Rock.
Prizes above $1 million can be collected only at the Little Rock center. Winning tickets also can be submitted, by mail, to the Little Rock center.
Woosley told the commission in July that the claims centers in Camden, Jonesboro and Springdale weren't costing the lottery money, but they were "a convenience and perception issue" for the lottery in those parts of the state.
On average, the six employees at the Camden, Jonesboro and Springdale claims centers process a combined 8.5 prize checks per day, a lottery auditor reported. They also sell tickets.
A section on 08/21/2014