State legislators couldn't have found much encouragement in a report from consultants examining the Arkansas lottery.
The lottery, which funds a state scholarship program, has had difficulty attracting enough players, resulting in a variety of steps to cut expenses. That includes reductions in scholarship amounts in recent years, which could be trimmed again next year.
"The issues facing this lottery go way beyond expenses," said Sam DePhillippo, executive consultant for Camelot Global Services, a firm legislators hired to recommend ways to boost lagging sales.
The lottery's trouble "has to do a lot more with product offering, the mix of games offers, how it's marketed and promoted, how we service our retailers and how we service our players," he reported to the legislative panel that oversees the lottery earlier this month.
That's a lot of problems for a program that's only been around for five years.
Voters approved the necessary constitutional amendment in 2008 and the lottery launched the next year under the controversial direction of Ernie Passailaigue, the South Carolinian hired to manage the games.
Passailaigue, who was paid $324,000 yearly, resigned in 2011 amid criticism over his salary and a legislative audit of the lottery operation. His top two deputies also left. One resigned and the other was fired.
An interim director took over until Bishop Woosley, the current director, was hired.
It was a rapid launch, which one of the Philadelphia-based consultants said was "on steroids," offering "many, many games" which were introduced sooner than they should have been.
Woosley told the panel he agreed with some of the findings but not others.
"We continue to be hindered by the fast rollout of the lottery," Woosley acknowledged.
"A lot of decisions were made before any of us had any type of say in them, which we are still dealing with.
"We essentially rolled out every game that we could have possibly rolled out in the first 2 ½ years."
The lottery offers draw games like Powerball and scratch-off games ranging in price from $1 to $20 each. The lottery offered a wide array of games from the get-go and more have been added.
The consultants said the lottery needs a new business strategy and an image "reboot."
It is, according to the consultants, an issue of trust that affects the willingness of people to play the games.
Sixteen percent of players believe the lottery is dishonest, Camelot's Richard Bateson told lawmakers, saying that was the highest percentage he has seen.
He called it the "second-worst launch of any recent lottery in the United States." Only Oklahoma's lottery was worse, he said, citing a low 52 percent payout rate there.
Arkansas' payout rate is 67 percent, which is higher than most states' rates. But the state has lower per-capita sales than similar lotteries in other states and pays more to vendors than peer lotteries do.
Camelot contends the lottery can make changes to increase annual sales from $76 million to $122 million by 2019.
The consultants say the lottery needs a five-year plan that takes a more strategic approach to the mix of games offered, lottery promotion and the lottery's dealings with retailers and vendors.
Recommended changes also include having the governor make the majority of appointments to the Lottery Commission. Currently, the governor, the speaker of the House and the Senate president pro tem name equal numbers of commissioners.
The lottery should operate less like a state agency and more like a business, the consultants said, suggesting the Legislature continue to oversee the lottery "but not in a way that hinders progress."
Granted, the trust questions trace back to the days when Passailaigue, the former South Carolina lottery director, was in charge here.
But lawmakers must accept some criticism for the way they've changed the scholarship program through the years, altering its requirements and cutting scholarship amounts. Pre-filed legislation for 2015 would change the rules again.
Most of those changes were dictated by falling revenue from the lottery. But such policy shifts haven't exactly inspired a lot of confidence in parents or the Arkansas students who need the help to attend college.
Nevertheless, while the actual scholarship awards varied, the lottery has continued to fund more than 30,000 scholarships each year.
That's been a challenge and should continue to be the priority as lawmakers look for ways to improve the lottery.
It should probably be noted that, just as the lottery management has changed, so, too, has the Legislature, which maintains a major oversight role for now.
A lot of new members will have to get up to speed on the lottery issues as lawmakers wade into the 2015 session, which is already beset with many difficult budget-related issues.
Just add this one to the list.
BRENDA BLAGG IS A FREELANCE COLUMNIST AND LONGTIME JOURNALIST IN NORTHWEST ARKANSAS.
Commentary on 12/10/2014