Lottery logs $2.8M gain in February

The Arkansas Scholarship Lottery's revenue increased in February over a year ago as the lottery sold more scratch-off and draw-game tickets despite a few ice and snow storms during the month.

It's the second-consecutive month that the lottery's revenue has exceeded year-ago figures.

The lottery's revenue in February increased by $2.8 million from a year ago to $41.7 million and the amount raised for college scholarships increased by about $200,000 from a year ago to $6.1 million, according to its reports to the Legislature's lottery oversight committee.

"They had a pretty good February," said Sen. Jimmy Hickey, R-Texarkana, the committee's co-chairman.

The lottery's ticket sales and net proceeds for scholarships increased the same month that the General Assembly passed legislation eliminating the Arkansas Lottery Commission. Gov. Asa Hutchinson signed the bill into law on Feb. 26.

Under Act 218, the lottery is now part of the Hutchinson administration in the state Department of Finance and Administration.

The law is aimed at stabilizing the lottery's finances after the lottery experienced declining ticket sales and net proceeds for college scholarships during each of the past two fiscal years, according to Hickey, the bill's sponsor.

The lottery started selling tickets on Sept. 28, 2009.

It has helped finance 30,000 Arkansas Academic Challenge Scholarships during each of the past five fiscal years. The Legislature has twice cut the size of the scholarship for future recipients partly because proceeds lagged behind initial projections.

February scratch-off ticket sales increased by $1.1 million from a year ago to $32 million and draw-game ticket sales, including the Powerball and Mega Millions jackpot games, increased by $1.6 million to $9.6 million, the reports show.

Lottery Director Bishop Woosley said the lottery's scratch-off ticket sales have increased over year-ago figures for eight consecutive months.

Changes to the lottery's scratch-off ticket games and marketing campaign, having more retailers selling lottery tickets and "an improved economy and low gas prices have contributed to our sales growth," he said.

"I think the sales would be even more over last year if not for the adverse impact of the February snowstorms."

The lottery reported 1,901 retailers selling tickets at the end of February compared with 1,885 a year ago.

Woosley said a large Powerball jackpot in February and the addition of a new game called Lucky for Life helped fuel draw-game ticket sales in February.

February's net proceeds for college scholarships "would have been higher except that we had a million-dollar [scratch-off] ticket winner come in the last day of the month," he said.

The lottery announced on Feb. 27 that its latest $1 million winner is Driton Krasniqi of Van Buren, who bought his winning ticket at the Flash Market Store in Van Buren.

During the first eight months of fiscal 2015, the lottery's revenue totaled $268.4 million -- about $1 million less than the same period in fiscal 2014, according to the lottery's reports.

So far in fiscal 2015, scratch-off ticket sales have increased by $9.9 million from the same period in fiscal 2014 to $217.2 million.

But sales for draw-game tickets have dropped by $10.9 million over the same period in fiscal 2014 to $50.8 million.

During the first eight months of fiscal 2015, the lottery has raised $45.9 million for college scholarships compared with $48.2 million during the same period in fiscal 2014.

Through Feb. 28, the lottery reported unclaimed prizes of $3.8 million compared with $3.7 million a year ago.

Act 1180 of 2011 requires the unclaimed prize money, minus $1 million, to be transferred to the state Department of Higher Education's scholarship account on the the last day of each fiscal year, Woosley noted.

In August, Woosley projected that fiscal 2015 lottery revenue would be $416.8 million with net proceeds for college scholarships at $78.2 million.

Woosley, who has been the lottery's director since February 2012, said that he doesn't intend to revise that forecast "at this time."

Both then-Department of Higher Education Director Shane Broadway and Hickey have told lawmakers that they expect scholarship proceeds will be at least a few million dollars lower than Woosley's estimates.

After raising $82.7 million for scholarships in nine months in fiscal 2010, the lottery raised $94.2 million during the first full fiscal year, 2011. Proceeds for scholarships climbed to $97.5 million in fiscal 2012 but dropped to $90.3 million in fiscal 2013. In 2014, proceeds fell to $81.4 million.

The Arkansas Academic Scholarship Program is financed through the lottery, plus $20 million a year in state general revenue and a $20 million lottery reserve account used to temporarily cover cash shortfalls in the program.

The Arkansas Academic Challenge Scholarship program paid out $122.7 million in scholarships in fiscal 2011, $129 million in fiscal 2012, $133.1 million in fiscal 2013 and $112.8 million in fiscal 2014. It is projected to pay out $101.5 million in scholarships in the current fiscal year and then $99.4 million in fiscal 2016, according to the state Department of Higher Education.

Hickey's proposed overhaul of the program, Senate Bill 5, is pending in the House Rules Committee.

Starting in the 2015-16 academic year, it would reduce the Arkansas Academic Challenge Scholarship from $2,000 to $1,000 for the freshman year at two- and four-year colleges. The scholarship would be increased from $3,000 to $4,000 for the sophomore year at the four year colleges and increased from $2,000 to $3,000 for the sophomore year at the two-year colleges.

Scholarship recipients would receive $4,000 in the junior year and $5,000 as seniors at the four-year universities.

SB5 also would change the scholarship's eligibility requirements; future high school graduates would be required to have an ACT score of at least 19 or the equivalent on a comparable college entrance exam.

Under current state law, the graduates are required to have successfully completed the Smart Core curriculum and achieved either a high school grade-point average of at least 2.5 or a minimum score of 19 on the ACT or the equivalent.

Hickey said his bill would help the program avert cash-flow problems as soon as February that could worsen in the future. Opponents counter that his bill would reduce access to college for some poor and black students.

SB5 fell a vote short of the 18 required for approval in the 34-member Senate on March 5 with several senators absent before it subsequently cleared the Senate in a 22-12 vote Monday.

Hickey said he's not sure when he'll present SB5.

The committee's leaders decided not to bring it up for a vote this week.

"I guess they hold title to it," he said, referring to the House Rules Committee appointed by House Speaker Jeremy Gillam, R-Judsonia.

"I have no indication that we'll be able to get anything going in the next week. If they are not willing to hear it or if they are not willing to let it out, we'll keep having discussions," Hickey said.

House Rules Committee Chairman John Vines, D-Hot Springs, said the committee will probably consider SB5 next week.

"Just because a Senate bill shows up, I can't bump it to the top [of the agenda]," before considering a slew of House bills, Vines said.

Gillam said he's not sure what the House Rules Committee that he appointed will do with SB5.

"I know there are still a lot of folks that are asking questions and it's like every other bill," he said.

"People want to put their input on it and ask for their ideas to be thought about and included, so I think [Hickey] is visiting with people about those ideas and how they fit in with what he's researched," Gillam said. "It could look exactly the same coming out [of the committee] as it did going in. There could be some minor changes and language here and there."

Metro on 03/14/2015

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