The Arkansas Scholarship Lottery's revenue in October slipped by $1.2 million from the same month a year ago to $34 million, and the amount raised for college scholarships dipped by about $855,000 to $5.1 million.
October is the second-consecutive month that the lottery's revenue and net proceeds each dropped from year-ago figures.
But the lottery's revenue and net proceeds during the first four months of fiscal 2017 are running ahead of the figures from the same period in fiscal 2016, with the help of record revenue and net proceeds in July fueled by a Mega Millions jackpot of more than $500 million and a Powerball jackpot of nearly $500 million.
The lottery has helped finance more than 30,000 Arkansas Academic Challenge Scholarships during each of the past several fiscal years. It started selling tickets on Sept. 28, 2009.
The Legislature has cut the size of future scholarships three times partly because net proceeds lagged initial projections. But the lottery's revenue and net proceeds rebounded in fiscal 2016, which ended June 30. State lawmakers have said they want to make sure the lottery's rebound is sustainable before considering changes in the scholarship program.
Scratch-off ticket revenue in October dropped by $1.25 million from the same month a year ago to $28.5 million, while draw game revenue remained flat at $5.4 million, the lottery reported Thursday in its monthly report to Gov. Asa Hutchinson and the Legislative Council's Lottery Oversight Committee co-chairmen, Sen. Jimmy Hickey, R-Texarkana, and Rep. Chris Richey, D-Helena-West Helena. The lottery's revenue also included retailer fees.
Lottery Director Bishop Woosley said there were four Fridays in October, compared with five Fridays in the same month last year, and Fridays "are generally among our highest sales day."
"That can make a significant difference," he said in an email. Woosley said he couldn't point to any one reason for the decline in scratch-off ticket sales.
"It could be that the election had some impact. Generally during election years, our advertising is a bit limited because we get bumped due to more political ads being broadcast. That could be a factor," Woosley said in the written statement.
A month ago, Hutchinson said that while the state's economy appears robust, consumers may have been spending cautiously as Tuesday's presidential election approached. The governor was commenting after Arkansas' general-revenue collections fell short of the state's forecast for three consecutive months. In October, general revenue exceeded the forecast.
Woosley said he believes that the lottery's net proceeds dropped by about $855,000, compared with October 2015, because "we had a million dollar winner during the month, which had a significant impact on proceeds."
During the first four months of fiscal 2017, the lottery's revenue totaled $140.5 million -- up from $134.3 million in the same period in fiscal 2016.
So far in fiscal 2017, the lottery's net proceeds have totaled $25.1 million -- up from $23.9 million in the same period in fiscal 2016.
The lottery also reported $115,123 in unclaimed prizes in October, boosting the balance of that reserve fund to $3.5 million as of Oct. 31. Under state law, the balance of that fund at the end of the fiscal year, minus $1 million, will be transferred to scholarships.
Woosley, who has been the lottery's director since February 2012, said the lottery's net proceeds have exceeded what was projected so far for the fiscal year by $2.5 million "thanks to a very strong July and August."
Fiscal 2016's total lottery revenue was $456.3 million, an increase of $47.1 million over the previous fiscal year. Net proceeds increased by $12.7 million to $85.3 million over what was raised in fiscal 2015.
In fiscal 2012, the lottery's revenue and net proceeds peaked at $473.6 million and $97.5 million, respectively.
For fiscal 2017, Woosley is projecting revenue at $463.4 million and net proceeds at $80.9 million.
Fiscal 2017 net proceeds are projected to decline from fiscal 2016, which was "a little bit of an anomaly because we had a [record] Powerball jackpot [in January]," Woosley told lawmakers in June.
In November 2016, lottery officials signed a contract with Camelot Global Services to develop a business plan and help implement it. The company has offices in London and Philadelphia.
Under the contract, Camelot will receive base compensation and expense reimbursements up to $750,000 a year, but also will be eligible for incentive compensation of at least 12.5 percent of the lottery's adjusted operating income above $72.28 million in a fiscal year. The contract also calls for Camelot to help the lottery negotiate contracts with vendors; the savings would be used to help pay for Camelot's services. The contract will run through June 30, 2020, with options for a two-year extension.
In March, the lottery signed off on the consultant's five-year business plan that calls for the agency to set up about 600 more terminals, hire five more employees and increase its marketing budget from $5 million to $7.9 million, among other things.
Camelot's self-described ambitious business plan projects lottery revenue at $463 million in fiscal 2017, $517 million in fiscal 2018, $556 million in fiscal 2019, $581 million in fiscal 2020 and $615 million in fiscal 2021.
It forecasts net proceeds for college scholarships at $81 million in fiscal 2017, $93 million in fiscal 2018, $99 million in fiscal 2019, $104 million in fiscal 2020 and $109 million in fiscal 2021.
Metro on 11/12/2016