The Arkansas Scholarship Lottery's revenue and the amount raised for college scholarships dipped in July from a year ago when the lottery posted record revenue and net proceeds for the month.
July revenue totaled $36.8 million -- $1.4 million less than the $38.2 million in the same month a year ago -- the lottery reported in its monthly report to Gov. Asa Hutchinson and the Legislative Council's lottery oversight subcommittee.
While scratch-off ticket revenue surged from $27.8 million in July 2016 to $29.5 million last month, draw-game revenue dropped from $10.3 million to $7.2 million year over year.
Lottery revenue also includes fees from retailers, who numbered 1,934 on July 31, up from 1,917 a year ago.
The release of a popular Willy Wonka scratch-off in July boosted revenue for that type of game from a year ago, lottery Director Bishop Woosley said Thursday.
"This continues a positive growth trend that we have seen in the last few months with instant tickets," he said. Scratch-offs also are referred to as instant tickets.
Draw-game ticket revenue in July declined from the same month a year ago because last month didn't have the drawing power of last year's July Powerball jackpot of $478 million, which was the fifth-largest ever, and the $540 million Mega Millions jackpot, which was the third-highest ever, Woosley said.
"Those two jackpots had an enormous impact on our sales and proceeds for the month. It is really unprecedented to have that type of dual jackpot month," he said in a written statement.
Net proceeds last month dropped to $6.6 million from $8.7 million in July of 2016 because "last July was our best proceeds July in history due to the two large multi-state jackpots and a record unclaimed prize amount due to the 1.6 billion dollar Powerball jackpot in January [2016]," according to Woosley.
"It was going to be impossible to compete with that number without similar sized jackpots as we saw last July. That said, this was one of our best sales and proceeds months in July in a long time. And we are starting the [fiscal] year with a nice surplus in proceeds. That is a great place to be," he said.
The lottery has been selling tickets since Sept. 28, 2009, and has helped fund more than 30,000 Arkansas Academic Challenge Scholarships during each of the past seven fiscal years.
The Legislature has cut the size of future scholarships three times during this period because more students than initially projected earned the scholarship and the amount raised for scholarships fell short of lottery proponents ' initial projections of about $100 million a year.
Net proceeds for the scholarships peaked at $97.5 million in fiscal 2012 and then dropped for three consecutive years. The funds have increased in each of the past two fiscal years.
In fiscal 2017, which ended June 30, lottery revenue totaled $449.9 million, a decline of about $13.4 million from fiscal 2016. Net proceeds for college scholarships reached $85.2 million, exceeding the amount raised in fiscal year 2016 by $2,403.
For fiscal 2018, Woosley has projected revenue of $459 million and net proceeds at $83.6 million, as uncertainty remains about the number of lottery retailers that will accept debit cards for ticket purchases and any resulting increase in sales.
The Legislature changed state law earlier this year to give lottery retailers the option of accepting debit cards starting Aug. 1. Retailers have been divided about whether it makes financial sense for them to accept debit cards and hope their gains exceed the card transaction fees.
For example, spokesmen for Murphy USA and Kroger Co. have said their locations in Arkansas will accept debit-card lottery purchases, while an executive for E-Z Mart Stores Inc. has said its stores won't accept debit cards for now.
In fiscal 2017, the Arkansas Department of Higher Education handed out $86.1 million in Arkansas Academic Challenge Scholarships, a decline from $96.4 million in fiscal 2016, according to Tara Smith, deputy director for the department.
The largest scholarship amount distributed was $132.9 million in 2012.
"We will be providing an update on availability for funds for Workforce Challenge Scholarship at the next lottery oversight meeting [on Thursday]," Smith said in an email.
The Workforce Challenge Scholarship Program was created as a result of this year's Legislature and Gov. Asa Hutchinson enacting Act 613 of 2017.
The program will use any excess lottery proceeds to fund scholarships for students enrolled in higher-education programs that lead to qualification for jobs in high-demand occupations.
Eligible students would have to be in a program at a public or private higher-education institution in Arkansas that leads to an associate degree or a certificate program in industry, health or information technology and qualifies them to work in an occupation identified by the Department of Workforce Services under Act 613.
"Any unused net lottery proceeds that were transferred to ADHE in [fiscal] 17 for Academic Challenge will be put aside for the Workforce Challenge Scholarship," Smith said in her email.
"We have $4,887,236.92 remaining from unused net lottery proceeds in FY17. Those funds will be put in the new trust account for the Workforce Challenge Scholarship for which we will take applications for next year.
"We are still working on projections for FY18 because we are still processing new applications and updating current recipients statuses to determine if they meet continuing eligibility requirements," she said.
Metro on 08/11/2017