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State lottery's revenue falls $3M from 2015

Net proceeds slip to $5.8M; director says drop expected by Michael R. Wickline | October 12, 2016 at 5:45 a.m.
September revenue for The Arkansas Scholarship Lottery

The Arkansas Scholarship Lottery's revenue slipped in September by $3 million over the same month a year ago to $33.1 million as both scratch-off and draw-game sales dipped.

The lottery's net proceeds for college scholarships last month also dropped by about $800,000 to $5.8 million, the lottery reported this week in its monthly report to the Legislative Council's lottery oversight subcommittee and Gov. Asa Hutchinson.

"Our budget for this year anticipated a drop in sales, so some decrease was anticipated," lottery Director Bishop Woosley said Tuesday.

"We [also] were competing against a very good month of sales in September of last year," he said in a written statement. "There was a Powerball jackpot of over $300 million, a Natural State Jackpot of $345,000 and a very good instant ticket launch, which had a new $20 ticket with a different type of top prize than what we had offered in the past."

"This year, our instant games for September launched on Aug. 30, so the first two days of sales counted in August. Last year, the games came out on Sept. 1, 2015," said Woosley, who has been the lottery's director since February 2012.

Instant tickets also are known as scratch-off tickets.

September is the third month of fiscal 2017, which started July 1.

The lottery's revenue and net proceeds for college scholarships in July reached record levels for that month. That's because the lottery reaped the benefits of increased revenue from a national Mega Millions jackpot of more than $500 million and a national Powerball jackpot of nearly $500 million before winning numbers for both jackpots were drawn in other states.

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

It has helped finance more than 30,000 Arkansas Academic Challenge Scholarships during each of the past six fiscal years. The Legislature has cut the size of future scholarships three times partly because net proceeds in several years lagged initial projections.

The lottery's revenue and net proceeds rebounded last fiscal year, after dipping each of the previous three fiscal years from a peak in fiscal 2012. Key lawmakers have said they want to make sure the lottery's rebound is sustainable before changing the current scholarship program.

The lottery's scratch-off ticket revenue in September dropped from $29.2 million a year ago to $27.1 million, while the lottery's draw-game revenue fell from $6.7 million to $5.8 million, the lottery reported. Draw games include Powerball, Mega Millions, the Natural State Jackpot, Cash 3 and Cash 4.

The lottery's other revenue includes retailer fees.

Net proceeds dropped in September to $5.8 million from $6.6 million a year ago because "generally when sales drop there is a corresponding drop in proceeds," Woosley said. "This is especially the case when there is a significant difference in draw-game sales month over month."

During the first three months of fiscal 2017, revenue totaled $106.4 million, up from the $99.1 million collected in the same period in fiscal 2016.

During this three-month period in fiscal 2017, net proceeds totaled $20 million, up from $17.9 million in the same period in fiscal 2016.

"We are $867,512 above budget for total sales year to date," Woosley said.

"For net proceeds, we are $2,589,377 better than budget through September. We are also $1,092,697 better than budget for unclaimed prizes, so in total proceeds we are $3,682,074 ahead of budget through September."

Under state law, the lottery transfers its unclaimed prize balance, minus $1 million, to scholarships at the end of each fiscal year. The lottery reported an unclaimed prize fund balance of $3.5 million as of Sept. 30.

Fiscal 2016's total lottery revenue was $456.3 million, an increase of $47.1 million over the previous fiscal year. Net proceeds, the amount raised for college scholarships, increased by $12.7 million, to $85.3 million, over what was raised in fiscal 2015. Fiscal 2016 ended June 30.

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 of $463.4 million and net proceeds at $80.9 million.

Metro on 10/12/2016

Print Headline: State lottery's revenue falls $3M from '15

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