Scratch-off sales in May hit record for state lottery

12/5/14
Arkansas Demorcrat-Gazette/STEPHEN B. THORNTON
State Lottery Director Bishop Woosley addresses the Arkansas Lottery Commission Legislative Oversight  Committee meeting at the State Capitol in Little Rock.
12/5/14 Arkansas Demorcrat-Gazette/STEPHEN B. THORNTON State Lottery Director Bishop Woosley addresses the Arkansas Lottery Commission Legislative Oversight Committee meeting at the State Capitol in Little Rock.

Amid the coronavirus pandemic, boredom and savings from low gas prices, Arkansans plunked down more for state lottery scratch-off tickets alone this May than they've spent on scratch-off and draw-game tickets together in a May over the previous 10 years.

The Arkansas Scholarship Lottery's scratch-off revenue surged to $52.8 million last month, compared with $32.5 million a year ago, while draw-game revenue dipped to $8.3 million, $200,000 less than a year ago, the agency said Tuesday in its monthly report to Gov. Asa Hutchinson and the Legislative Council's lottery oversight subcommittee.

Total revenue in May reached $61.1 million, up from $41.1 million a year ago, and exceeded the previous record for the month of $43.3 million in 2011. The lottery has been selling tickets since Sept. 28, 2009, and has given more than 30,000 Arkansas Academic Challenge Scholarships during each of the past nine fiscal years. It hasn't reached that mark yet in the current fiscal year.

The lottery raised $8.6 million for college scholarships last month, up from $8.3 million a year ago.

Lottery Director Bishop Woosley said it's difficult to pinpoint any one reason for the increase in May scratch-off sales.

"First, the stores that sell our product have remained open during the entire period the virus was impacting our state," he said Tuesday in a written statement. Lottery retailers totaled 1,975 at the end of May, compared with 1,921 a year ago. Other revenue includes retailer fees.

"Second, the entire first week of March was our highest instant ticket sales week ever up to that point, so, the increase in sales began before the state was even remotely impacted by the Covid virus.

After that first week, there was a two-week lull in sales and then a steady and strong increase which mirrored or exceeded what we had seen the first week in March," Woosley said.

"If I had to offer a guess, I would say the increase in sales was due to a combination of most forms of entertainment (casinos, movie theaters, sports games and restaurants) being closed, low gas prices and people simply being bored and looking for activities that they can do in their own homes," Woosley said. He also credited his staff.

The state's three casinos closed in mid-March and reopened May 18.

Draw-game ticket sales slipped in May from the same month a year ago because "at the end of last May [2019] and the beginning of June, there was a Mega Millions jackpot that eventually reached over $500 million," he said. Tuesday night's Mega Millions was $410 million.

Draw-game tickets are Powerball, Mega Million, Natural State Jackpot, Cash 3, Cash 4, Lucky for Life and Fast Play, and they are more profitable to the lottery than scratch-offs.

The lottery raised more for college scholarships in May than a year ago because "the increase in sales for the month had a great deal to do with the proceeds amount being higher," Woosley said. "In addition, the agency expenses are less given that the majority of the staff has been working remotely and our sales staff have been out of the field for the last 2½ months."

May is the 11th month of fiscal 2020, which ends June 30.

During the first 11 months of fiscal 2020, total revenue reached $479.5 million, exceeding the $477.8 million collected in the same period in fiscal 2019.

So far in fiscal 2020, scratch-off ticket revenue totaled $406.8 million, up from $376.1 million in the same period in fiscal 2019, while draw-game revenue was $72.1 million, down from $100.9 million in the same period in fiscal 2019.

And so far in fiscal 2020, the lottery has raised $74.4 million for college scholarships, lagging behind the $84.9 million netted in the same period in fiscal 2019.

At the end of each fiscal year, the lottery transfers its unclaimed prize reserve fund minus $1 million to college scholarships. As of May 31, the unclaimed prize fund totaled $8.9 million, after taking in $831,425 in unclaimed prizes in May.

For fiscal 2020, Woosley has projected revenue of $497 million and net proceeds for college scholarships of $89.3 million. In fiscal 2019, the lottery took in $516.2 million and its net proceeds were $98.6 million.

Compared with the lottery's projected budget, "for the year, we are up in total sales almost $21 million over budget," and "up over $31 million in [scratch-off] ticket sales and down a little more than $9.8 million in [draw-game] sales," Woosley said.

"At this point, we are enjoying our best [scratch-off] ticket sales year and total sales year in our 10-year history. We are currently ahead of our proceeds budget by $171,940," he said.

For fiscal 2021, Woosley has projected revenue of $465.8 million and net proceeds of $78.2 million, citing uncertainty in the lottery world and the world in general.

Meanwhile, the state Division of Higher Education has paid out $88.6 million in lottery-financed Arkansas Academic Challenge Scholarships to 26,339 students so far in fiscal 2020, said division spokeswoman Alisha Lewis.

The division forecasts that it will distribute $91 million in these scholarships to 31,000 students in fiscal 2021.

The total Arkansas Academic Challenge Scholarship distribution peaked at $132.9 million in fiscal 2012, and that's dropped since then largely because of the Legislature cutting the amount of the initial scholarship three times in the past 11 years. These scholarships also are financed by $20 million a year in state general revenue.

The 2017 Legislature created the Workforce Challenge Scholarship program to use excess lottery proceeds to provide up to $800 a year for students enrolled in programs that lead to them being qualified for high-demand occupations.

So far in fiscal 2020, the division has distributed $265,943 Arkansas Workforce Challenge Scholarships to 1,700 students, Lewis said. In fiscal 2021, it projects paying out $2 million in the scholarships to 2,000 students.

In 2019, the Legislature created the lottery-financed Arkansas Concurrent Challenge Scholarship program under Act 456. High school juniors and seniors are eligible to receive the scholarship for a semester or academic year in which they are enrolled in an endorsed concurrent course or certificate program under certain conditions.

Lewis said the division has paid out $591,769 in Arkansas Concurrent Challenge Scholarships to 1,236 students so far in fiscal 2020.

"We are still receiving rosters for the first year so no estimates [for fiscal 2021] are available yet until all first year rosters are received," he said.

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