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Arkansas lottery revenue for August down from 2021; director points to inflation

Director points to reduction in spending due to inflation by Michael R. Wickline | September 13, 2022 at 5:25 a.m.
Arkansas Scholarship Lottery tickets are shown in this file photo.

The Arkansas Scholarship Lottery's revenue and the amount raised for college scholarships slipped slightly in August from a year ago, with the lottery scheduled to begin selling a new draw game ticket called the Arkansas LOTTO on Sunday.

The lottery's total revenue in August dropped from $50.2 million a year ago to $49.4 million, the lottery reported Monday in its monthly report to Gov. Asa Hutchinson and the Legislative Council's lottery oversight subcommittee.

The lottery's scratch-off ticket revenue declined in August from $42.2 million a year ago to $41.5 million, and the lottery's draw-game revenue dipped from $7.9 million a year ago to $7.7 million.

The lottery's current draw games include Powerball, Mega Millions, Natural State Jackpot, Fast Play, Lucky for Life, Cash 3, and Cash 4.

Lottery Director Eric Hagler said Monday that headwinds are clearly an issue when one considers that the U.S. economy has seen 18 consecutive weeks of inflation running over 5%, based on information from the U.S. Department of Labor.

"Inflationary pressure for the consumer has led to a reduction in discretionary spending across the entire retail landscape, and Lottery is not immune to these effects," he said in a written statement. "Fuel prices are still +40% from 2020, so the apparent reduction at the pump does not tell the whole economic story. Consumers have also seen a marked spike in their electric bills due to higher costs during near-100 degree weather. And, unlike July, there were no huge jackpots creating a drive to the counter in August."

The average gas price in Arkansas is $3.16 for a gallon of regular unleaded, a decline from $3.51 a gallon a month ago but up from $2.84 a gallon a year ago, the AAA reported Monday.

In August the lottery raised $6 million for college scholarships, a drop from the $6.7 million a year.

Asked about the drop in net proceeds for college scholarships in August compared with a year ago, Hagler said "the accrual to cash [accounting] adjustment saw a swing against net proceeds this month."

With unclaimed prizes of about $1.5 million, the amount raised for college scholarships will fall back into line, he said.

"Net proceeds, month over month, reveals very little," Hagler said. "The real measure of net proceeds is the annualized number."

The lottery's unclaimed prize reserve fund totaled $1.8 million on Aug. 31, after receiving $1.5 million in unclaimed prizes in August. At the end of each fiscal year, the lottery transfers the unclaimed prize reserve fund minus $1 million to college scholarships under state law.

The Arkansas Scholarship Lottery has been selling tickets since Sept. 28, 2009.

It's helped finance Arkansas Academic Challenge Scholarships for more than 30,000 students for 11 consecutive fiscal years until fiscal 2022 that ended June 30, when 28,716 students were awarded scholarships amid declining higher education enrollments.


Fiscal 2023 started July 1.

During the first two months of fiscal 2023, the lottery's revenue totaled $101.5 million -- up from $97.8 million in the same period in fiscal 2022, the lottery reported.

So far in fiscal 2023, the lottery's scratch-off revenue totaled $77 million compared with $82.1 million in the same period in fiscal 2022, while the lottery's draw-game revenue in fiscal 2023 totaled $24.4 million compared with $15.1 million in the same period in fiscal 2022, according to the lottery.

During the first two months of fiscal 2023, the lottery raised $18.4 million for college scholarships, compared with $15.1 million in the same period in fiscal 2022, the lottery reported.

For fiscal 2023, the lottery is projecting total revenue of $535.9 million and raising $91.4 million for college scholarships.

In fiscal 2022, the lottery collected revenue of $580.2 million and raised $99.7 million for college scholarships. They were the second-largest amounts the lottery has reported in any fiscal year, trailing only fiscal 2021, when the lottery collected revenue of $632.5 million and raised $106.6 million for college scholarships.

Last year, lottery officials attributed fiscal 2021's record numbers in part to factors brought on by the covid-19 pandemic.


Hagler said the lottery will begin selling Arkansas LOTTO draw-game tickets Sunday with a first drawing set for Sept. 21.

"The game costs $2 per ticket, with an exciting starting jackpot of $250,000," he said in a written statement. "Our focus group testing led us to this offering. The players have spoken, and we listened."

The drawings will be held each Wednesday and Saturday at 9 p.m., Hagler said.

The game will differ from Powerball and Mega Millions because it will be exclusive to Arkansas, and it will feature a bonus number, the lottery said in a news release.

A player will pick six numbers from 1 to 40 to play, and seven numbers will be drawn with six main numbers and a bonus number, according to the lottery. If the player matches the first six main numbers drawn in any order, the player wins the jackpot, the lottery said. Players who match the bonus number will increase any non-jackpot prizes.

Hagler said the Arkansas LOTTO has the potential to create millionaires each year and will increase funding for scholarships since more money from draw-game ticket sales than scratch-off ticket sales goes to college scholarships.

The last draw game added at the lottery was Lucky for Life in January of 2015, according to the lottery,


The state Division of Higher Education hasn't distributed funds for lottery-financed scholarships for fiscal 2023.

"We haven't paid any rosters for [fiscal year] 2023 yet," Division of Higher Education spokeswoman Alisha Lewis said Monday in a written statement. "We have to wait until the 11th class day before the institutions return the list of students eligible for aid."

In fiscal 2022 that ended June 30, the division awarded a total of $75.1 million in Arkansas Academic Challenge Scholarships to 28,716 students. The division had forecast that it would hand out $90 million in scholarships to 31,200 students in fiscal 2022.

Fiscal 2022 is the first fiscal year in the past 12 fiscal years that Arkansas Academic Challenge Scholarships were awarded to fewer than 30,000 students. Last month, the division's assistant director of finance, Nick Fuller, said that's because of the continued trend of overall enrollment decline in higher education and the total number of high school students' continuing to get smaller, leading to a smaller pool from which scholarships are awarded.

For fiscal 2023, the division projects awarding a total of $78 million in Arkansas Academic Challenge Scholarships to 27,250 students, Lewis said.

The Arkansas Academic Challenge Scholarships are financed with the lottery's net proceeds plus $20 million a year in state general revenue.

The amount handed out for the Academic Challenge Scholarships peaked at $132.9 million in fiscal 2013, with awards going to 33,353 students. Scholarship totals have dropped largely because the Legislature cut the amount of initial scholarships several times.

The 2017 Legislature created the Workforce Challenge Scholarship to use excess proceeds to provide up to $800 per year for students enrolled in programs that lead to qualifications in high-demand occupations.

In fiscal 2022, the division has awarded these scholarships to 690 students and disbursed $605,694.

In fiscal 2023, the division projects it will distribute Workforce Challenge Scholarships to 1,000 students and disburse $1 million, Lewis said.

The 2019 Legislature created the Concurrent Challenge program that allows high school juniors and seniors to receive the scholarships for a semester or an academic year in which they are enrolled in an endorsed concurrent course or certain programs.

For the Concurrent Challenge program, the division awarded scholarships to 16,432 students and disbursed $2.7 million in fiscal 2022.

In fiscal 2023, the division is projecting awarding Concurrent Challenge Scholarships to 13,750 students and disbursing $2.75 million, Lewis said.

Print Headline: Inflation cited as lottery revenue falls


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