Bolstered by a boost in Mega Millions ticket sales with a jackpot that reached $1.6 billion in early August, the Arkansas Scholarship Lottery's revenue for the month increased by $6.6 million over the same month a year ago to $56 million.
The lottery's amount raised for college scholarships in August increased by $1.5 million over a year ago to $7.5 million.
The lottery has been selling tickets since Sept. 28, 2009, and has helped finance Arkansas Challenge Scholarships for more than 30,000 college students during 11 of the past 13 fiscal years.
The lottery's draw-game ticket revenue increased from $7.7 million a year ago to $14.1 million, while the lottery's scratch-off ticket revenue inched up from $41.5 million a year ago to $41.9 million, the lottery reported last week in its monthly report to Gov. Sarah Huckabee Sanders and the Legislative Council's lottery oversight committee.
Lottery Director Eric Hagler said in a written statement that many regular scratch-off ticket players migrate their game play to the draw-game category when significant jackpots are in play, and in this case Mega Millions with a $1.6 billion jackpot was the hot ticket for most players.
The lottery's draw-game revenue for Mega Millions increased from $1.4 million in August 2022 to $5.7 million last month, and for Powerball increased from $1.8 million in August 2022 to $2.9 million last month, according to the lottery's reports.
The $1.602 billion Mega Millions jackpot was won Aug. 8 in Florida with a ticket purchased at Publix in Neptune Beach, according to Mega Millions' website. That's the largest Mega Millions jackpot ever awarded.
The lottery's other draw games include Fast Play, Cash 3, Cash 4, Natural State Jackpot and LOTTO.
The lottery raised $7.5 million for college scholarships in August -- up from $6 million a year ago -- because "net proceeds are most benefited by the sales from the draw game category due to the higher margins associated with those games," Hagler said.
"During months with high jackpots in draw games, we expect to see a higher return on sales," he said.
August is the second month of fiscal year 2024, which started July 1 and ends June 30, 2024.
During the first two months of fiscal year 2024, the lottery's revenue totaled $109.5 million -- up from $101.5 million in the same period in fiscal 2023, according to the lottery's reports.
So far in fiscal 2024, the lottery's scratch-off ticket sales have reached $79.1 million compared with $77 million in the same period in fiscal 2023, and the lottery's draw-game sales have totaled $30.2 million compared with $24.4 million in fiscal 2023.
During the first two months of fiscal year 2024, the lottery has raised $20.1 million for college scholarships compared with $18.4 million in the same period in fiscal 2023.
At the end of the fiscal year, the lottery transfers its unclaimed prize reserve balance minus $1 million to college scholarships under state law.
The lottery's unclaimed prize reserve balance totaled $4.4 million Aug. 31 after getting $3 million in unclaimed prize money in August, according to the lottery.
In fiscal 2023 that ended June 30, the lottery raised $114.7 million for college scholarships, the largest amount the lottery has produced for college scholarships in any fiscal year. The lottery's previous high was $106.6 million raised in fiscal 2021 that ended June 30, 2021.
The lottery's revenue in fiscal 2023 totaled $608.2 million and lagged the $632.5 million collected in fiscal 2021. In fiscal 2021, lottery officials attributed the lottery's performance in part to factors brought on by the covid-19 pandemic, such as people spending more time at home.
Hagler attributed the record amount of money raised for college scholarships in fiscal 2023 to collecting more draw-game ticket revenue in fiscal 2023.
In fiscal 2024, the lottery has projected total revenue of $567.9 million and raising $100.7 million for college scholarships.
So far in fiscal 2024, the Division of Higher Education has disbursed $890,375 in Arkansas Academic Challenge Scholarships, said Department of Education spokesperson Kim Mundell. She said 27,430 students have been awarded Academic Challenge Scholarships.
In fiscal 2023, the Division of Higher Education disbursed Arkansas Academic Challenge Scholarships totaling $74.3 million to 26,109 students.
For fiscal 2024, the Division of Higher Education projects it will award 27,000 students Academic Challenge Scholarships totaling $75 million.
Fiscal 2023 is the second consecutive fiscal year in the past 13 fiscal years that Arkansas Academic Challenge Scholarships were awarded to fewer than 30,000 students. Last year Nick Fuller, assistant director of finance at the division, said fewer than 30,000 students were awarded the scholarships in fiscal 2022 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.
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 Arkansas Academic Challenge scholarships are financed with lottery proceeds, plus $20 million a year in state general revenue.
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.
So far in 2024, the division has disbursed $119,972 in Workforce Challenge Scholarships, Mundell said. She said 852 students have been awarded Workforce Challenge Scholarships.
In fiscal 2023, the Division of Higher Education disbursed Workforce Challenge Scholarships totaling $521,277 to 701 students.
For fiscal 2024, the division is projecting awarding Workforce Challenge Scholarships totaling $750,000 to 2,000 students.
The 2019 Legislature created the Concurrent Challenge program that allows high school juniors and seniors to receive scholarships for a semester or an academic year in which they are enrolled in an endorsed concurrent course or certain programs.
So far in fiscal 2024, the division hasn't awarded any Concurrent Challenge Scholarships nor disbursed any of these scholarship funds, Mundell said.
"Concurrent Challenge works on a reverse roster submitted to [the Division of] Higher Ed from the institutions rather than via an application from each student," she said in a written statement.
The Division of Higher Education hasn't processed any of those rosters yet for the fall, Mundell said.
In fiscal 2023, the division disbursed Concurrent Challenge Scholarships totaling $2.6 million to 13,982 students.
In fiscal 2024, the division is projecting distributing Concurrent Challenge Scholarships totaling $3 million to 17,000 students.
Mundell said the Challenge Plus Scholarship will first be awarded to students who qualify in the 2024-2025 academic year.
Act 386 of 2023 created the Arkansas Challenge Plus Scholarship program to provide additional funds for students based on their financial need.
Under Act 386, a student will be eligible for the new program for an academic semester or academic year if the student applies for and maintains eligibility for a scholarship under the Arkansas Academic Challenge Scholarship program and demonstrates financial need as determined by the Free Application for Federal Student Aid, known as FAFSA.
The scholarship will be awarded in increments of $1,000 for each eligible student in each academic year with a maximum of $4,000 for each eligible student in each academic year, as determined by the Division of Higher Education under Act 386. The scholarship amounts may vary each year depending on the amount of funding available under the law.
The sum of an Arkansas Challenge Plus Scholarship and Arkansas Academic Challenge Scholarship won't exceed $5,000 in total for each eligible student in an academic year under Act 386.
Under Act 1105 of 2015, the scholarship size for Arkansas Academic Challenge Scholarship recipients is $1,000 for the freshman year at two- and four-year colleges. The scholarship size is $3,000 for recipients for the sophomore year at a two-year college, $4,000 for the sophomore and junior years at four-year colleges, and $5,000 for the senior year at four-year colleges.
The Challenge Plus Scholarship is projected by the state to cost about $13.5 million a year, according to an estimate from the Division of Higher Education.