Proceeds from the Arkansas scholarship lottery have increased about 8% over a year ago, but the amount collected for college scholarships is down about 8%.
Last month, total lottery revenue rose from $42.6 million in 2020 to $46.2 million this year, the lottery said Wednesday in its monthly report to Governor Asa Hutchinson and the Legislature’s Lottery Oversight Subcommittee.
For the month, the amount collected for college scholarships fell from $8.4 million in 2020 to $7.7 million this year, according to the report.
The lottery manager, Eric Hagler, attributed the drop to an ordinary accounting settlement.
We haven’t closed for a moment [scratch-off] “The unclaimed awards and associated modification will put them back in line,” he said Wednesday in a written statement.
At the end of each fiscal year, the lottery transfers the unclaimed prize reserve fund balance, minus $1 million, into college grants under state law.
The lottery has been selling tickets since September 28, 2009, and has helped fund Arkansas Academic Challenge Scholarships for more than 30,000 college students during each of the past 11 fiscal years.
Regarding the increase in lottery revenue in October, Hagler said that lottery officials are pleased with the performance of their current game collection.
He said there were early indications of a “positive halo effect” from the 2021 fiscal year that ended on June 30 or that “limited entertainment options during the pandemic have led to increased demand for lotteries.”
“We hope that the market gains made last year will prove to be sustainable,” Hagler said.
In October, scratch-off lottery ticket revenue increased from $35.4 million a year ago to $36.9 million, while lottery ticket revenue increased from $7.1 million a year ago to $9.1 million, according to the lottery.
Lottery drawing games include Powerball, Mega Millions, Fast Play, Natural State Jackpot, Lucky for Life, Cash 3 and Cash 4. Draw game sales are more profitable for lotteries than scratch-ticket sales.
Lottery games director Mike Smith said most lottery games increased sales last month over a year ago, and Powerball revenue increased by nearly $1.6 million. The lottery recorded Powerball sales of $3.07 million in October, compared to $1.54 million a year earlier.
Smith said the Powerball jackpot was announced with an estimated $635 million on October 2 and $685 million on October 4. Powerball won the $699.8 million jackpot on October 4, and one winner bought the winning ticket in Morro Bay, California.
A family of themed scratch cards launched on October 2 and provided a solid month of scratchable revenue, he said. He said tickets were released last year in the last week of September, not October.
Finance 2022
During the first four months of fiscal year 2022, which began July 1, total lottery revenue was $190.9 million, compared to $189.5 million in the same period in fiscal 2021.
So far in fiscal year 2022, scratch-off tickets total $156.2 million, compared to $162.1 million in the same period in fiscal 2021, while swipe game revenue totaled $34.3 million so far in fiscal 2022, compared to 27.1 million dollars in the same period of the fiscal year. 2021.
The lottery raised $32 million for college scholarships, compared to $32.5 million in the same period in fiscal 2021.
The lottery’s unclaimed prize reserve fund totaled $2.8 million at the end of October, after receiving $127,936 in unclaimed prizes last month.
Hagler said total lottery revenue is $32.3 million better than the lottery budget forecast, and the amount raised to give the college $6.1 million better than the lottery forecast through October 31.
“We recognize that rising fuel costs, commodity inflation, and supply chain constraints are raising questions about uncertainty as we go about half a year,” he said.
“All of these issues were factored into our FY22 budget, and while we are pleased with the early performance, we are also cautious in revising our expectations.”
For fiscal year 2022, Hagler conservatively forecast a decline in total revenue from a record $632.5 million in fiscal year 2021 to $509.2 million. He predicted a drop in the amount raised for college grants from a record $106.6 million in fiscal year 2021 to $88.6 million.
Scholarships
The Arkansas Academic Challenge awards are funded from lottery proceeds, plus $20 million annually in general state revenue.
The state’s Department of Higher Education forecast that it will provide $90 million in scholarships to 31,000 students in fiscal year 2022, after awarding about $86 million in fiscal year 2021.
So far in fiscal year 2022, the department has provided Academic Challenge scholarships to 27,813 students and has disbursed $36.09 million in these scholarships, said Nick Fuller, assistant director of finance for the state Department of Education.
The amount awarded for Academic Challenge awards peaked at $132.9 million in fiscal year 2013, and went to 33,353 students. Total scholarships have decreased in large part because the legislature has reduced the amount of initial scholarships several times.
The 2017 Legislature created the Workforce Challenge Scholarship to use the excess proceeds to provide up to $800 annually to students enrolled in programs that lead to qualifications in high-demand occupations.
Department officials said they expect to distribute $450,000 for these scholarships in fiscal year 2022. In fiscal year 2021, the department reported that it distributed $487,865 in workforce challenge grants.
“For the Workforce Challenge, we have awarded 1,335 students and disbursed $234,383” so far in fiscal year 2022, Fuller said.
The 2019 Legislature created the Lottery Funded Concurrent Challenge Program. Juniors and high school seniors are eligible to receive scholarships for the semester or academic year in which they are enrolled in an approved concurrent course or program.
For the 2022 fiscal year, the department plans to distribute $2.7 million in these scholarships to 13,000 students. For fiscal year 2021, the department reports that it provided $2.4 million in concurrent challenge scholarships to 14,091 students.
Fuller said the Concurrent Challenge Program has awarded scholarships to 4,296 students and has disbursed $787,246 in scholarships so far in fiscal year 2022.
“This got very few students getting more prizes than the money spent from the last update,” he said. “This is due to a few of the larger lists that were sent to us, but the money was not sent to the foundation on behalf of these students.”
Fuller added that the Arkansas Academic Challenge, Workforce Challenge, and Concurrent Challenge scholarship programs “appear to continue to keep pace with our initial expectations for year-end totals at this time.”
