Arkansas Lottery April revenue $12.2M raised for college scholarships

in Lottery

Scholarship Lottery's revenue in April reached $65.5 million, a $16 million increase over the same month a year ago.

The total revenue last month fell short of the lottery's record for any month, which is the $67.9 million collected in March. The lottery has been selling tickets since Sept. 28, 2009, and has helped finance Arkansas Academic Challenge Scholarships for more than 30,000 college students during each of the past 10 fiscal years.

In April, the lottery raised $12.2 million for college scholarships, up from $8.3 million a year ago. The record amount raised for scholarships in any month is $13.8 million in January 2016.

The lottery reported these figures in its monthly report this week to Gov. Asa Hutchinson and the Legislative Council's lottery oversight committee.

In April, scratch-off ticket revenue increased by $13 million over the same month a year ago to $56.6 million, while draw game revenue increased by $2.9 million over April a year ago to $8.8 million.

Director Eric Hagler said scratch-off tickets "have traditionally been the meat-and-potatoes for Arkansas lottery players.

"As players and potential players develop knowledge around our draw game offerings, we expect to see an enhanced appetite for these games as well," he said.

The lottery's draw games include Powerball, Mega Millions, Natural State Jackpot, Cash 3, Cash 4, Lucky for Life and Fast Play. Draw game ticket sales are more profitable than scratch-off ticket sales, but the lottery has been largely dependent on scratch-off ticket sales since it began operating. At first, it sold only scratch-off tickets.

April is the 10th month of fiscal 2021, which ends June 30.

During the 10-month period, revenue has totaled $521.6 million, up from $418.4 million in the same period in fiscal 2020. The record total revenue in any fiscal year is $532 million collected in fiscal 2020, which ended June 30.

So far in fiscal 2021, scratch-off revenue has reached $434.7 million, up from $354 million in the same period a year ago, while draw game revenue so far has totaled $88.3 million, up from $63.8 million.

In the first 10 months of fiscal 2021, the lottery has raised $83.9 million for college scholarships, up from $65.8 million in the same period in fiscal 2020.

At the end of each fiscal year, the lottery transfers its unpaid prizes reserve fund balance minus $1 million to college scholarships. As of April 30, that fund totaled $7.7 million, after increasing by $95,350 last month, according to the report.

The lottery raised its largest amount for college scholarships in fiscal 2019, when net proceeds reached $98.6 million.

Asked about the prospects of the lottery raising $100 million for scholarships in fiscal 2021, Hagler said that with fewer than 50 days left in fiscal 2021, "we are trending towards hitting the $100 million Net Proceeds mark.

"Time will be the measure, but with recent issues involving gas supply we are cautious about celebrating such a milestone until it is officially in the books," he said.

The lottery's previous director, Bishop Woosley, had projected fiscal 2021 revenue at $456.8 million and the amount for college scholarships at $78.2 million. He said that in May 2020, not long after the start of the covid-19 pandemic.

SCHOLARSHIPS

Thus far in fiscal 2021, the Arkansas Division of Higher Education has distributed $86 million in Arkansas Academic Challenge Scholarships to 31,240 students, division spokeswoman Alisha Lewis said Wednesday,

It distributed $90.6 million of those scholarships to 31,469 students in fiscal 2020.

The division projects that it will hand out $90 million in these scholarships to 31,000 students in fiscal 2022, Lewis said.

These scholarships are financed with lottery proceeds and $20 million a year in state general revenue.

Academic Challenge Scholarships peaked at a total of $132.9 million in fiscal 2013, going to 33,353 students. The total amount awarded of that scholarship has dropped off largely because the Legislature cut the amount of the initial scholarship.

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

So far in fiscal 2021, the Division of Higher Education has distributed $487,865 in Workforce Challenge Scholarships, Lewis said. The division expects to distribute $450,000 of these scholarships in fiscal 2022.

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

Thus far in fiscal 2021, the Division of Higher Education has handed out $1.9 million in Concurrent Challenge scholarships to 11,418 students, Lewis said. In fiscal 2022, the division projects distributing $2.7 million of these scholarships to 13,000 students.

During this year's regular session, the Senate Education Committee balked at three bills that would have made changes to the Academic Challenge Scholarship program.

The three bills were:

• Senate Bill 648 by Sen. Lance Eads, R-Springdale, that would have created a need-based scholarship funded by lottery proceeds called the Arkansas Academic Challenge Plus Scholarship Program. Qualifying students would have had to maintain eligibility for the program and demonstrate financial need as determined by the Free Application for Federal Student Aid under the bill.

Arkansas has been one of the few states without a need-based program since lawmakers eliminated two aid programs in 2017, according to a 2019 draft of the proposal from the state Department of Higher Education.

• Senate Bill 457 by Sen. Breanne Davis, R-Russellville, that would have made people who are accepted into certain programs for people with intellectual disabilities eligible for the Academic Challenge Scholarship program.

• Senate Bill 462 by Sen. Joyce Elliott, D-Little Rock, that would have made a student who has either a score of 19 on the ACT or a grade-point average of at least 2.5 eligible for the program.

Act 1105 of 2015 -- sponsored by now-Senate President Pro Tempore Jimmy Hickey, R-Texarkana -- requires high school graduates to have ACT scores of at least 19 or the equivalent on comparable college entrance exams to be eligible for the Academic Challenge Scholarship. High school graduates previously were required to have completed the Smart Core curriculum or achieved either high school grade-point averages of at least 2.5 or minimum scores of 19 on the ACT or its equivalent.

Elliott told lawmakers last month that axing the 2.5 grade point qualification disproportionately affects students of color.

Act 1105 of 2015 also cut the size of the Academic Challenge Scholarship amounts for first-year college students. The scholarship was reduced from $2,000 to $1,000 for the freshmen year at the two- and four-year colleges, and increased from $3,000 to $4,000 for the sophomore year at four-year colleges and from $2,000 to $3,000 for the sophomore year at two-year colleges. Scholarship recipients receive $4,000 as juniors and $5,000 as seniors at the four-year colleges.

https://www.nwaonline.com/news/2021/may/13/lottery-april-revenue-655m/