The Arkansas Scholarship Lottery's total revenue slipped in May compared to a year ago, but the amount raised for scholarships in May exceeded year-ago figures with the help of increased draw-game ticket sales.
For the lottery, draw-game ticket sales are more profitable than scratch-off ticket sales.
The lottery's revenue in May totaled $48.5 million, a drop from the $50.3 million collected in May 2023, the lottery reported Monday in its monthly report to Gov. Sarah Huckabee Sanders and the Legislative Council's lottery oversight subcommittee.
The lottery's scratch-off ticket revenue slipped from $42.6 million in May 2023 to $39.1 million last month, while the lottery's draw-game ticket revenue increased from $7.5 million in May 2023 to $9.3 million last month, according to the lottery's reports.
Mike Smith, the lottery's gaming director, said Monday that the lottery's total revenue dipped last month compared to a year ago due largely to the exceptional scratch-off ticket revenues in May of 2023. Scratch-off ticket revenue declined in May from a year ago primarily as a result of having two game launches in May 2023 and no game launches last month, he said.
He said the Mega Millions and Lotto draw games were the main drivers of the increased draw-game revenue in May compared to a year ago, and both games had a very good month.
The lottery's Mega Millions ticket revenue increased from $1.1 million in May 2023 to $2.1 million last month, Lotto ticket revenue increased from $511,190 in May 2023 to $1.2 million last month and the lottery's Powerball ticket revenue increased from $1.8 million in May 2023 to $1.9 million last month, according to the lottery's reports.
The Arkansas Scholarship Lottery's other draw games include Cash 3, Cash 4, Fast Play, Lucky for Life and Natural State Jackpot.
The lottery's amount raised for college scholarships totaled $9.5 million last month, up from $9.1 million in May 2023, according to the lottery's reports.
Smith said the lottery raised more for college scholarships in May compared to a year ago because draw-game ticket revenue was up and typically carries a higher margin, and operating income and interest income also were higher.
May was the 11th month of fiscal year 2024, which ends June 30.
During the first 11 months of fiscal 2024, lottery revenue totaled $568.3 million, up from $561.1 million in the same period in fiscal 2023, according to the lottery's reports.
During the first 11 months of fiscal 2024, the lottery's scratch-off ticket revenue totaled $442.1 million -- an increase from $437.3 million in the same period in fiscal 2023 -- and the lottery's draw-game ticket revenues totaled $125.5 million, an increase from $123.1 million in the same period in fiscal 2023, the lottery reported.
During the first 11 months of fiscal year 2024, the amount raised for college scholarships totaled $109.3 million, an increase from $97.8 million in the same period in fiscal 2023, according to the lottery's reports.
At the end of each fiscal year, the lottery transfers the balance of its unclaimed prize reserve fund, minus $1 million, to scholarships. The lottery's unclaimed prize reserve fund totaled $10.9 million at the end of May after receiving $1.2 million in unclaimed prizes in May.
For all 12 months of fiscal 2024, the lottery has projected total revenue of $567.9 million and raising $100.7 million for college scholarships.
In fiscal 2023, which ended June 30, the lottery initially reported raising $114.7 million for college scholarships, the largest amount it has produced in any fiscal year. The lottery's previous high for scholarships was $106.6 million raised in fiscal 2021, which ended June 30, 2021.
But Jerry Fetzer, the lottery's chief fiscal officer, has said "the net proceeds amount for (fiscal) 2023, as initially reported to the (Lottery Oversight Subcommittee) in July 2023, was $114.7 million. However, the final audited (fiscal) 2023 net proceeds amount was $113.1 million due to audit adjustments primarily related to our pension and employee post-employment benefits plan adjustments."
The lottery's revenue in fiscal 2023 totaled $608.2 million, lagging behind the $632.5 million collected in fiscal 2021. In fiscal 2021, lottery officials attributed the performance in part to factors brought on by the covid-19 pandemic, such as people spending more time at home.
Former lottery director Eric Hagler attributed the record amount of money raised for college scholarships in fiscal 2023 to collecting more draw-game ticket revenue in that fiscal year.
In fiscal year 2025 that begins July 1, the lottery has projected $570 million in total revenue, including $471.1 million in scratch-off ticket revenue and $99.3 million in draw-game ticket revenue and raising $106.7 million for college scholarships.
COLLEGE SCHOLARSHIPS
So far in fiscal 2024, the state Division of Higher Education has disbursed $74.3 million in Arkansas Academic Challenge scholarships and 28,743 students have been awarded scholarships, state Department of Education spokeswoman Kim Mundell said.
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 projected it will award 27,000 students Academic Challenge scholarships totaling $75 million.
Fiscal 2023 is the second consecutive fiscal year over the past 13 fiscal years in which Arkansas Academic Challenge scholarships were awarded to fewer than 30,000 students.
The amount handed out for 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.
Arkansas Academic Challenge scholarships are financed with lottery proceeds plus $20 million a year in state general revenue.
So far in fiscal 2024, the division has disbursed $924,343 in Workforce Challenge scholarships, Mundell said, and 1,115 students have been awarded those scholarships.
In fiscal 2023, the Division of Higher Education disbursed Workforce Challenge scholarships totaling $521,277 to 701 students. For fiscal 2024, the division projected awarding Workforce Challenge scholarships totaling $750,000 to 2,000 students.
In 2017, the 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 fiscal 2024, the division has disbursed $3.8 million in Concurrent Challenge scholarships and 8,680 students have been awarded those scholarships, Mundell said.
In fiscal 2023, the division disbursed Concurrent Challenge scholarships totaling $2.6 million to 13,982 students. In fiscal 2024, the division projects distributing Concurrent Challenge scholarships totaling $3 million to 17,000 students.
In 2019, the 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.
CHALLENGE PLUS SCHOLARSHIP
Act 386 of 2023 created the Arkansas Challenge Plus Scholarship program to provide additional funds for students based on their financial need.
The Challenge Plus Scholarship will first be awarded to students who qualify in the 2024-25 academic year.
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 (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 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.
Under Act 386, the sum of an Arkansas Challenge Plus Scholarship and Arkansas Academic Challenge Scholarship won't exceed $5,000 for each eligible student in an academic year.
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 sophom*ore year at a two-year college, $4,000 for the sophom*ore and junior years at four-year colleges and $5,000 for the senior year at four-year colleges.
The Challenge Plus Scholarship has been projected to cost about $13.5 million a year, according to an estimate from the Division of Higher Education.
The deadline to apply for scholarships on the state's Scholarship Application Management System is July 1.
