Bolstered by a Mega Millions jackpot that reached $1.3 billion, the Arkansas Scholarship Lottery’s revenue in July increased from $47.5 million a year ago to $52.1 million.
The amount raised for college scholarships in July also increased from $8.3 million a year ago to $12.4 million, the lottery reported this week in its monthly report to Gov. Asa Hutchinson and the Legislative Council’s lottery oversight subcommittee.
The second-largest Mega Millions jackpot in history “played a great part in driving July revenues,” lottery Director Eric Hagler said.
The lottery’s revenue and net proceeds for college scholarships in July were the highest amounts recorded in the month of July by the lottery. The largest Mega Millions jackpot won was $1.5 billion in October 2018, according to The Associated Press.
The lottery has been selling tickets since Sept. 28, 2009, and has helped finance Arkansas Academic Challenge Scholarships since then.
the reopening of the larger economy have also likely served to benefit sales.”
The largest amount of money raised for college scholarships in any month was $13.8 million in January 2016, he said, when the lottery’s financial performance was fueled by a world-record $1.6 billion Powerball jackpot.
Last month, the lottery’s draw-game revenue increased from $7.6 million a year ago to $16.6 million, while the lottery’s scratch-off ticket revenue in July dropped from $39.9 million a year ago to $35.4 million, according to the lottery’s reports.
The lottery’s draw games include Mega Millions, Powerball, Natural State Jackpot, Fast Play, Lucky for Life, Cash 3 and Cash 4.
Draw-game revenue in July was primarily driven by the second-highest Mega Millions jackpot in history, Hagler said.
In July, the lottery’s Mega Million revenue totaled $9.9 million — up from $1.2 million in the same month a year ago — according to the lottery’s reports. Last month, the lottery’s Powerball revenue totaled $2.3 million — up from $1.7 million in the same month a year ago.
sales and happy that Arkansas saw two new millionaires as a result of winning secondary prizes,” Hagler said.
Asked about July’s drop in scratch-off revenue compared with a year ago, Hagler said “total player spend is relatively static in a state with a population of 3 million people.
“With a near record Mega Millions jackpot rolling during July, player preference shifted away from instant games,” he said. Scratch-offs are considered instant games.
The statewide average price of gasoline in Arkansas is $3.51 a gallon for regular unleaded fuel, the AAA reported Thursday. That compares with $3.67 per gallon a week ago, $4.25 a gallon a month ago, and $2.88 a gallon a year ago. The highest record average price for regular unleaded in Arkansas was $4.54 on June 14, according to the AAA.
Asked whether dropping gas prices are helping lottery sales or whether gas prices are still having a negative impact on lottery sales, Hagler said consumer discretionary income is not, alone, tied to the cost of fuel.
“And while the cost of fuel is a significant factor for consumer budgets, inflation is still in play as a headwind to discretionary consumer spending,” he said, noting the Department of Labor reported that consumer prices were up 8.5% in July. Consumers have been hit hard by rising prices for everyday necessities like food, gasoline, housing, transportation and utilities, he said.
In fiscal 2022 that ended June 30, the Arkansas Scholarship Lottery raised $99.7 million for college scholarships as the lottery’s gross revenue reached $580.2 million.
These are the second-largest amounts the lottery has reported in any fiscal year, trailing only fiscal 2021 when the lottery raised $106.6 million for college scholarships as its revenue totaled $632.5 million.
A year ago, lottery officials attributed fiscal 2021’s record numbers in part to factors brought on by the covid-19 pandemic.
For fiscal year 2023, which started July 1, the lottery has projected raising $91.4 million for college scholarships and $535.9 million in total revenue.
The Division of Higher Education awarded a total of $75.1 million in Arkansas Academic Challenge Scholarships to 28,716 students in fiscal 2022, said Nick Fuller, the division’s assistant director of finance. 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 years that Arkansas Academic Challenge Scholarships were awarded to fewer than 30,000 students.
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, Fuller 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.
For fiscal 2023, “we continue to use a conservative estimate for each program” financed with lottery proceeds, Fuller said.
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, Fuller said. The division has forecast it would distribute $450,000 for these scholarships in fiscal 2022.
In fiscal 2023, the division projects it will distribute Workforce Challenge Scholarships t0 1,000 students and disburse $1 million, Fuller 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, Fuller said. In fiscal 2023, the division is projecting awarding Concurrent Challenge Scholarships to 13,750 students and disbursing $2.75 million, Fuller said.
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