A $2 billion Powerball jackpot fueled the Arkansas Scholarship Lottery's fortunes in November.
The lottery's revenue in November increased by $11.4 million over a year ago to $58.5 million and the amount raised for college scholarships increased by $3.4 million from a year ago to $10.6 million, the lottery reported in its November report to Gov. Asa Hutchinson and the Legislative Council's lottery oversight committee.
Lottery Director Eric Hagler said the key to the lottery's performance in November "was, in general, the revenue associated with the Powerball jackpot."
"Of course, our core games and in-state offerings performed well against our expectations," he said Monday in a written statement. "However, November results illustrate the importance of participation in the multi-state games, such as Powerball and Mega Millions. It sometimes tends to get unnoticed that significant second-tier prizes have been won by Arkansans."
The lottery's Powerball revenue in November totaled $11 million, up from $2.1 million a year ago, according to the lottery's reports. The Powerball jackpot reached $2 billion -- the largest ever in the United States -- on Nov. 7 and a winning ticket was sold in Altadena, Calif.
The lottery's draw game revenue in November totaled $18 million -- a substantial increase from $7.2 million a year ago -- and the lottery's scratch-off ticket revenue last month reached $40.4 million -- up slightly from $39.8 million a year ago.
Besides Powerball, the lottery's other draw games include Mega Millions, Natural State Jackpot, Fast Play, Cash 3, Cash 4, Lucky for Life and LOTTO.
Asked whether declining gas prices are helping boost lottery ticket sales, Hagler said "when isolated as a single economic barometer, we believe that declining prices at the pump represents a positive in regard to lottery sales.
"It is important to remember, however, that other consumer costs in grocery and retail are higher than the previous 18 months," he said. "It is also important to keep in mind that the reduction in fuel prices is merely a measure against the recent record prices."
AAA reported Monday the average price of unleaded gasoline in Arkansas is $2.80 a gallon -- down from $2.92 a gallon a week earlier and $3.25 a gallon a month before Monday. A year ago, the average price of unleaded gasoline in Arkansas was $2.94, according to the AAA. The highest recorded average price of unleaded gasoline in Arkansas was $4.54 a gallon on June 14.
About 1,097 of the lottery's 1,968 retailers are convenience stores that sell gas, Hagler said.
The lottery has been selling tickets since Sept. 28, 2009, and has helped fund Arkansas Academic Challenge Scholarships for more than 30,000 students during 11 of the past 12 fiscal years.
The lottery's revenue and amount raised for college scholarships in November are a record for the month.
November is the fifth month of fiscal year 2023, which started July 1.
During the first five months of fiscal 2023, the lottery's revenue reached $252.2 million, a $14.2 million increase over the $238 million in the same period in fiscal 2022.
"With five months booked in the fiscal year, we are currently outperforming budget by $36,774,786.15 (+14.5%)," Hagler said in his written statement.
The lottery's draw game revenue totals $61.6 million so far in fiscal 2023, compared with $41.5 million in the same period in fiscal 2022, while the lottery's scratch-off revenue is $190.2 million so far in fiscal 2023 compared with $196.1 million in the same period in fiscal 2022.
Sales of the lottery's draw-game tickets are more profitable to the lottery than sales of scratch-off tickets.
During the first five months of fiscal 2023, the lottery has raised $46.9 million for college scholarships, compared with $39.2 million in the same period in fiscal 2022.
At the end of each fiscal year, the lottery transfers the unclaimed prize reserve fund balance minus $1 million to college scholarships.
The lottery's unclaimed prize reserve fund totaled $5.2 million at the end of November, after receiving $1.4 million from unclaimed prizes in November.
For fiscal 2023, the lottery is projecting total revenue of $535.9 million and raising $91.4 million for college scholarships.
In fiscal 2022, the lottery collected revenue of $580.2 million and raised $99.7 million for college scholarships. They were the second-largest amounts that the lottery has reported in any fiscal year, trailing only fiscal 2021 when the lottery collected revenue of $632.5 million and raised $106.6 million for college scholarships.
Lottery officials have attributed fiscal 2021's record numbers in part to factors brought on by the covid-19 pandemic.
SCHOLARSHIPS
The Arkansas Academic Challenge scholarships are financed with lottery proceeds, plus $20 million a year in state general revenue.
So far in fiscal 2023, the Division of Higher Education has handed out Academic Challenge Scholarships totaling $31.3 million to 27,664 students, according to Nick Fuller, the division's assistant director of finance.
In fiscal 2022, which ended June 30, the division awarded a total of $75.1 million in Arkansas Academic Challenge Scholarships to 28,716 students.
Fiscal 2022 is the first fiscal year in the past 12 fiscal years that Arkansas Academic Challenge Scholarships were awarded to fewer than 30,000 students. Fuller has 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.
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 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 fiscal 2023, the Division of Higher Education has handed out Workforce Challenge Scholarships totaling $304,998 to 1,969 students, Fuller said Monday.
In fiscal 2022, the division awarded these scholarships to 690 students and disbursed $605,694. In fiscal 2023, the division projects it will distribute Workforce Challenge Scholarships to 1,000 students and disburse $1 million.
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.
So far in fiscal 2023, the division has handed out Concurrent Challenge Scholarships totaling $920,809 to 4,298 students, Fuller said.
For the Concurrent Challenge program, the division awarded scholarships to 16,432 students and disbursed $2.7 million in fiscal 2022. In fiscal 2023, the division projects awarding Concurrent Challenge Scholarships to 13,750 students and disbursing $2.75 million.
Division of Higher Education Director Maria Markham said in a letter dated Dec. 2 to lottery oversight committee co-chairs Sen. Ronald Caldwell, R-Wynne, and Rep. Gary Deffenbaugh, R-Van Buren, that she recommends the creation of a scholarship appeals process to consider exceptions for students failing to meet continuing eligibility requirements for programs, including the Arkansas Academic Challenge Scholarship program.
She said she also recommends the addition of a needs-based component to the Arkansas Academic Challenge Scholarship program in order to address the unmet needs of eligible low-income students within the state.
In the 2021 regular session, Republican Gov. Asa Hutchinson signaled his support for the creation of a needs-based scholarship program and he asked school district superintendents to back the initiative.