Lottery likely won’t meet $90 million projection, director says

LITTLE ROCK — Proceeds from the Arkansas Scholarship Lottery likely will fall short of an estimated $90 million projected for the current fiscal year, the lottery director said Wednesday.

Also Wednesday, the Arkansas Lottery Commission voted to hike mileage reimbursements for lottery employees.

Director Bishop Woosley told the nine-member panel that net proceeds have been below projections for the past five consecutive months. The lottery’s net proceeds for the first six months of the fiscal year that began July 1 total $36.7 million, down 9.5 percent from the $40.5 million the lottery netted in the first half of the last fiscal year, he said.

“I’d like to at this point go and review with my team and the ALC team to amend the (revenue) projections down a little bit,” Woosley said.

He said he did not know how far below $90 million his revised projection for lottery profits would be.

Woosley attributed the decline in proceeds to a slump in sales of scratch-off tickets and the failure of the lottery’s Million Dollar Raffle, which he said ended up losing about $284,000.

For whatever reason, players “didn’t take to it,” Woosley said of the raffle.

He said the timing of the raffle — the drawing was on New Year’s Eve — may have been a factor in its failure to break even or make a profit. The game was devised to bolster revenue in the slow period of the year.

“It may be a slow time of the year for a reason. People may just be spending on Christmas or the holiday,” he said.

Woosley said one piece of good news was that net proceeds for the year to date from draw games were up by $6.8 million compared to the same time a year ago. He said a Mega Millions jackpot that reached $636 million, its second-highest amount ever, boosted ticket sales, although not by as much as lottery officials had hoped.

In the run-up to that drawing, Mega Millions ticket sales in Arkansas totaled $7.2 million, well below the $10.7 million in sales that preceded the drawing for a $640 million Mega Millions jackpot in 2012.

Woosley also told the commissioners he has a number of things planned to boost revenue in the coming months, including new scratch-off games and a coupon to be printed in newspapers that will give players $1 off the purchase of a scratch-off ticket.

The commission voted 5-4 Wednesday to raise lottery employees’ reimbursement rate from 42 cents per mile, the rate that employees of other state agencies receive, to the reimbursement rate for federal employees, which was lowered on Jan. 1 from 56 1/2 cents per mile to 56 cents per mile. The change will not apply to the commissioners.

Commissioner Doug Pierce of Jonesboro argued in previous meetings for the increase, noting that the lottery’s sales and marketing representatives travel extensively in their own vehicles as part of their job.

Ben Pickard of Searcy argued against the increase Wednesday. He said the Legislature has given the commission the power to deviate from the procedures required of other state agencies — which have to submit proposed increases in employee benefits for legislative review — but “in my opinion this was set up for large issues. … There are a number of larger issues that may come up.”

Pickard also said the Legislature might reverse the commission’s action.

Bruce Engstrom of North Little Rock, who voted for the increase, said he sought input from the legislative oversight committee on the lottery, and the feedback he received was that “we were entitled to do whatever we wanted to do.”