(The Center Square) – Waning stimulus funds and runaway inflation eating up family entertainment budgets led to a 20% reduction of total revenue for the Arkansas Lottery, according to the director’s report.
In April 2022, the Arkansas Lottery’s revenue was $51.8 million, down from $65.5 million the previous year, said Eric Hagler, executive director for the Arkansas Scholarship Lottery.
“We came off historic numbers that were pandemic driven,” Hagler said during his report to the Lottery Oversight Subcommittee Wednesday. “Stimulus money in the economy, limited venues, lottery was essentially one of the few forms of entertainment that were available during the last fiscal year. This year we’ve seen a little bit of a different scenario unfold.”
A downturn in lottery revenue was expected after unusual highs during the pandemic, Hagler said, adding those numbers were not viable to count on moving forward.
“We understood the effects of stimulus, we understood the effects of the pandemic and we understood how we were unique and essentially benefiting from that scenario in our sales,” said Hagler.
Net proceeds from the lottery in 2021 were $103.6 million, according to the Office of the Arkansas Lottery.
Net proceeds are predicted to be $88.6 million for fiscal year 2022, and the OAL expects it will be $91.4 million for fiscal year 2023.
“We’re plowing through a serious recession,” Hagler said. “The economy is not favorable to retail. We sell in a retail market and when our retailers are impacted, we’re impacted as well.”
The OAL’s budget, which is self-funded and does not receive taxpayer dollars, forecasts total operating revenue for fiscal year 2023 to be $535.9 million, which is below last year’s high of $632.5 but more than the $509.2 million in operating revenues forecasted for 2022.
“The way we built the budget was we peeled out what we felt like was the effect of stimulus,” said Hagler. “So whatever we felt like federal stimulus dollars, enhanced unemployment, PPP programs, any of these things that increased cash into the economy, we tried to extract those back out and deal with what we call pure economy.”
Despite what Hagler called a “tough market,” he said the lottery was performing well and expects to book the second-best year in lottery history for sales and net proceeds.
Net proceeds for the Arkansas lottery are expected to be $91.4 million for fiscal year 2023, compared to the $88.6 million brought in the previous year.
“When we look at budget and look at performance, we’re happy with where we’re at,” said Hagler.
The lottery funds college scholarships for Arkansas students.
