The Arkansas Lottery is bragging about a record year in the fiscal year ending June 30, with $106.6 million in net proceeds for college scholarships on $632 million in revenue.
Its previous biggest year was $98 million in 2019. And the gross topped out previously last year at $532 million for the lottery, in business since 2009.
Executive Director Eric Hagler called it “extraordinary” in the pandemic year. It appears that the lottery — like drinking alcohol — proved a bigger salve for many in hard times. The infusion of government assistance payments likely provided fuel for many ticket purchases.
Hagler said he expects some downturn in the next year from limits on “discretionary spending” and the reopening of competing venues for entertainment.
From the release:
Hagler calls the lottery a win-win-win situation for everyone at every stage of the lottery process.
That’s a glass-half-full view of the lottery. The half-empty view is that it preys inordinately on those who can least afford it and offers unrealistic expectations of riches.
It’s a loser’s game, going strictly by arithmetic. Bettors poured $632.5 million into lottery tickets. Only about 16 percent will find its way into the pocket of scholarship recipients. Lottery players? The house always wins, about a 30 percent rake. In other words, for every dollar spent on lottery tickets, players get 70 cents back. Much better odds, near even money, can be had if you’re careful at the blackjack and craps tables at the state’s casinos. Slots, too, are returning more than 90 cents on the dollar.
Another factor missing in the win-win-win scenario is equity. When I could last get a report from the Higher Education people, scholarship awards disproportionately favored white students from more advantaged economic backgrounds. That’s the story of higher education in general, but the impact became more pronounced when, under the leadership of Sen. Jimmy Hickey, the legislature mandated use of test scores over grades as a qualifying measure for scholarships. It also took other steps that tended to weigh heaviest against those with the biggest college struggles (such as a reduced first-year payment, a time when struggles are the hardest.)
The lottery scholarship has become mostly an entitlement program for the middle class financed by poor people. It is now diverting some token amounts to high school students concurrently enrolled in college courses and some people enrolled in vocational training.
Also: The size of the scholarships, though undoubtedly welcome to all who receive the money, hasn’t kept pace with the rising cost of higher education. It’s still a win, maybe, but more like a Razorback victory over one of those directional schools.