The politics of the Arkansas Lottery

The Arkansas Lottery Commission and its Director Bishop Woosley, in an effort to make a big correction in financial stability, may have recently caused the lottery agency to become an issue in the 2014 gubernatorial race.

While it is a little early to tell, with the May 20th primaries less than a month away, those with political sensibilities quickly picked up the “uh-oh” moment. That appeared when Sen. (and former Circuit Judge) David Burnett, D-Osceola, took issue with remarks made in a committee meeting about the future of online games, such a Keno. In essence, Burnett warned that the law, as he read it, didn’t allow for such broad types of gambling.

Others at the committee meeting seemed sensitive to the new games being added sans the public’s OK. Sen. Stephanie Flowers, D-Pine Bluff, was one who added the troubling assertion that perhaps these electronic games (to be presumably in drinking establishments) might prey upon the poorest of people.

No one seems to doubt that assertion.

But the electronic games were added a day later by the Lottery Commissioners – even over the previous day objections from the Legislative Committee. It was sort of a slap in the face of that legislative committee.

Next comes our Director of the State Department of Higher Education (and former legislator,) Shane Broadway to sound the alarm that the $20 million lottery scholarship reserve set aside when lottery proceeds fail to pay the amount of scholarships awarded will for the first time be tapped for funds.

All this, in concert, seems to ring a familiar alarm that was put in place when the state voted in the lottery games back in 2009. Remember the first tickets were sold on Sept. 28, 2009. And remember when Lottery Director Ernie Passailaigue of South Carolina came to help us kick off our Arkansas Lottery. Also recall Director Passailaigue’s proud pronouncement to our Legislators that the lottery could be expected to produce about $100 million a year for college scholarships.

Let that sink in for a moment. Exactly $100 million a year for college scholarships.

Under Passailigue’s tenure and the short term under Director Bishop Woosley, that $100 million goal has been close but never met. In fiscal 2010, the Lottery hauled in $82.7 million. Short of the mark, but good things are in store, and scholarships are being awarded in record numbers. Just be patient, the legislators were told. The nay-sayers were drowned out by the applause for better numbers in the next fiscal year.

And applause was indeed warranted as Arkansas was on the way it seemed to a mark of $94.2 million in fiscal year 2011. Still not $100 million, but getting closer, we were all told.

The lottery, even after some in-house embarrassments over taxes due and raises for employees, was heading more toward the goal with a performance of $97.5 million in fiscal year 2012. Almost there to the $100 million mark.

The exodus of Passaiaigue and some rather embarrassing developments from one of his hand-picked lieutenants from South Carolina in a ticket-cashing scam dampened legislator attitude toward the games. Yet with a $97.5 million mark, surely the state would achieve $100 million in the next fiscal year.

But the Lottery barely hit the $90 million mark in fiscal 2013. We seem to be going the wrong way. The reason for the meeting with the Legislature this past week was because of more bad news: Lottery proceeds through nine months of fiscal year 2014 have only generated $59.9 million.

Director Woosley and his staff (and an almost new board of appointees on the Lottery board), are struggling to keep interest high in the games. The tide they are fighting is the high interest in the scholarships. That was the warning from Broadway that the number of applicants will outpace the revenues so the $20 million reserve must be tapped to keep promises to the students.

We can see that the direct competition to the Arkansas Lottery is marketing. There are about 25-to-one television commercials for casino style gambling in adjoining states of Oklahoma and Missouri for each and every Arkansas Lottery advertisement. That same ratio applies to Oaklawn Park in Hot Springs. But once the ponies quit running in Hot Springs, the casinos in the Indian Nation keep on going all year long.

The Arkansas Lottery is trying to promote its larger profit games, such as Decades of Dollars, and its own version of a Powerball or Mega Millions game, but again the casino marketing here in our neck of the woods far, far exceeds any ads from the central Arkansas headquarters for the scholarship monies.

We hope things can turn around and the promises made can be kept, but if this becomes a campaign issue, it will be one which none of the potential candidates can really do anything about.

The Arkansas Lottery, approved by the voters you see, does have to answer to the Legislature, but sadly the elected solons can do little to help or hurt the lottery.