Tuesday, July 12, 2011

Lottery falls shorter still of forecast

Posted by Max Brantley on Tue, Jul 12, 2011 at 3:40 PM

lotterylogos.JPG

Arkansas lottery revenue is almost $4 million lower than a reduced projection made only two weeks ago.

A year-end report on revenue for fiscal 2011, which ended June 30, shows that the Arkansas Scholarship Lottery will be able to pass $94.2 million on to Arkansas college students this year. That's almost $4 million less than the $98 million revenue projection made by lottery director Ernie Passailaigue at the very end of June. And that was the result of a downgrade from an earlier projection of $105 million.

The report was sent Monday to the Arkansas Lottery Commission Legislative Oversight Committee. Passailaigue had said earlier that the downgraded projection was due to customers favoring less profitable scratch-off tickets over more profitable Mega-Millions and Powerball games. He couldn't be reached Tuesday to explain the sudden further erosion in revenue.

Brandi Hinkle, a spokesperson for the Arkansas Department of Higher Education, said Tuesday that while the ADHC hasn't seen the report in question yet, the lowered figure shouldn't put any scholarships in jeopardy.

"We based the projections on the number of scholarships and the amount of each scholarship that would be awarded on different variables — kind of a best case and a worst case scenario," Hinkle said. "That amount [$94.2 million] actually comes in about mid-range of what we'd estimated, so it should not impact the number of scholarships or the award amounts of scholarships for this year."

The scholarships now pay $4,500 a year for new recipients going to four-year colleges, a reduction from $5,000 paid for the first year of the program because of below-expected revenue and demand. Loss of $4 million means a loss of support equivalent to almost 900 scholarships. Around 31,000 students, including 12,000 entering students, will receive lottery aid in the coming year.

Here's the year-end lottery report, which includes some figures on county-by-county sales, demographics of lottery ticket purchases and more information.

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Speaking of Arkansas Lottery, Ernie Passailaigue

Comments (18)

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Bosses are doing a poor job. You know what happens in bidness when you perform poorly. No excuses. Your ass is gone. Your sub-asses are reduced.

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Posted by eLwood on 07/12/2011 at 4:06 PM

You mean the tax on the poor isn't all its cracked up to be? You mean Liberal Bill Halter and gang made bad predictions on how many scholarships this would bring in even increasing year after year? How about the $200K lottery marketing director comment as to why people aren't getting out there to send other people's kid to college? Maybe Big Ern could get out of the big corner office and explain this crap as well. But no surprise here. nooooooo sir.

What I cant wait for are the statistics of the freshman lottery scholarship class to come out. How many will actually graduate and how many will actually get jobs and stay here in good ol Arkansas? The lottery is one of the more flawed systems I have ever witnessed. I know of a student with his college completely paid for that still receives lottery scholarship money that goes straight into his bank account. Talk about winning the lottery.

The bubble of the college degree will continue until every young person is slatted with debt up to their eye balls with past glory of lottery scholarships, wasting away while Obama and company pays out trillions of checks to sit at home and stare at their high school diploma. Cue up the jazz....What a wonderful world!!!!!

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Posted by B Rock Sucks on 07/12/2011 at 4:09 PM

I ain't got enuff gas to put in my pickemup truck to get to town to buy my scratch-offs, why ya gotta go and blame me???????
When i win that there lotto I will put all my kids thru High School.If I would have had some learnin i would know what 5,000,000:1 odds meant in winning that there lottary.
Mildred get the milk money, cuz we is going to town--I just siphoned some gas from my lawn mower. We gonna win $5,000,000 by puttin down $1. Yee Haa

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Posted by Loveliberalwhiners on 07/12/2011 at 4:45 PM

So the complaint is an inaccurate prediction of revenue?

What was your prediction? Was it closer to the actual or further off?

Are you disappointed more sops didn't squander their money or are you happy less did?

Also to the 4:09 poster - the scholarships are not need based so yes some just pocket it.

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Posted by Citizen1 on 07/12/2011 at 5:15 PM

Max, do we know the total annual salaries of the Arkansas Scholarship Lottery staff?

From what I can recall, they are not only out of line with comparable positions elsewhere within state government, some of them are above what lottery staff are being paid in other states.

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Posted by mountaingirl on 07/12/2011 at 5:48 PM

Mountain girl the release by ASL gives a figure for general administrative costs.
I don't if that will answer your question.

Ernie Pass-the-money makes way more than his previous employer was willing to pay.
His two out of state lieutenants are overpaid too.

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Posted by eLwood on 07/12/2011 at 6:05 PM

Demand is cultural and pretty much any market forecast is going to have wishful thinking in it somewhere.

To me, it's just another failure of conservative philosophy. Improve the general welfare with a free market solution: selling lottery tickets. Yep. Got us a winner there.

We ought to have a lottery for health care. Who wouldn't play it? Can you imagine the smile on a child's face when she learns that she's going to get chemo for her cancer instead of dying? Wow.

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Posted by ChildeRolandReturneth on 07/12/2011 at 6:12 PM

Thank you eLwood...

The Lottery staff salaries have been a concern from the beginning.

http://arkansasnews.com/2009/07/14/lawmake…

The Arkansas Lottery, having the third highest paid director in the country, and continuing to have these shortfalls in scholarship money seems to warrant closer inspection.

I love the concept of Arkansas students having the opportunity to access tuition assistance......providing the maximum benefit is going to them and not to an executive's paycheck.

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Posted by mountaingirl on 07/12/2011 at 6:45 PM

Yet Ernie and his gang, just like the gang down at LR city hall, are still rolling in the dough as far as their pay checks!!!!

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Posted by Clayton J on 07/12/2011 at 7:30 PM

Here’s the good and irrefutable news about the lotto: 12,377 Academic Challenge scholarships have been awarded to new Arkansas high school graduates for the coming school year, the second year of awards under the Arkansas lottery.

At the same time, the state Dept. of Higher Ed continues to evaluate 31,031 applicants who were awarded scholarships last year to see if those students will get their grants renewed.

About 70,000 students applied for scholarships this year. Is that great or what? Not everyone will quality, though. Too bad.

Mountaingirl, I think Ernie P’s current salary (effective after a raise earlier this year from his starting salary of $324,000) is now $330,480. Doubtless, he’s one of the highest paid lotto directors in the country. Which is fine with me.

In the link you provided, I notice that state Rep. Mike Burris expressed “concerns” about the high salaries going to lottery employees. “It’s a lot of money,” he said. “There may be a reason — reasons that I don’t know about, that I don’t understand — but I think the salaries are high.”

One would think that Burris, of all people, would "know” and “understand” why Ernie’s salary and the salaries of his staff are as high as they are. Considering that Ernie and his people have taken us from zero to somewhere around $900,000,000 in lotto ticket sales in LESS than two years, and considering the fact that 50,000 Arkansas young people have been given scholarships says to me that they are worth every dime of their salaries.

Odd that Burris can’t see that. Of course, like many Arkies, he probably thinks that any salary in excess of $50K per year is excessive. Think poor, be poor: It seems to be our mentality.

By the way, the shortfalls in scholarship money that are of concern to you are primarily the result of there being many more-than-anticipated applicants for the scholarships. Nobody saw THAT coming. Something that IS predictable is that ticket sales will decline over time, for a variety of reasons.

One other thing before I sign off: Bishop Woosley, the lotto’s attorney, now has a salary of $115,644 after getting a raise earlier this year. Joanna Bunten, the advertising director, has a salary of $79,082 after getting a raise. Both raises (as well as other salary increases) were recommended by the state Office of Personnel Management based on their guidelines.

Julie Baldridge at the lotto could and would tell you anything else you wanna know.

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Posted by Durango on 07/12/2011 at 7:42 PM

Nice long story Durango but in science we call this a plot with 1 point. A plot with one point has NO value. You cannot make a linear relationship between AR's Earnie being our savior unless you gave someone (and actually three are needed to draw a line or make a real correlation) the chance at the same time to do the same, which we never did, even though it was requested by members of the board.

In other words you make an argument that ends with you standing 10 feet off the cliff and saying..."boy I hope I can fly".

Or to put it more directly I will take your premise and use it for a couple things to look at....that stinky old stimulus plan was the wrong thing...the "real" solution was just if we had cut more taxes it WOULD have been so much better....

or even more simple....just because the sun rises in the east every morning doesn't mean it STILL can rise in the west tomorrow....

Or as we say in science Durango, you can NEVER make a positive out of a negative and especially a NULL.

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Posted by Clayton J on 07/12/2011 at 8:11 PM

I wouldn't discount the high price of gasoline as a reason for the drop in projections. The higher gas costs certainly seem to hit retail. Unless you work at City Hall in The Rock, you only have a set amount to spend and transportation is a cost for a lot of people. At least that is what WM is saying about their 8 straight flat quarters. Personally, having walked through the older Conway store from one side to the other this morning, I might want to shop at a store where I saw at least one smiling face or where the "store manager" respomnds when spoken to. I get more friendly looks and greetings at Kroger from the cart shagger in this heat than I saw thoughtout the WM store. Even the greeter wasn't.

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Posted by couldn't be better on 07/12/2011 at 8:16 PM

Do you all remember me saying, when the idea of a lottery first arose, that gambling does not pay? Compare the scholarships to all the suffering. Rich and middle-class kids got the scholarships; poor people paid.

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Posted by plainjim on 07/12/2011 at 8:33 PM

Ernie P. did exactly what he was hired to do & your complaints are just sour grapes. People who are opposed to the lottery or to gambling are not required to participate or to apply for the scholarships. You can always move to one of the surrounding states where all our lottery scholarship money used to go.

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Posted by Hackett on 07/12/2011 at 11:01 PM

Hackett, I was a strong supporter of bringing the lottery to Arkansas. Before I moved back to my home state, I lived in three different states that had their own lotteries. I saw first hand the benefits cash-strapped schools and students in those areas received as a result of their lotteries, and I wanted those things for Arkansas also.

My only concern here is that our students receive the maximum benefits. We all benefit when that happens.

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Posted by mountaingirl on 07/12/2011 at 11:41 PM

Still think it would have been cheaper in the longer run and made more fiscal sense to have told Earni, "We'll give you $1,000,000 if you can get the lottery up and running in two years. Oh, you'll also have to teach a $100,000/y employee to run it after you are gone"

But I'll bet you a hundred bucks that the "He's worth $300,000 a year" will shift to "Yeah, running a stable lottery is a lot harder than being Governor or Chancellor so we have to pay the next guy a quarter of a million too.

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Posted by mudturtle on 07/13/2011 at 6:32 AM

I work at a store that sells lotto and most of the people buying the tickets are very poor; it is sad to see. I have also noticed more and more that the tickets are not paying off very often at all. A man bought 10 of the $10.00 tickets one day and scratched them off right there in the store and won nothing. It happens a lot.

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Posted by Arkansas Employee on 12/18/2011 at 12:11 AM

I work in a store in Arkansas that sells lotto and it is really sad because it is mostly poor people buying them, often scraping up change from the bottom of their purse. I have noticed that in the past 6 months, the number of winning scratchers is way down. I watched a man scratch off 10 of the $10.00 tickets the other day and he won nothing. It happens a lot now.

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Posted by arkansas person on 12/18/2011 at 12:15 AM
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