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Thursday, July 12, 2012

Lottery profit smaller than it appears

Posted By on Thu, Jul 12, 2012 at 9:15 AM

click to enlarge PURE PROFIT: Ernie P.'s departure produced $324,000 annual profit for lottery.
  • PURE PROFIT: Ernie P.'s departure produced $324,000 annual profit for lottery.

PURE PROFIT: Ernie P.s departure produced $324,000 annual profit for lottery.
  • PURE PROFIT: Ernie P.'s departure produced $324,000 annual profit for lottery in salary saving.
Big headlines this morning for the news yesterday that the Arkansas Lottery finished the fiscal year June 30 $3.4 million ahead of last year.

Of course, $2 million of that came from a partial giveback by vendor Scientific Games of the sweetheart contract revision deal cut without commission or legislative approval by former Lottery Director Ernie Passailaigue. The Commission has since okayed the sweetheart deal, but not until after payments in excess of the original contract at a rate, if all had been realized, of an additional $3 million a year.

Forgot one other small item, too.

The lottery saved at least roughly $500,000 in salaries ended with the departure of Passailaigue and the two other members of the $774,000 Gamecock trio that scuttled home last year after a brief run at the top of the Arkansas lottery pecking order. And that $774,000 was just their salaries, not employee match overhead. Salary savings alone knock the true lottery profit increase below the $1 million level. None of the Gamecocks was replaced, you'll recall. Existing employees took up their duties.

All this matters only because if the lottery profits are hitting a static plateau, that means scholarship growth won't occur and, against rising college costs, will count for less.

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Speaking of Arkansas Lottery, Ernie Passailaigue

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