By John Lyon
Arkansas News Bureau

LITTLE ROCK — The state lottery should be debt-free in another week, its director said today.

After getting off to an estimated $9.8 million start in its first week of operation, the lottery should be able to repay a $6 million start-up loan approved by the Legislature earlier this year on Oct. 15, Lottery Director Ernie Passailaigue told the state Lottery Commission.

By Sept. 30 the lottery had spent $2.2 million of its start-up funds, Passailaigue said. Administrative costs from July 1 through Sept. 30 totaled $1.2 million.

Scratch-off tickets went on sale Sept. 28. A week later, total sales were estimated at $9.8 million, and by the close of business Tuesday sales were estimated at $12.6 million. Prize payouts through Tuesday totaled $8.2 million.

Ray Thornton, the commission’s chairman, said it was noteworthy that “soon we will be out of the taxpayers’ expenditure and operating 100 percent as a … public corporation, not enjoying any taxpayers’ funds but living within its means on revenues and expenses of the lottery business itself.”

The lottery’s net proceeds will fund college scholarships for Arkansas students. Thornton said the lottery initially was expected to start in early 2010, but thanks to an early start it may net $30 million by the end of 2009.

That’s also the amount the state devoted to the Arkansas Challenge Scholarship and the Governor’s Scholarship Program for 2009, Thornton said.

“I am elated that by the end of this year, if things go as they are beginning, we will have raised $30 million, the entire amount of scholarships furnished by the state in the past before this lottery was supposed to begin,” he said. “Talk about success!”

Also today, Passailaigue presented a preliminary budget that projected $400 million in gross sales and $102.4 million in net proceeds for the lottery’s first year of operation. He said he based his budget figures on estimates of the lottery’s initial sales, which he said are “conservative, maybe by at least 20 percent.”

Lt. Gov. Bill Halter, who proposed the constitutional amendment that voters approved last year to create the lottery, said in a news release Wednesday he was happy to see that Passailaigue’s preliminary budget matched his prediction, first made more than two years ago, of $100 million in net proceeds from the lottery.

“We were also happy to hear that the Lottery Commission, vendors and staff prefer to be conservative with their projections,” Halter said.

An early projection by the state Department of Finance and Administration estimated the lottery would net $55 million a year for scholarships.

Passailaigue also presented today a timeline for expanding the lottery.

The lottery will add four new scratch-off games on Oct. 20, and eventually players will be able to choose from about 24 scratch-off games, he said.

Tickets for the multi-state Powerball game are scheduled to go on sale in Arkansas on Oct. 31. The first Arkansas-only draw game, Cash 3, will launch on Dec. 14, and another draw game, Cash 4, will launch in early 2010, probably in mid-February, Passailaigue said.

The lottery will launch a raffle game — with better odds of winning as much as $1 million than any other lottery game — in mid-to-late 2010, Passailaigue said. He said the lottery will join another multi-state game, either the existing Hot Lotto or a new multi-state game involving only Southern states, also in mid-to-late 2010.

The lottery started with just under 1,500 retailers, but that number should grow to 1,800 by the end of October and 2,000 by the end of the year, Passailaigue said.

Passailaigue made no mention of monitor games in his timeline, though lottery officials have told vendors they may want to add the games. Some, including Gov. Mike Beebe, have questioned whether allowing people to play games on video monitors would go beyond what voters approved when they passed the lottery amendment.

Passailaigue said after today’s meeting that monitor games are not included in his preliminary budget and are not “on my radar scope.” The games are not a big issue financially, he said.

Any decision to add monitor games would be “vetted in a public forum,” Passailaigue said.