By Wanda Freeman
Stephens Media
FORT SMITH — From its early launch to its total intake 71 days later, the Arkansas Scholarship Lottery appears to be on track to deliver what its champion always promised: $100 million annually in college scholarships for Arkansas students.
The lottery began with the sale of scratch-off “instant win” tickets at nearly 1,500 retail outlets on Sept. 28 — a full month before the initial target date set by Lottery Director Ernie Passailaigue.
The first day brought in more than $1.2 million in ticket sales. Officials validated $720,000 in winnings, including 140 prizes of $1,000 and one prize of $20,000. Retailers earned $60,000 in commissions.
Sales reached nearly $10 million a week later, and prize payouts as of Oct. 6 totaled $8.2 million.
The first $100,000 winner was Joseph Kirk Pierce, a Van Buren store clerk, who collected his winnings hours before turning himself in to serve a jail term on misdemeanor sex offenses.
Barely three weeks into operations, the lottery commission paid off its startup debt to the state with a $2.8 million check.
In the first four weeks, with ticket sales totaling nearly $39 million, a second $100,000 jackpot went to a Stuttgart man.
On Oct. 31, Arkansas became the 31st state to participate in the multi-state Powerball drawing game, whose jackpot had grown to $66 million.
The lottery reached a major milestone on Dec. 8 when ticket sales surpassed $100 million. Over the first 71 days, sales averaged $1.4 million and players had collected $25 million in prizes.
When state lawmakers convene for their first even-year fiscal session in January, they will set scholarships for 2010 based on a projected net profit of 25 percent of sales made in 2009.
For Lt. Gov. Bill Halter, the lottery’s popularity and the millions it is generating for college scholarships is validation for the ballot initiative he spearheaded after the Legislature in 2007 passed on referring his proposal for a lottery amendment to the 2008 general election.
After Halter’s lottery campaign gathered more than 100,000 signatures to quality the measure for the ballot, voters approved the scholarship lottery amendment by nearly a 2-to-1 margin.
The Legislature approved enabling legislation for the lottery program this year and Gov. Mike Beebe signed Act 606 of 2009 into law in March.
A nine-member commission was appointed to hire an executive director and oversee the lottery.
The lottery’s internal workings became controversial early on when the commission rejected scores of applicants who had applied for the position with a posted salary of $141,603 and instead recruited Passailaigue for $324,000. The salary comes close to the state-set maximum of $354,000 and is $100,000 more than Passailaigue was paid to run the South Carolina Education Lottery.
Passailaigue then hired two vice presidents from the South Carolina lottery at $225,000 each and a security director at the maximum salary of $115,644. He said the top positions required experience, and he promised to fill most of the lower positions with Arkansans who would be on track to take over later.
In late July, Passailaigue pared down his hiring plan and proposed several other cost-cutting measures. He asked for a payroll of $4.6 million, down from $5.2 million, and trimmed his staffing plan from 88 people to 77 people.
The commission accepted his payroll proposal as well as his suggestions to save money by using an Internet-based random number generator for lottery tickets instead of televised drawings, and by declining to sponsor sports or special events.
The Arkansas lottery works with two ticket vendors, Intralot of Athens, Greece, and Scientific Games of Alpharetta, Ga.
Scientific Games provides instant-win tickets and earns 1.75 percent of gross ticket sales.
Intralot provides tickets for drawing games and the system used to check instant-win results. The company earns 2.45 percent of gross ticket sales.
Instant-win tickets have averaged $9.3 million a week in sales, compared to $1 million a week for the multi-state Powerball.
Cash 3, Arkansas’ first in-state drawing game, began Dec. 14. The state will begin cross-selling Mega-Millions, a multi-state ticket similar to Powerball, on Jan. 31.
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Wanda Freeman writes for the Times Record of Fort Smith
