Proposal to raise Arkansas Scholarship Lottery payout defeated after debate

The Senate Education Committee debated Senate Bill 6 49, a measure sponsored by Senator Charles Beckham that would require a phased increase in the Arkansas Scholarship Lottery payout rate from the current audited average (cited by the lottery director as 18.64%) to 20% on June 30, 2022 and to 25% by June 30, 2027.

Eric Hagler, director of the Arkansas Lottery, urged the committee to vote against the bill. "Since the inception of the Arkansas scholarship lottery, the return on that investment averages annually 18.64%," Hagler said, adding that the lottery is running "more like a conservative business" and that a statutorily mandated payout would "attempt to fix something that's not broken." He warned that vendor contracts, planning and printing schedules for fiscal year 2022 were already locked in and that a mandate could force the agency to abandon current plans.

Ken Yang of the Arkansas Family Council and other advocates pushed for the change. Yang cited national comparisons and news reporting that Arkansas pays one of the lowest percentages of proceeds to its stated purpose and argued that a 25% payout could increase scholarship funding by more than $10 million, even if revenues declined.

Committee members questioned Hagler about how the remaining roughly 82% of proceeds are spent; Hagler said vendor compensation and game-portfolio imbalance explain much of the remainder and that administrative costs (exclusive of vendor expenses) were "slightly under a million dollars a year," but he said he would provide a fuller audited breakdown. Several senators warned that a fixed mandate could force cuts in marketing or other functions during downturns or lock the lottery into operational constraints.

After closing remarks and a voice vote, the chair announced the noes have it and SB 6 49 did not pass the committee.