ALC Lottery: Dec. 15, 2205

Representative Justin Gonzales All right, it’s time to get started, I guess. Everybody get a seat. Chair sees a quorum. We’ll call this meeting to order. First on the agenda. Guess we took care of that, item A. So we’ll skip right to item B. Ms. Strong, you have a report you want to present? If you’ll just state your name and who you’re with for the record, you may begin. 

Monthly Lottery Report

Sharon Strong Good afternoon, Sharon Strong, Executive Director of the Arkansas Scholarship Lottery. For today’s report, we have our monthly disclosure report that we send every month. This will be focusing on the month of November. So if you look at year over year, November 2024 compared to November of 2025, not a huge difference. A little bit up on draw, a little bit down on instant, basically flat for the most part. 

The biggest difference you’ll see is in the net proceeds towards the bottom, 16.5% up on that. November of 25 actual versus our budget, so what we forecasted, we’re basically spot on. On revenue, we’re just about 0.3% down on that. And then on net proceeds, we’re 18.4% higher than what we’ve forecasted. 

Year-to-date last year versus year-to date this year, no big change on that except for the net proceeds. We are 15% more favorable. It’s about 5 million, 5.9 million higher in net proceeds And then this chart compares where we are year to date versus our budget in terms of what we forecasted that we will generate in revenue and budget in terms of what planned for our expenses. So year to day we are 15 million higher than what we’ve forecasted. And we are 5 million higher in net proceeds. 

And in terms of our general and administrative expenses, we’re about half a million dollars less than what we budgeted. So you can see the green, we’ve made more in revenue, which means we’ve handed out more in prizes. So you’ll see, that’s what the red is, the prize expenses. 

This shows our total amount in our trust account, which is $330,931,000. And that’s for the current fiscal year, which ends June 30th of 2026. Compared to last year, last year, the fiscal year ended with $343,418,000. This is our reserve balance. This table shows what we have collected on child support and taxes. 

We have collected over half a million in income tax, both federal and state, and then $5,331 in child support. In the month of November, we did distribute an additional 10 million to the Arkansas Division of Higher Education, and that brings the total for the fall semester to 58 million. 

This chart shows the retail sales by county. I won’t read them all out to you, but Pulaski County remains the highest generating county at $9,441,000. And then there were no new instant games that we launched in the month of November. We did launch two fast play games, a $1 Holiday Cash and a $1 Candy Cane Cash. And I’ll take any questions. 

Representative Justin Gonzales All right, any questions from committee members? Yeah, Representative Lundstrum, let me figure out how to get this. You are recognized. 

Representative Robin Lundstrum Can you go back to the child support and let us know how that works? 

Sharon Strong So if there is somebody who wins $500 or more on a lottery ticket, they must come to our claim center to collect that prize. And when they do that, we run their name and information through DHS and through DFA to determine if they owe child support or taxes. And if they do, that money gets taken out before they collect their prize.

Representative Robin Lundstrum  Okay, that’s great. And how much did you say was? 

Sharon Strong So back taxes and child support was $5,331. DFA is zero because the tax deadline has been extended. So we anticipate seeing a higher number on that once the people that have gotten extensions file. And then on federal and state income taxes withheld, that number for November is $565,849. 

Representative Robin Lundstrum Wow. Okay. That’s awesome. The next question I had was on unclaimed lottery money, 85,000. How long do we hold that before it goes back into the pot? 

Sharon Strong To the end of the fiscal year? 

Representative Robin Lundstrum Great. Thank you 

Representative Justin Gonzales Representative Rye, you’re recognized for questions. 

Representative Johnny Rye Yes, sir. Thank you, Mr. Chairman. Ma’am, you may have mentioned this, but on exhibit number C, where it says for the year 2026, $105,700,000. What is that figure? 

Representative Justin Gonzales Representative Rye, we hadn’t got to Exhibit C quite yet. You want to hold that question until that’s presented? 

Representative Johnny Rye Alright, thank you. 

Representative Justin Gonzales Thank you. Seeing no other questions, we will consider this item reviewed if you have nothing further. So now we’ll move on to item C. 

Annual Lottery Report

Sharon Strong So the lottery statute requires an annual report that I make that, or that the executive director makes to the committee. And it’s 23 -115-302b9. And that requires the total amount of net proceeds for the prior fiscal year and then it also requires that we project the net proceeds for the following fiscal year. 

So for the fiscal year that ended June 30 of 2025, the amount of net proceeds was $111,817,897. And then what we project for this current fiscal year, which will end June 30 of 2026 is $105,700,000. 

Representative Justin Gonzales Representative Rye.

Representative Johnny Rye Okay, thank you, Mr. Chairman. Ma’am, that $105,700,000, that is for ending July 1 of this year?

Sharon Strong June 30th. Yes, sir. 

Representative Johnny Rye June 30th. What was that for last year? Do you know? 

Sharon Strong So it’s that number right above on this page, 111. $1,817,000. So we’re projecting a little bit lower, yes, just because of industry trends and a little bit of a downgrade in sales just nationwide and what we’re seeing. But hopefully we’ll be able to– what’s that saying over promise? Yes, hopefully we’ll be able to over deliver on that. 

Representative Johnny Rye Thank you. Thank you, Mr. Chairman. 

Representative Justin Gonzales All right, seeing no further questions on this, we’ll accept this as a received report. Moving on to item D. Mr. Fuller, do you want to come up with for this. So just introduce yourself for the record, y’all can. 

Academic Challenge Report

Nick Fuller Good afternoon, Nick Fuller. I’m the Assistant Commissioner for the Division of Higher Education. Exhibit D on your agenda is the follow-up report to the demographic information for students that received the Academic Challenge Scholarship for fiscal 25. I provided this to you, I believe it was in early October. 

But at that time we still had– anyone that was on probation for the past year had until October 1 to submit documentation to get back in the good graces, I guess, receive their scholarship, continue. So this is the update on where the students landed on submitting those requests and then the breakdown of all of the students. 

So you’ll see we awarded 27,170 students in fiscal 25 for a total of $99 million of expenses for Academic Challenge scholarships. And there were a total of 3,271 students that were dropped either for not making the necessary hours to continue eligibility or not the 2.5 GPA. Do we have any questions on these demographic breakdowns? 

Representative Justin Gonzales All right, do we have any questions? Seeing none, thank you for that presentation. Moving on to item E. You’re recognized. 

Nick Fuller Item E is a recommendation from ADHD for review of the Academic Challenge Scholarship Program. And we just recommend that we continue to review eligibility levels, thresholds, and award amounts for the program for the different awards. 

We did just make a change to some of these with the Access Act this past year that you all passed. But we do recommend that just continue to monitor those, as well as, with the fund balance of the net proceeds account to ensure we are providing adequate funding to the students through this program. 

Representative Justin Gonzales Representative Lundstrum, you’re recognized. 

Representative Robin Lundstrum Thank you. Could you go back and tell me when someone drops, what is the process for them to become eligible again? And how do those funds get paid back? What’s the process? 

Nick Fuller If they’re awarded for a semester in the fall, they enrolled and started classes, and then we award the money to the institution for that semester, if they drop during that semester, they do not have to pay back those funds. But if they drop, they’re not awarded for the next semester. 

If they are not enrolled in any hours at the fall term, they come back with zero hours, they are dropped from the program completely. And if you’ve received the traditional Academic Challenge scholarship and you drop from the program for hours or GPA or anything, you’re eligible to reapply for the non-traditional version of the scholarship one time. And then if you drop from that, then you lose the eligibility to apply for the program again. 

Representative Robin Lundstrum Okay, thank you. 

Representative Justin Gonzales Representative Ladyman, you’re recognized. 

Representative Jack Ladyman Thank you, Mr. Chairman. I’m over here. I’m going back to D. I apologize for going backwards, but it shows the total expenditures for 26 of 108 million, and we were just told the total projected income was 105 million. So are we going to lose $3 million? 

Nick Fuller I believe the balance in the net proceeds account prior to the current year revenues of the 105, there’s a little over $300 million. 

Representative Jack Ladyman So we draw on reserves? 

Nick Fuller Yes, sir. 

Representative Justin Gonzales Okay, seeing no further questions, thank you for that presentation. Next on the agenda is item F. It’s our annual report. We will need a motion to adopt this report. I’ll give you a minute to look it over and I’ll entertain a motion. 

All right, have a motion to adopt. We’ll need a second. Got a second. All in favor say aye. All opposed. Report’s been adopted. So, if y’all don’t have any other business, unless y’all want to sit here and talk for another hour or two, we are done and we’re adjourned.