Leader Blues

Friday, February 26, 2010

TOP STORY >> Lottery chief says program huge success

By JOHN HOFHEIMER
Leader senior staff writer

Even as the General Assembly prepared to double the amount of college Arkansas lottery scholarships this week, lottery director Ernie Passailaigue told Jacksonville Rotarians Monday that the fledgling lottery raised $28 million for scholarships in its first four months of operation.

Gov. Mike Beebe signed the bill into law Friday morning, meaning eligible students at accredited four-year Arkansas colleges or universities now qualify for $5,000 a year and those attending two-year colleges or accredited trade schools qualify for

$2,500, according to the bill the General Assembly passed Thursday, part of a $4.5 billion budget.

Both houses passed identical versions of the bill, the Senate unanimously, the House 98-2. The money is expected to help 30,000 Arkansans go to college next year.

“We’re in the business of producing scholarship money,” he said.

Passailaigue said that among the 44 U.S. lotteries, this was the quickest launch and one of the most successful startups in history.

He was hired June 29 and the first ticket was sold on Sept. 1.

He said the lottery could generate more money, but that like the people of South Carolina, where he was a lawmaker and launched the state lottery, Arkansans are conservative and principled and the state is running a low-key promotion.

When Georgia launched its lottery, it showed a flatbed truck driving through a peach orchard with dollar bills blowing off the back, and the words “Georgia’s new cash crop,” he said.

“We’re trying to thread the needle,” he said, “trying to respect the culture. A lottery has its down side and we hope the net benefit to society outweighs the negatives.”

Passailaigue said people needed to look at the lottery as entertainment, not as a source of personal income.

He said the Arkansas lottery was intentionally set up as a cash- only venture so people couldn’t easily squander money from a credit card chasing a payoff.

“You will be a net loser,” he said. “That’s how gambling works. Only play with discretionary money. Otherwise, we don’t want your money.”

He said that the state Health Department has a budget of $200,000 to help those with gambling addictions, whether in the form of a lottery, horse racing, sports betting or other forms.

“At the end of the day, adults have the freedom of choice to spend money on a lawful activity,” he said. “Most are reasonable.”

He said the gambling industry generates about $50 billion a year in revenues.

Predicated on studies in South Carolina, “About 60 percent of people will play the lottery, or at least try it,” he said. “Most of them are middle income or above.”

Most played less than weekly, $1 to $5 at a time, with 60 percent of the purchases for the scratch-off tickets, most of which payoff at the site of purchase immediately.

He said the large jackpots on the Power Ball and Mega Millions get a surge in purchases.

“We want a lot of people to play a little bit,” he said.

The lottery has paid off its $2.8 million start-up loan from the state and is now debt free, he said.

As for the concern that lottery kills retail revenues, he said that 99 percent of the money stays in state, with 24 percent going to education and about 50 percent being paid back out.

He said Oklahoma complains that it is losing $10 million to $12 million a year because Arkansas now has its own lottery. And nearly all states that touch Arkansas have lotteries. All that is money now staying home, he said.