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Arkansas Gov. candidate's lottery figures appear unrealistic

Jan 24, 2006, 8:06 am

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Arkansas gubernatorial candidate Bill Halter's claim that a state lottery would generate as much as $250 million for education far exceeds previous state estimates that his campaign said Monday were out of date.

In announcing his candidacy last week, Halter proposed a state lottery to ease the financial burden of overhauling the state's education system. He said the $250 million figure was at the high end of estimates.

Halter spokesman Bud Jackson said Monday that the campaign would provide more specific information when details are available.

"Most of the information coming out now is either old or are studies done by right-wing think tanks that oppose lotteries. They don't take into account recent experience in Georgia or South Carolina," Jackson said.

However, Halter's initial estimate is much higher than lottery proceeds from other states and previous state estimates.

The state Department of Finance and Administration has not conducted a full study on what a state lottery could generate, director Richard Weiss said Monday. The department's preliminary estimate is that a lottery would generate about $60 million a year, based on lottery proceeds in states comparable in size to Arkansas that have lotteries, he said.

Also, the department estimates it would take a year or two of operations before lottery benefits would reach $60 million annually, Weiss said.

Georgia, for instance, allocates 38 percent of its lottery ticket sales to education, with the rest going to prizes awarded and to administration.

Arkansas would have to sell $625 million in lottery tickets, with 40 percent of the proceeds going to education, to net $250 million for schools. That would amount to $227 worth of lottery sales per capital, according to Arkansas population figures from the U.S. Census Bureau.

The average among the 41 states and the District of Columbia that have lotteries was $183.70 per capita in 2004, according to the North American Association of State and Provincial Lotteries. The association gives figures on lottery ticket sales per capita in U.S. states on its Web site, http://www.naspl.org.

Rhode Islanders and visitors to that state spend the most on lotteries - $1,370.95 per capita, according to the association's figures. However, less than 19 percent of the revenue goes to the state, according to Rhode Island state figures. More goes out in prizes.

Arkansas would have to sell $454 worth of lottery tickets per capita to raise $250 million if the state kept 20 percent of the proceeds.

The association's figures for four states that border Arkansas that have lotteries show that the highest per capita sales are in Missouri, with $138.86. The lowest is Tennessee, with $73.24 in a lottery that is two years old.

Louisiana's figure is $75.58 per capita and Texas' is $131.32.

Missouri had its best year ever for lottery ticket sales in 2004, according to that state's lottery figures. Lottery revenues there declined in 2005.

Still, if Arkansas sold $138.86 worth of lottery tickets per capita and kept an average of 27 percent of the sales for education, as Missouri does, the state would see more than $100 million for school spending.

Figures from other states vary widely.

Texas pays out 60 percent of gross revenues from its state lottery in prizes and 10 percent for administration and commissions to retailers that sell tickets. Out of the 30 percent left, 28 percent goes to education while the remaining 2 percent - unclaimed prizes - goes into a fund that is eventually goes for health care in the state.

South Carolina brought in $228.92 per capita in lottery sales, according to association figures. Georgia received $312.26 per capita.

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