Our View

Our View

Lottery continues to be shady venture for state

There seems to be a lot of hubbub lately over the spending and performance of the Arkansas Scholarship Lottery, which is just the latest flap since its inception that dates back to 2008.

Unlike those critics who oppose the lottery on the basis of religious objections or the ridiculous argument that the poor people are victimized and aren’t “smart” enough in managing their limited income, our argument is solely based on lottery management, or better yet, mismanagement and unnecessary political interference.

Regardless of our reasons for finding fault with this lottery, the fact of the matter is that this was established at the will of the majority of Arkansas voters when 648,122 of them outnumbered the 383,467 who voted against this form of raising money for college scholarships.

This lottery has always been embroiled in controversy since its inception when its original director, Ernie Passailaigue, resigned in a firestorm over his $324,000 salary and a favorable contract for one vendor, Scientific Games Corp.

Our criticism began when the then-citizen lottery commission decided to replace Passailaigue with the then-lottery attorney Bishop Woosley as director. Our point then was Woosley was virtually inexperienced in running a relatively new multi-million dollar lottery business and the lottery’s performance proved us correct.

Money for scholarships, once projected to top $100 million a year, never did so. The closest to that projection came in 2012 when $97.5 was earmarked for scholarships. It hasn’t topped $86 million since.

There is considerable and justified criticism with the fact the lottery management provides an enormous amount of money for its beneficiaries. Onlookers and critics sight too much money going to prize winners, marketers, vendors and lottery employees rather than to college scholarship recipients.

Critics cite the fact that since its first year, the Arkansas lottery’s outlay for scholarships has never exceeded 21 percent, whereas the percentage for prizes has never slipped below 66 percent, and last year it was 67.7 percent.

The thorn in the side to many vocal critics of the lottery is that the scholarship check is the last check the lottery writes, and that is after the ad contracts get paid, scores of people who work for the lottery get paid, the people who sell the tickets get paid, the services that print the tickets and manage the games get paid and after all the prizes get paid.

Now, we don’t have a “dog in the hunt” on the issue that many do-gooders have that the lottery shifts wealth from the pockets of poor people but rather many of the failed management decisions that have been made by state bureaucrats and politicians.

For example, one such contract is the Camelot consulting arrangement. The lottery has paid Camelot $3.07 million since the beginning of the contract.

Marketing and advertising expenditures varied from $4.3 million to $5 million a year, but Camelot’s fiveyear plan calls for about $6 million in fiscal 2018, $6.5 million in 2019, $7 million for 2020 and $7.5 million in 2021 and 2022.

And, the Department of Finance and Administration, which now oversees the daily operation of the lottery, recently agreed to award a five-year marketing and public relations contract to another private marketing firm for a total $34.5 million. That costly decision naturally led to protests from two rivals.

Sadly, we’re afraid that under the current course of action and leadership we see this to be a controversial topic in the future without any real solutions that makes for a very dismal situation.