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Lottery Structure in Arkansas
 

Lottery Structure in Arkansas

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Summary of issues to consider before organizing the new Arkansas Scholarship Lottery.

Summary of issues to consider before organizing the new Arkansas Scholarship Lottery.

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    Lottery Structure in Arkansas Lottery Structure in Arkansas Presentation Transcript

    • Arkansas Scholarship Lottery
    • Two primary components to consider for implementation of the Arkansas Scholarship Lottery Act of 2009
      • Organizational Structure
      • - How the lottery is organized?
      • - How does it function?
      • - How it is governed?
      • Scholarship Programs
      • How are proceeds generated by the lottery distributed in the form of scholarships?
    • Lotteries in the United States Overview
    • OVERVIEW
      • 42 states and the District of Columbia operate lotteries
      • In 2007, lottery sales topped $52 billion in the United States,
      • Lotteries returned more than $31.5 billion in prizes
      • State governments generated a profit of more than $17 billion in 2007
    • Management considerations for establishing a well-run lottery
      • Cost
      • Technology
      • Efficiency of operations
      • Oversight
      • Retailer Satisfaction
      • Return on Investment as it relates to stated purpose (scholarships)
    • How will the lottery operate?
      • TWO OPTIONS
      • 1. Lotteries operates under the direct auspices of a government agency
      • 2. Lotteries operates as a state-owned Lottery Corporation
    • Lotteries Operated by Government Agency
      • organized as government agency or within existing government agency
      • required to follow same civil service rules dictating issues such as salary levels, procurement rules and other restrictions that apply to government agencies
      • these requirements limit the lottery's ability to start-up quickly and hire and retain the quality personnel required for the business-like operation of the lottery
    • Lotteries operated by Public Lottery Corporation
      • Recently lotteries have been organized and operated as a state-owned Lottery Corporation
      • Lottery is organized, owned, and regulated by the government. The public's lottery is created and operated much like a private business
      • Better able to respond to the changing needs of the state’s lottery business
    • Best Practices: What makes a lottery successful?
      • Flexibility to manage prize payouts
      • Cohesive retail strategy with optimal distribution
      • Efficient allocation of advertising dollars
      • Promotions and winner awareness plan
      • Implementing a comprehensive instant ticket program/management system
      • Building and maintaining a positive brand image
      • Concentrating on growing same store sales with existing retailers
    • Where does the money go?
    • Lottery Proceeds
      • 58.7 percent given back to players as prizes
      • 30.7 percent returned to government as profit
      • 6.7 percent paid to lottery retailers (Commission)
      • 3.9 percent for operating expenses (Administration)
    •  
    • What are the Lottery’s operating expenses?
    • FOUR COST CENTERS
      • Retailer Commissions
      • Direct Costs to Lottery
      • Advertising
      • Payments to Vendors
    • Who sells the lottery tickets?
      • Lotteries license local retail businesses to sell their lottery tickets
      • Legislation will determine requirements of licensure for the lottery retailers
      • Nationwide, more than 70% of the lottery retailers are comprised of convenience stores and supermarkets
      • Shopping patterns have changed as more consumers shop at drug stores, dollar stores, and big box retailers
      • As a new lottery, Arkansas has the opportunity to set flexible rules from day one thus attracting these new retail categories
    • Necessary Components of Lottery Enabling Legislation
      • Organizational model of the lottery (agency or corporation)
      • Regulatory and oversight requirements
      • Guidelines for the ongoing management of the lottery
      • Management of prize payout is the decision that most significantly impacts the profitability of a lottery.
    • When can Arkansas begin selling lottery tickets?
      • Typically after a state’s lottery enabling legislation is approved, ticket sales have begun in four to seven months.
      • Arkansas Scholarship Lottery ticket sales could begin in early 2010 .
    • Arkansas Scholarship Lottery