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Lottery Structure in Arkansas

Lottery Structure in Arkansas



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
      • 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?
      • 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?
      • 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