Change in lottery bill slipped past director; commission trims $11M from scholarship budget

Ark. lottery budget revised after law change found

LITTLE ROCK, Ark. — Arkansas’ lottery director said Wednesday he wasn’t aware that the Legislature changed how money from unclaimed prizes is to be managed — a move that required lottery officials to revise their 2011 budget.

The revised lottery budget allocates $11 million less for scholarships and overall revenue is projected to drop by $14 million. However, the lottery has been taking in money above projections, and the original scholarship budget target of $116 million could still be met.

“We will do our best to achieve our original goals,” lottery director Ernie Passailaigue said.

The lottery’s aim is to fund 28,000 scholarships at $5,000 per university student and $2,500 per community college student.

He said he considered the legislation, which was meant to move more money into scholarships, a matter of good intentions having an unintended consequence.

About $8.8 million from unclaimed prizes now will go straight into the scholarship fund. That sum would have helped pay for advertising and special promotions, Passailaigue said.

Those promotions churn up more sales as winners keep buying tickets, effectively giving the winnings back to the lottery, which on average keeps 35 cents of every dollar that players gamble.

No one on the commission criticized Passailaigue, who said after the meeting that it was his responsibility to know about the legislation. He said a commission member pointed out the change a few weeks ago.

“Nobody asked me about it,” Passailaigue said. “We read it after it was passed.”

Passailaigue said he stays away from legislators because he doesn’t believe he should be involved in “political decisions.”

He also said the Legislature could revert the law to the original version when it goes into session in January.

Lottery Commission chairman Ray Thornton asked whether the lottery rules were written strictly enough to prevent unclaimed prize money from being forfeited to the state.

Commission attorney Bishop Woolsey said money from unclaimed prizes doesn’t change hands. A winner has 180 days to claim a prize from numbers games, and 180 days from the end of a scratch ticket game. After a prize expires, no one can claim it, he said.

The lottery began Sept. 28 and only now will start seeing money from unclaimed prizes from numbers games.