State lottery reports third-best year for scholarship fundraising with $111.3M – Northwest Arkansas Democrat-Gazette
The Arkansas Scholarship Lottery raised $111.3 million for college scholarships in fiscal 2025 that ended June 30, the lottery reported Thursday.
That’s the third-largest amount that the lottery raised for college scholarships in a fiscal year since it started selling tickets on Sept. 28, 2009.
“I think it is great,” lottery Director Sharon Strong said Thursday about the amount that the lottery raised for college scholarships in fiscal 2025.
“We had one $1 billion jackpot (in fiscal 2025) and we still were able to perform at $111 million,” she said.
In fiscal 2025, the lottery’s revenue reached $578.7 million, compared to $613.6 million in fiscal 2024.
The lottery’s revenue in fiscal 2025 is the fifth-largest amount that the lottery has collected in a fiscal year.
The lottery’s revenue and amount raised for college scholarships in fiscal 2025 both exceeded the lottery’s projections of collecting $570.5 million in total revenue and of raising $106.7 million for college scholarships.
The lottery’s scratch-off ticket revenue declined slightly from $478.4 million in fiscal 2024 to $469.5 million in fiscal 2025, and the lottery’s draw-game ticket revenue dropped from $134.5 million in fiscal 2024 to $108.5 million in fiscal 2025, according to the lottery’s reports.
The lottery reaped the benefit of five $1 billion-plus jackpots in fiscal 2024, compared to one $1 billion-plus jackpot in fiscal 2025, said Mike Smith, the lottery’s gaming director.
“To get $108 million (in draw-game revenue in fiscal 2025) out of just one $1 billion jackpot, that was very good,” he said Thursday.
The lottery’s profit margin on ticket sales for draw games that include Mega Millions and Powerball is larger than the lottery’s profit margin on scratch-off ticket sales.
The lottery’s other draw games include Fast Play, Natural State Jackpot, Arkansas LOTTO, Lucky for Life, Cash 3 and Cash 4.
Fiscal 2025 is the fourth fiscal year the lottery has eclipsed raising $100 million for college scholarships since the lottery started selling tickets nearly 16 years ago.
The lottery has helped finance Arkansas Academic Challenge Scholarships for more than 30,000 students in a fiscal year during 11 of the past 15 fiscal years.
The lottery’s leading proponent in 2008, then-Democratic Lt. Gov. Bill Halter, had projected it would raise about $100 million a year for college scholarships. At that time, the state Department of Finance and Administration had estimated about $55 million for college scholarships. Arkansas Advocates for Children and Families, a lottery opponent, forecast about $61.5 million.
In fiscal 2024, the lottery raised $129.1 million for college scholarships — the largest amount that it has raised for college scholarships in a fiscal year.
The state’s fiscal years end on June 30.
A year ago, Strong said fiscal 2024 was a record fiscal year for draw-game revenue, a very good fiscal year for scratch-off revenue, and the lottery’s interest income was up by nearly $9 million.
The lottery’s largest amount of total revenue collected in any fiscal year is $632.5 million, which was collected in fiscal 2021.
In fiscal 2021, lottery officials attributed the lottery’s performance in part to factors brought on by the covid-19 pandemic, such as people spending more time at home.
In June, the lottery’s total revenue declined slightly from $45.3 a year ago to $44.6 million, according to the lottery.
The lottery’s scratch-off ticket revenue increased from $36.2 million in June 2024 to $36.9 million last month while the draw-game ticket revenue dropped from $8.9 million in June 2024 to $7.7 million last month, the lottery reported.
The amount transferred to college scholarships increased from $19.8 million in June 2024 to $20.1 million last month, according to the lottery.
At the end of each fiscal year, the unclaimed prize reserve fund balance minus $1 million transfers to college scholarships. After receiving $230,032 in unclaimed prizes in June, the lottery’s unclaimed prize reserve balance totaled $1 million on June 30 after sending $11.2 million to college scholarships.
For fiscal 2026 that started July 1 and ends June 30, 2026, the lottery is projecting total revenue of $563.7 million and raising $105.7 million for college scholarships, according to its records.
SCHOLARSHIPS
Kim Mundell, a spokeswoman for the state Department of Education, said this week that preliminary final numbers for fiscal 2025 show that 27,132 students were awarded Arkansas Academic Challenge Scholarships and a total of $98.7 million was disbursed to them.
Of this amount, 10,300 students were awarded Challenge Plus Scholarships totaling $19.6 million, she said.
In fiscal 2024, the Division of Higher Education handed out Arkansas Academic Challenge Scholarships totaling $75.8 million to 26,117 students, according to the department. Fiscal 2025 is the fourth consecutive fiscal year in the past 15 fiscal years that Arkansas Academic Challenge Scholarships were awarded to fewer than 30,000 students in a fiscal year.
The amount handed out for the Academic Challenge Scholarships peaked at $132.9 million in fiscal 2013, with awards going to 33,353 students. Scholarship totals have dropped largely because the Legislature cut the amount of initial scholarships a number of times since then. The Arkansas Academic Challenge scholarships are financed with lottery proceeds, plus $20 million a year in state general revenue.
Act 386 of 2023 created the Arkansas Challenge Plus Scholarship program to provide additional funds for students based on their financial need. Under Act 386 of 2023, the sum of an Arkansas Challenge Plus Scholarship and Arkansas Academic Challenge Scholarship won’t exceed $5,000 for each eligible student in an academic year.
Under Act 1105 of 2015, the scholarship size for Arkansas Academic Challenge Scholarship recipients is $1,000 for the freshman year at two- and four-year colleges, $3,000 for the sophomore year at a two-year college, $4,000 for the sophomore and junior years at four-year colleges and $5,000 for the senior year at four-year colleges.
In 2017, the Legislature created the Workforce Challenge Scholarship to use excess proceeds to provide up to $800 per year for students enrolled in programs that lead to qualifications in high-demand occupations.
Mundell said the preliminary final numbers for fiscal 2025 show that 2,149 students were awarded Workforce Challenge Scholarships and a total of $2.7 million was disbursed to them.
In 2019, the Legislature created the Concurrent Challenge program that allows high school juniors and seniors to receive the scholarships for a semester or an academic year in which they are enrolled in an endorsed concurrent course or certain programs.
The preliminary final numbers for fiscal 2025 show that 5,926 students were awarded Concurrent Challenge Scholarships and a total of $4.3 million was disbursed to them, Mundell said.
During the regular session that adjourned May 5, the Legislature enacted identical Arkansas ACCESS Act bills to implement the governor’s higher education overhaul. The measures are Act 340 (Senate Bill 246 by Sen. Jonathan Dismang, R-Searcy) and Act 341 (House Bill 1512 by Rep. Matthew Shepherd, R-El Dorado).
The ACCESS acronym stands for acceleration, common sense, cost, eligibility, scholarships and standardization, which are the main priorities of the law.
According to the state Department of Education, the cost impact of the Arkansas ACCESS Act will be about $22.6 million a year on the Arkansas Scholarship Lottery’s net proceeds, and it will have no impact on state general revenue.
Increasing the freshman award for the Arkansas Academic Challenge Scholarship from $1,000 to $2,000 per year is estimated to cost about $8.72 million a year, and the addition of eligibility for the Governor’s Scholar program to high school students who graduate from high school with an associate degree or with a diploma of distinction is estimated to cost an additional $5 million more a year, according to the department.
Changes to the award level and eligibility criteria for the Workforce Challenge Scholarship are projected to cost about $9 million a year in net proceeds, the department said, and the repeal of the Concurrent Challenge Scholarship program is projected to save $3.8 million a year.
The inclusion of a new lottery-funded scholarship — called the ACCESS to Acceleration Scholarship program — will cost about $15.5 million per year, while also creating a savings within the Academic Challenge Scholarship program of about $11.7 million a year, the department said in its revenue impact statement.
The increase in the freshman award for the Arkansas Academic Challenge Scholarship program and the replacement of the Concurrent Challenge Scholarship Program by the ACCESS to Acceleration Scholarship program will become effective during the 2025-26 school year.
Mundell said that July 1 was the application deadline for many of the state scholarships, and the Division of Higher Education has seen an increase in Academic Challenge Scholarship applications.
“The snapshot from last year indicated that there were roughly 74,900 applications (including returning students), and earlier this week, there were 76,860,” she said this week in a written statement. “Since the scholarship application system is cyclical, students move in and out of statuses quickly.”
The Lottery Scholarship Trust Account totaled $340.8 million as of June 30, the lottery reported.
Support journalism that covers the topics that matter most to you. Donate today to preserve the quality and integrity of local journalism.
Mike Wickline covers state politics, and he has covered the state Legislature for the Arkansas Democrat-Gazette since November 2000. He previously spent several years covering the Idaho Legislature for the Lewiston Morning Tribune.
Copyright © 2025, Northwest Arkansas Newspapers LLC. (NWA Media)
All rights reserved.
This document may not be reprinted without the express written permission of Northwest Arkansas Newspapers LLC
Material from the Associated Press is Copyright © 2025, Associated Press and may not be published, broadcast, rewritten, or redistributed. Associated Press text, photo, graphic, audio and/or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. Neither these AP materials nor any portion thereof may be stored in a computer except for personal and noncommercial use. The AP will not be held liable for any delays, inaccuracies, errors or omissions therefrom or in the transmission or delivery of all or any part thereof or for any damages arising from any of the foregoing. All rights reserved.
