LITTLE ROCK, Ark. (AP) — New Arkansas lottery director Bishop Woosley says an increase in profits he's seeking won't come at the expense of prizes paid to scratch ticket players.
The lottery is projected to raise about $89 million for college scholarships in the fiscal year that ends June 30. Last year the lottery generated $94 million for scholarships, after being projected to bring in $105 million by former director Ernie Passailaigue, who resigned in October.
Last year the lottery had sales of $464 million and Woosley said in a meeting with reporters on Thursday that he wants to boost that total by at least 1 percent, $4.6 million, this year.
Woosley is also looking at what aspects of the lottery's operation can be cut to save expenses.
The Arkansas Lottery Commission helped a bit by setting the ceiling for the new director's salary at $175,000. Passailaigue earned $324,000 annually, a figure that drew consistent criticism during his tenure.
Passailaigue's two top deputies were paid $225,000 each, people he brought with him from South Carolina where he ran that state's lottery. Woosley said he doesn't plan to fill those deputy positions, though he said he may wind up approaching the commission to ask that he be allowed to hire a chief operating officer if he finds that he needs the help.
The salary savings come to about $600,000 off the bat.
The commission offered a high-end salary at start up in the hope of finding an experienced hand who could bring the lottery on line quickly and without problems. Voters approved a 2008 ballot measure allowing a state lottery with the proceeds going to fund in-state college scholarships. The first tickets were sold in 2009.
Woosley, 38, served as the lottery's in-house attorney until being named to the director post last weekend.
"You don't need an expert," Woosley said, but noted that he and the rest of the staff have had valuable on-the-job training and that many workers came with long experience in financial management at other employers.
"I think we have the experience internally," Woosley said.
Lottery commission Chairman Dianne Lamberth said the promotions Woosley plans can help sales of other draw games, such as Cash 3 and Cash 4.
"Some people don't know how the Cash 3 and Cash 4 games are played -- when they're drawn, how quickly they're drawn, Lamberth said.
Lamberth said she and other commissioners were impressed with Woosley's "vision" and that she is confident the enterprise will grow under his leadership.
Lottery Commission member Ben Pickard, one of Passailaigue's harshest critics, had pushed the former director to elevate the lottery's profit margin, which was 20.2 percent at the end of fiscal 2011. The lottery had the initial goal of a 25 percent profit margin but that was driven down by the intense popularity of scratch games.
Pickard said he supports Woosley's efforts to reduce costs and increase revenues, mainly by trying to build sales of draw games.
"Obviously at this point with Powerball, we're going to have to wait and see.
The lottery has satellite claim centers in Camden, Jonesboro and Springdale, where players can redeem tickets worth more than $500. Woosley said he wants to keep the centers running for now because players on the state's fringes don't want to drive 2.5 hours or more to cash a ticket in Little Rock.
To help cover costs of running those centers, Woosley said they will begin selling tickets sometime in the next few months. The leases on the centers expire in 2014, when they may get another look.
Woosley said lottery ticket retailers shouldn't feel threatened by sales at the state outlets and that there are no plans to open a chain of state lottery stores.
"We're just simply trying to cover the cost of the claim centers," Woosley said.
An important key to improving the lottery's bottom line will come through greater sales of draw games, such as Powerball and Mega Millions.
A Powerball jackpot of more than $300 million drove strong sales in February. The first week this month had ticket sales of $13.8 million, breaking the state weekly sales record by nearly $1 million. Powerball tickets now cost $2, and players can opt to toss in an extra dollar, which doubles the value of any prize other than the big jackpot. The game is rigged so that jackpots start at about $40 million and grow at a faster rate than before the January price hike.
Mega Millions tickets remain at $1 apiece. At least for a time last week, the Mega Millions jackpot was larger than the Powerball top prize, a bargain that can help sales of the lower-priced tickets.
Woosley said he expects draw game sales to remain strong over the next few months, perhaps enough to goose lottery profits to the "magic" $100 million level.
Pickard said he thinks the lottery can generate that much.
"I see it as a possibility," Pickard said. "Sometimes you have to set goals you have to stretch for," Pickard said.
But the draw games remain a small part of overall lottery sales. Arkansas players favor scratch games so much that they generate 84 percent of the state's ticket sales, the highest scratch-to-draw ratio among the 44 states that have lotteries.
Woosley said the lottery is preparing to launch Twitter and Facebook accounts to help promote the games through social media and plans to update its website. The lottery will be able to send blast emails to customers who signed up to receive updates.
A lot of customers see the rack of scratch tickets in convenience stores and just point to the ticket they want, without giving a thought to one of the numbers games, Woosley said.
He wants to use promotions to introduce players to how to play draw games, including the Arkansas 50-50 monthly raffle and the multi-state Decades of Dollars game.
Scratch tickets have a much smaller per-ticket return for the lottery than for the draw games, which carry a 50 percent profit margin. So even incremental increases in draw game sales can improve the lottery's bottom line.
The $13.8 million in sales for the first week in February suggest that a large proportion of the adult population in the state of 3 million people know how to buy a draw ticket.
Woosley said the coming promotional effort should help determine if there are regular players waiting to be found.
"We may just be a scratch (ticket) state," Woosley said, indicating he's comfortable working with the lower margins.
"You do not want to cut prizes," Woosley said, because that's what drives repeat sales.
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