ALC - Lottery Oversight Subcommittee
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- October 5, 2026
Gordon Watkins
Unverified
2:30
All right, we're a little bit past time to get started. So I think everybody's here and ready. So cheers, he's a quorum. We will start this meeting.
Call this meeting to order. Do you have any comments you want to make, Ricky? I'm good. All right. We should have a pretty quick meeting then. So item B on the agenda, review of miles partnership. Ms. Strong? You're going to present that? Thank you.
Speaker 5
3:30
Good afternoon, I'm Sharon Strong, Executive Director of the
Speaker 8
3:46
Arkansas Scholarship Lottery. As you all know, any contracts that we sign that are $25,000 or more require this body's review and so that is why the Miles Partnership contract is on the agenda today. is a contract for website hosting. I'll remind you a couple of months ago when we met, the ad
agency contract was on the agenda. We went out to RFP and we have a new ad agency. In the previous contract with the old ad agency, the website hosting was a part of that contract. So when we got the new contract with the new ad agency, we had to also find a vendor to do the website hosting. If you're familiar at all with our website, it's fairly complicated on the back end. It, in real time, translates the jackpot numbers for all the different games.
And then it also has feeds for the winners. And it has that on there that is constantly circulating for each of the winners in all the different counties. So there's a lot of numbers and stuff that goes into it. So the new ad agency contract does not include the website hosting. So we did a competitive bid process for that. We did not go to RFP because it was not over $75,000, but what we did was a procurement.
It's called competitive bid when it's under $75,000. And there were three companies that bid on that, and the Miles Partnership was the lowest. and so they're the ones that we'll be going with for this contract and it'll be for a period of one year if
Speaker 5
5:25
there's any questions I'm happy to answer those we have any
Speaker 10
5:31
questions all right sir Hill you're recognized how many up here how
Speaker 11
5:36
many to be a competitive bid how many be as much you receive I don't think
Speaker 12
5:44
there's a minimum I'm not an expert on procurement law but I'm not sure so we we put
Speaker 8
5:49
it out we we put it out to um companies that we knew might be interested and then we received three back okay thank you
Speaker 14
5:56
i was just just curious from our own knowledge
Gordon Watkins
Unverified
6:01
so this was part the website hosting was part of the original contract but then when you when that contract went out to bid you took it out and separated that out of it this time that's
Speaker 8
6:11
right so we felt like the hosting was a little high and so we wanted to put that out to
bid to see if we could get a more favorable rate. And what we were paying under the old contract was $90,000 annually. And so now we're going to be paying the $61,000. And actually, if you look more granular at the terms of the contract, there is potential that it will be even less than the $61,000. There's some variables in terms of, you know, if this happens, then this will be the charge but 61 is the highest that it could be
Gordon Watkins
Unverified
6:44
okay so it wasn't broken out and or i guess it was broken out itemized in the old contract of what that portion of it was it wasn't like you
just had here's here's your whole contract amount and you're going to do this
Speaker 8
6:59
work in the old contract yeah um i don't remember the exact terms of the language of it i just know that it cost us 90 000 for this particular website hosting need of ours and now we're going to be able to do that for 29
Gordon Watkins
Unverified
7:15
000 less okay so this it was talking about there was quite a bit of savings if i remember right and in the other contract as well but this cuts into that savings
Speaker 8
7:26
it's actually just further savings so the old the old marketing contracts compared to the new the old agency compared to the new is a million dollars less and
Gordon Watkins
Unverified
7:38
then this it's a million dollars less with this with the 90 cut out sure and then
Gordon Watkins
Unverified
7:48
right anybody else have any questions seeing no further questions without objection we'll consider this reviewed item c director report you're up
Speaker 7
8:02
again all righty so this will cover the month of july
Speaker 24
8:08
that we just ended and submitted our monthly disclosure report for so
Speaker 7
8:24
this slide compares um month over month july 26 versus july 25 in july
Speaker 8
8:30
26 our instant games were down considerably but our draw games were up considerably and so we ended the month
actually in pretty good shape, just with a total revenue of a negative 3.7%. When you look down at the operating expenses, you'll see a 10.5% percentage variance favorable on the gaming contracts, and then 64.8% on the marketing and advertising. that's probably because of the new contract where we've switched over so
we're starting to see some savings on that and then ending up 14.8 percent higher on net proceeds year over year and then when you compare July 26 to what we budgeted or what we forecasted we ended the month 7.4 percent higher on the net proceeds and just as a recap of fiscal 26 because we didn't meet last month so we ended
our fiscal 26 year at 114.3 million for net proceeds and that was the second highest that we've transferred to the trust fund for scholarships in the history of the lottery The highest was in 2024, and that was $129 million. This
Speaker 8
10:11
the Division of Higher Education in fiscal 26 versus fiscal 27.
So we've only had one month in fiscal 27, but we have already transferred to them $67 million. They made that request a few weeks ago, and we have made that transfer over to them. And just for some context, that's the largest amount that we've ever transferred to ADHE. We do it by semester, so if you multiply that by two to get an idea of what we will transfer to them at the end of the year, that would be 134 million and that's more than we typically transfer to net proceeds you know
i just um in 2024 129 million was the highest we had ever transferred so um we may be seeing a bit of a dip into our trust account at the end of the year we've obviously got plenty there there's currently 295 million and so we may be seeing a dip there at the end of the year as you forecast that out and this is our reserve balance by at the end of July 31 2026 we had 1.1 million in reserves
the debt set off we um withheld three thousand five hundred and forty five dollars in taxes so that's when someone comes in to claim a ticket if they owe taxes or child support we withhold that and they don't leave as happy as they might have and then this slide also shows the total since inception, the total amount since inception, withheld for federal and state taxes.
This is a repetition of what I've already said. This is the $67 million that we transferred to ADHE last month. This shows retail sales by county. So the highest sales is still Pulaski at $9.5 million, and then the second and third highest counties are Benton County and Washington County.
We launched no new games in July, and so that may have had something to do with our dip in instant sales. and then wanted to talk a little bit about the contracts so contracts under 25,000 don't have to be reviewed by this body but we like to just list them in our report so these are the contracts that are under 25,000 these are partnerships with universities around the state and then the bank ozk contract is also on here
We, Bank OCK is our banking partner, and they have been since the inception of the lottery. Our contract with them ended. It is a no-cost contract. They don't charge us any fees or any kind of, any service fees for our, as part of the contract. But the interest rate that we were getting with them was lower than we liked, and so we were able to renegotiate that with them to get a more favorable interest rate. and so starting um in september we will be able to see uh some benefit from that and so we'll be
able to generate a little more money with interest and so hopefully that kind of offsets the the that dip that we may see in the trust account and
Senator Ricky Hill
Unverified
14:09
senator hill you said you had a question you're recognized you said 24 was a record year for y'all what what what was being done different in 24 versus 26
Speaker 5
14:18
or even 25 24 there were five jackpots that were over
one billion dollars and so the sales were higher and since then we haven't
Speaker 15
14:33
had that many any other questions without objection we'll consider this reviewed i think
Gordon Watkins
Unverified
14:38
that is that is it for you mr. strong thank you next on the agenda update from Arkansas division of higher ed you want to make your way to the table to introduce yourself for the record may begin Nick Fuller I'm the assistant commissioner
Nick Fuller
Unverified
14:58
for the division of higher education and I apologize if the format if you printed these out and they look sideways I'm not sure what happened while they're not letter angled on these letters we sent to you but the first item I want to show you is the report that we do yearly on the student characteristics of the students that received the academic challenge scholarship in 2026 the first chart is the total of all students that were awarded in 26 there were 29,055 students total for an award amount of 110 million dollars
I will point out in this chart there is a section that's new for 26 that we haven't reported in prior years that's the next to last one that shows students that receive the challenge plus award these are students that got awards higher than the the regular allocated the thousand dollars freshman four thousand sophomore junior and five thousand for seniors for the challenge plus anyone with a lower income is eligible to receive up to the full five thousand per year award amount that a senior would get that's the plus portion so you'll see there were of the 29,000 students 11,000
of them received those additional awards at a cost of 18 million dollars for 26 and then the second chart in that same letter on exhibit d1 is first time students for last year these would be freshmen or first time awardees for the scholarship see there are 12,708 of those students awarded at 40 million dollars and of those 12,000 5,816 of those receive that additional funding through the challenge plus scholarship welcome
any questions you might have on that report we have any questions I see none All right lucked out right, the next one is e1 this is going to be What is this one report of expenditures deposits and balances of the grants fund and the net proceeds trust account I Will mention on the report where it mentions a lottery net proceeds trust. This is a reflection of just the academic challenge portion
We do have the two other funds for workforce challenge and the access to acceleration scholarship which was previously the concurrent challenge
those were fully funded through lottery revenues and there's not a breakdown of those two funds those will be included in the in the next report when we create one but this this net proceeds account does reflect what was deposited in for the academic challenge and what was outgoing for those leaving a balance of 4.4 million dollars at the end of the
year and then the the next chart in that letter is the the
expenditures of 26 for all of our scholarships paid from the higher education grants fund and then the budget for each of those scholarships and see we have a total allocation of 70 and we spent 74 million
74.9 million dollars in fiscal 26 we are budgeting 70.9 for fiscal 27 in all of those scholarships we finished 2026 with a year-end balance of 5.3 million dollars
Chair
Unverified
18:30
in the grants fund. I know there are any
Representative Denise Garner
Unverified
18:47
questions on this report for E1. Representative Garner, you're recognized. Thank you Mr. Chair. I've got just a quick question. What is
it that makes you think that the budget needs to be less next
Nick Fuller
Unverified
18:58
year than this year? Is there something that's changing? The biggest thing is the arkansas future grant in 2026 we spent almost uh what would that be seven million
dollars more than the anticipated budget and that was with a bunch of varying factors that happened with the private schools coming in to be awarded from that and levels of what those were paid it was just a larger than expected cost for that year and we've adjusted some things so we don't expect it to be that much this year so this is a real big hit in one year for that program appreciate
Gordon Watkins
Unverified
19:33
that thank you yes ma'am any other questions seeing none you may move on
Nick Fuller
Unverified
19:37
all right the next item is going to be the request for reimbursement for the administration of the program the scholarship programs from ADHE we request reimbursement from the lottery for those expenses this year the request you see will total 667,346 dollars say that is the least amount we
have requested in the past five years is we've had some turnover in positions and we've moved some positions to different funding sources but that is the like I
said it's gradually went down over the five years and kind of take some of the cost of the managing of the scholarship application portal we kind of split that So not to put all of the burden on the lottery, but hopefully we'll continue to bring that down
Gordon Watkins
Unverified
20:30
as we can Any questions on that Seeing none, I think you're done. I believe that's it
They have any other business y'all want to stay here a little bit longer seeing none we are adjourned You
Agenda
A. Call to Order
B. Review of Miles Partnership LLC Contract [Exhibit B]
C. Arkansas Lottery Director Report [Exhibit C]
D. Update of Arkansas Division of Higher Education (ADHE) Academic Challenge and Workforce Challenge Scholarship Award Data & Student Status Report (A.C.A § 6-85-219(c)) [Exhibits D1-D2]
E. Reports from the Arkansas Division of Higher Education (ADHE) [Exhibits E1-E2]
F. Other Business
G. Adjournment
Documents
No documents posted.
Speakers
Gordon Watkins
Unverified
Speaker 5
Speaker 8
Speaker 10
Speaker 11
Speaker 12
Speaker 14
Speaker 21
Speaker 7
Speaker 24
Speaker 15
Senator Ricky Hill
Unverified
Nick Fuller
Unverified
Chair
Unverified
Representative Denise Garner
Unverified