Legislature refuses to consider bill increasing prizes

Oklahoma will be a big loser when Arkansas begins its lottery games, an official said.

The Oklahoma lottery is expected to lose as much as $12 million in sales during the first year Arkansas has its games, said Jim Scroggins, who is the executive director of Oklahoma's lottery.

"We estimate, based on prizes claimed by Arkansas residents, that we will," Scroggins said.

That would result in a loss of $3.5 million to $4 million for education, Scroggins said.

"These losses could be even higher since Arkansas' lottery law does not have the profit restriction that is contained in the Oklahoma law, which has the effect of limiting prize payouts, which in turn limits sales and profits," Scroggins said.

Arkansas Gov. Mike Beebe signed legislation last week to create a lottery. It's expected the game will be up and running by early next year. Arkansas residents, especially those in the western part of the state, have bought lottery tickets in eastern Oklahoma since October 2005, when Oklahoma's lottery games started.

The Arkansas lottery is not expected to have restrictions on proceeds, which are earmarked for college scholarships.

Oklahoma lottery trustees the past two years have sought to get bills passed to increase the percentage of lottery proceeds that go to prizes. They said removing Oklahoma's mandate that 35 percent of sales go to education would increase sales and, as a result, mean more money for education. Scroggins said he expected at least 28 percent of sales would go to education if the restriction were removed.

Lottery directors from Florida and North Carolina told Oklahoma lottery officials last year that sales increased when their state legislators removed similar mandates. In both cases, the sales increase was significant enough to produce more money for education, though the state got fewer cents per dollar.

The lottery never met original projections that it would produce $150 million a year for education. Scroggins said earlier this month that lottery revenue is down about 2 percent compared with a year ago, but it is still targeted to bring in about $191.1 million in sales and meet its projected $69.2 million for education for this fiscal year, which ends June 30.

Lawmakers in the Republican-led Oklahoma Legislature aren't interested in changing the lottery formula. Republicans mostly opposed the lottery, which won about 65 percent approval of voters in 2004.

House Speaker Chris Benge said bills to change the lottery formula won't advance under his watch.

"Everything that we predicted with the lottery four or five years ago is coming true," said Benge, R-Tulsa. "Those of us who were opposed said all along that it would be an unstable revenue source, that there would be a novelty effect in the beginning ... and that eventually it would falter.

"To me, to basically ask Oklahomans to lose more of their hard-earned dollars is just immoral. So I have no interest in hearing the bill."