"We were spot on with revenue, the difference has been the prizes," explained lottery director, Ernie Passailaigue.
Passailaigue pointed to nearly $8 million in unexpected prize payouts as the main reason why the lottery fell short.
Passailaigue also said Powerball revenue fell nearly 16 million dollars short, calling it a "bugaboo" in the budget. Online games also underperformed.
"It does concern me because the state planned for it, as Senator [Shane] Broadway said, they planned for that, but hopefully this is not a trend," said commissioner Ben Pickard of the shortfall.
Brandi Hinkle, spokesperson for the Arkansas Department of Higher Education, of which Broadway is interim director, said lottery scholarships for the upcoming school year would not be effected. However, Hinkle, said if lottery revenue continues to go down, future scholarships could be effected.
"It may be that we eventually we'll have to look at all categories of students and start to prioritize them," Hinkle said. Currently ADHE only prioritizes non-traditional students.
Also during Wednesday's meeting, some of the lottery commissioners expressed deep concern over the percentage of lottery funds going to scholarships.
During a somewhat tense exchange between Passailaigue and Pickard, Pickard called the percentage for the last fiscal year, 20.2%, "distressing." He suggested increasing that number to 25% and do whatever it takes to make that happen.
"Give me a number and I can fix it," Passailaigue said, but then cautioned the commission, pointing out that extra money would have to come out of prize money.
"If you increase the percentages, you decrease the amount for scholarships," Passailaigue explained during a break in the meeting. "I've done an analysis. If you go to 35%, you get $55 million instead of $95 million. Now, if you're a kid in school, do you want a percentage or a dollar figure? "
Commissioners pushed for concrete plans to raise the percentage to 25% as well as plans showing how the lottery will grow in the next fiscal year.
Passailaigue said the new $2 minimum on Powerball tickets and a push to highlight online games would likely bring in more revenue.