NCPA - National Center for Policy Analysis


October 10, 2007

An examination of lottery documents, as well as interviews with lottery administrators and analysts, finds that state lotteries raise very little money for the schools that many of them were set up to benefit, says the New York Times.


  • Among the states that earmark lottery money for education, lottery dollars accounted for 1 percent or less of the total K-12 education financing last year in five states -- New Jersey, Oklahoma, South Carolina, Idaho and Nebraska.
  • At least five states -- California, Missouri, New Jersey, Ohio and Washington -- channel lottery money to higher education as well as elementary and secondary schools; in these states, lottery proceeds amount to less than 5 percent of the total education financing.
  • In at least four states -- California, Illinois, Michigan and Texas -- lottery dollars as a percentage of K-12 education money has declined or remained flat over the last decade.

In reality, most of the money raised by lotteries is used simply to sustain the games themselves, including marketing, prizes and vendor commissions, says the Times.  And as lotteries compete for a small number of core players and try to persuade occasional customers to play more, nearly every state has increased, or is considering increasing, the size of its prizes -- further shrinking the percentage of each dollar going to education and other programs.

In some states, lottery dollars have merely replaced money for education.  Also, states eager for more players are introducing games that emphasize instant gratification and more potentially addictive forms of gambling, says the Times.

Source: Ron Stodghill and Ron Nixon, "For Schools, Lottery Payoffs Fall Short of Promises," New York Times, October 7, 2007.

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