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Back to November Ed Reporter

Education Reporter
NUMBER 262 THE NEWSPAPER OF EDUCATION RIGHTS NOVEMBER 2007

Lottery Promises Schools Much, Delivers Little

For years, lawmakers and the gambling lobby have promoted lotteries and other types of gambling as a "voluntary tax" that can bolster government programs, especially public schools. Proceeds from state lotteries go to education in 23 of the 42 states with lotteries. Polls show that many citizens of these states believe the lottery provides most of their state's education funding. A recent analysis by the New York Times, however, showed that pro-lottery rhetoric vastly over-represents what lotteries do for education.

Lottery money accounts for a tiny percentage of spending on education in the 23 states that earmark lottery proceeds for schools. New York's lottery does the most for schools, paying 5.3% of the education budget. In five states, lottery money pays for less than 1% of the education budget.

In some states, such as California, the lottery has made a smaller and smaller proportional contribution to education over the years. California's lottery paid 5% of the K-12 education budget in 1985, and now pays less than 2%.

Flagging contributions don't mean the lottery isn't thriving. In many states, lotteries make much more money but give a smaller percentage of the proceeds back to the government than they did a decade ago. The rest of the money goes back into the administration and expansion of the lottery.

State lotteries spent $460 million on advertising last year. Ad campaigns such as South Carolina's "Big Fun, Bright Futures" go on despite the facts about education and lottery funding.

Lotteries' broader marketing efforts include developing new games and lottery products to attract new players. 15 states have introduced electronic gambling machines, which provide instant gratification and are more addictive than traditional lottery games. Gambling officials hope these video terminal games will introduce a new generation of players to the lottery. Larger jackpots and other prizes, such as the new $50 scratch ticket in Kansas, Texas and Michigan, also bring in new customers. These larger prizes require changes in budget formulas so that lotteries can devote more dollars to the prizes.

States with lotteries compete with neighboring states for gamblers' money, and especially for the "core players" who buy most of the tickets. These core players, who make up only 10-15% of all ticket-buyers, provide 80% of the lottery's revenue.

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