A recent audit has unveiled troubling trends in how North Carolina’s Education Lottery allocates its revenues. Despite rising lottery ticket sales, the funds directed toward public school financing have significantly declined.
Declining Educational Funding from Lottery Revenues
The audit, issued by an independent firm on behalf of State Auditor Dave Boliek, reveals that only 16 cents of every dollar spent on lottery tickets in the fiscal year 2025 contributed to public education funding. This is a marked decrease from 23% in 2023 and 20% in 2024.
Historical Context
When North Carolina established the Education Lottery in 2005, legislation mandated that 35% of the proceeds should support educational initiatives. However, legislative amendments transformed this requirement into a mere suggestion, resulting in a steady decline of educational funding from lottery revenues.
Lottery Sales Data
Key statistics from the audit highlight the disparity between rising sales and stagnant education funding:
- 2024 Sales: $5.376 billion with $1.07 billion allocated to the state.
- 2025 Sales: $6.586 billion with $1.05 billion allocated to the state.
- Increase in Spending: A 22.5% rise in lottery spending by North Carolinians from 2024 to 2025.
- Education Funding Drop: A 1.9% decrease in funds directed to education during the same period.
Factors Contributing to Reduced Funding
Auditor Boliek raised concerns regarding public expectations. “North Carolinians anticipate that increased lottery sales will boost education funding,” he stated. The audit noted several reasons for the diminishing share of funds dedicated to education:
- Players are winning more, leading to higher payouts.
- The number of large jackpots in games like Powerball has decreased.
- The 2024 fiscal year featured six billion-dollar jackpots, while 2025 saw only two.
- Digital instant games introduced in 2024 have higher payout rates, impacting net profits.
Lottery’s Response to Audit Findings
The lottery management acknowledged the audit’s findings and attributed the reduced net profits to lesser multi-state jackpot sales and increased payouts. The lottery also reported that the percentage of money paid out to players rose dramatically from 66% in 2023 to 76% in 2025.
As North Carolina navigates its lottery policies, the tension between rising sales and dwindling educational funding raises significant questions about the future of public school support in the state.
