Posted on 01/26/2026 1:35:37 PM PST by WhiteHatBobby0701
North Carolina’s state website claims that about 30% of the revenue from lottery tickets helps fund public schools. Yet despite record-breaking sales, that has not been true in years, according to a new state audit.
Just 16% of lottery revenue from fiscal year 2025 will go toward education, auditors claim.
North Carolina legalised lottery tickets in 2005 with a requirement that 35% of all revenue would be invested in public education. The money is used for school construction, college scholarships, teacher salaries and more.
The requirement was changed to a “guideline” in 2007, and the percentage of lottery revenue that makes it to schools has been declining ever since.
North Carolina sold a record $6.6 billion worth of lottery tickets in 2025, a huge increase from the $5.4 billion sold in 2024.
However, prize money also increased. Financial statements show North Carolina paid $5 billion to lottery winners in 2025.
Commissions for retail stores that sell lottery tickets cost $269 million. Lottery officials also spent $2.3 million on rent for office space and bought $2.2 million worth of furniture and equipment, an increase of more than $1 million compared to 2024. Employee travel cost $377,000.
After all the expenses were paid, there was just $1.1 billion left for public education investments. That was barely more than in 2021, when the state sold only $3.8 billion in lottery tickets.
Rising salaries have also increased the lottery agency’s expenses. Salaries and benefits cost almost $40 million in 2025, an increase of nearly $6 million from 2024, according to the audit. There were five people earning a salary of $200,000 or more in 2024, including $281,459 for Lottery CEO Michael Machalko.
In its response to the audit, the North Carolina Education Lottery blamed its high expenses on the surging popularity of digital lottery games. Digital games typically have higher prizes than draw games like the Powerball, meaning the state gets to keep less of the revenue. Even though overall lottery sales are up, sales at brick-and-mortar retail stores are declining.
Critical quote: “Let me point out: that is cumulative $3 billion in additional revenue over the previous two fiscal years with relatively flat contributions to public schools,” State Auditor Dave Boliek told WXII12. “The real question that needs to be asked on behalf of the people of North Carolina is: explain the business model.”
Summary: Education funding should be based on sound investments, not luck of the draw.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
Dear FRiends,
We need your continuing support to keep FR funded. Your donations are our sole source of funding. No sugar daddies, no advertisers, no paid memberships, no commercial sales, no gimmicks, no tax subsidies. No spam, no pop-ups, no ad trackers.
If you enjoy using FR and agree it's a worthwhile endeavor, please consider making a contribution today:
Click here: to donate by Credit Card
Or here: to donate by PayPal
Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794
Thank you very much and God bless you,
Jim
It never is, just like all gambling and legalized marijuana it’s always a bait and switch.
Two years to go from Shall to Should.
I am not surprised.
When the money is flooding in, politicians will find a way to get their fingers wet.
I suspect that if the lottery contributes “x” to education, funding from tax revenue will be reduced maybe even by “x”.
As far as profit from the gambling operation, seems like they can adjust their machines to whatever odds they want.
I was in a casino on a cruise ship a few weeks ago. The slot machines are all electronic. The screen has images that look like rotating wheels but certainly they can change the odds in the machines remotely whenever they want.
A state lottery is a tax on stupid people.
And whatever money went to education did not add a penny to the education budget because if $1 billion was added from the lottery, the $1 billion that had been going to education was redirected elsewhere.
And let me say that a shit ton of money that's "for education" DOES NOT go to educating students. It goes to fund more union dues-paying BUREAUCRATS -- administrators, analysts, specialists, managers, secretaries, junkets, etc. etc.
Lotteries are for people who are bad at math!
Florida did the same thing way back in the late 80’s, early 90’s.
They pulled the same scam here in Illinois.
L
"North Carolina tied at 44th nationally for "School Quality" in WalletHub's 2026 rankings"
That seems a cost of sales totally unjustified in this day of electronic vending machines. Locations ought to be happy to have the business associated with the foot traffic.
United Way did the same thing with their user directed donations. The only way the target charity would get extra would be if more money was specifically donated to that group than the United Way has pre-budgeted for it. And even then the charity had to justify what they would do with the extra money to get it. To
That is the Zell Miller Revolution that created this mess. And that is his legacy. Expanded government, higher costs for education for everyone to pay subsidised scholarships. I’ve noted ObamaCare subsidies are doing the same for health care.
“The requirement was changed to a “guideline” in 2007”
promises made, promises broken ...
no doubt the bulk of NC lottery proceeds is spent on green nonsense, bike paths, bus lanes and the like ... probably not a penny is spent on anything that would actually improve the lives of the volk ...
I’ve lived in quite a few states including NC for a while now. I don’t play scratch tickets match...maybe once a month Ill get a five dollar one....but I can tell you that I have won many time in other state lotteries even if it was just winning your money back...and have NEVER once won on a scratch ticket in NC...not once. I stopped buy them a couple years ago because of it.
IIRC—CALIF LOTTERY HAS NEVER EVER BEEN AUDITED.
IMO-—IT SHOULD BE ON AN ANNUAL BASIS
FERTILE GROUND YET TO BE PLOWED ???
I’d like to see the stats on Florida’s lottery.
There are thousands paid in lower tier wins, like matching 3 or 4 numbers for a couple hundred or even 50k or so.
So, yeah...jackpots are a real crap shoot but there are better odds at lower win amounts.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.