NC Education Lottery Spending on Education Drops to 16.4% of Revenue in 2024-25

The percentage of lottery revenue given to North Carolina education has steadily dropped since the lottery was introduced in 2005.

RALEIGH, NC, UNITED STATES, February 5, 2026 /EINPresswire.com/ -- The latest audit on North Carolina’s lottery revealed that the North Carolina Education lottery has steadily decreased the percentage given to education, dropping to 16.4%, in 2025, the lowest percentage recorded since the lottery launched in 2005.

When the North Carolina Education Lottery was created, the law required that 35% of lottery proceeds would go to fund public K-12 education. However, in 2007, the legislature changed this requirement to a guideline, removing the language that safeguarded lottery funds for strictly educational purposes. As a result, the percentage of lottery revenue allocated to education spending has steadily decreased. In 2024, the percentage of lottery revenue allocated for education spending dropped to 20.2 % and dropped to 16.4% in 2025.

In contrast, lottery revenue increased 22% in 2025, growing to $6.59 billion. But education programs in North Carolina received less in 2024-25, dropping $10 million from last year.

Lottery officials pointed to the increased portion of revenue that went to prizes for players—up 5.2% from last year—to explain the change. (1) In 2025, the lottery had fewer jackpot games with just 2 in 2025 compared to 6 in 2024. The large jackpots, some exceeding $1 billion, generate huge ticket sales as the jackpots grow and are big moneymakers for the state.

The state also introduced online “digital instant” games in 2024, which have a much higher payout rate than traditional-scratch-offs or lottery drawings.

In the 2024-25 fiscal year, the lottery distribution revenue was allocated to four areas:
-Prizes to Players 75.8% ($5 billion)
-Education Programs 16.4% ($1.08 billion)
-Retailer Commissions 4.1% ($270 million)
-Administrative Costs 3.8% ($250 million)

The $1.08 billion to education went to four main buckets determined by state law.
-School Construction: 51% ($549.3 million)
-NC Pre-K: 7% ($78.2 million)
-College Scholarships: 4% ($41.2 million)
-LEA Transportation: 2% ($21.4 million)

North Carolinians often expect the lottery to solve education funding needs. However, even if the lottery gave the originally required 35% of its revenue to schools (which would total $2.3 billion for FY 2024-25), it would only cover about 14% of the state’s total expenditures for K-12 public schools. (2) Lottery funds do not always go to the highest need areas because state legislators control allocations.

1. NC is selling more lottery tickets but giving less to schools, new audit shows: https://www.wral.com/news/nccapitol/nc-education-lottery-reduces-funding-public-schools-dec-2025/
2. State of North Carolina Annual Comprehensive Financial Report: https://www.ncosc.gov/sites/default/files/2025-12/2025_Annual_Comprehensive_Financial_Report.pdf

Heather Koons
Public Schools First NC
info@publicschoolsfirstnc.org
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