Audit: Digital instant games surging, yet hurting Education Fund transfers
By Alan Wooten | The Center Square
State / Affects Local – Twenty years since launch with four scratch-off instant games, the North Carolina Education Lottery and its policy objective have reached a new crossroads courtesy of online slot machine gaming offering an 87% payout rate.
In a performance audit report from first-term Republican state Auditor Dave Boliek, he and his staff have recommended the Republican majority chambers of the General Assembly “clarify North Carolina’s primary strategic objective for the Education Lottery.” Online slot machine gaming has risen form 0% of the annual revenue to 40% in three years, gross sales for the Education Lottery have risen 51% from $4.3 billion to $6.6 billion in two years, and percentage of sales transferred to the Education Fund have fallen from 23% to 16% in the last two years.
Still, the Education Fund received $1.02 billion in fiscal year 2023 and $1.09 billion in fiscal year 2024, and $1.08 billion in fiscal year 2025.
The audit said digital instant games – meaning, those mimicking slot machines at casinos – and lower sales in traditional lottery games are the main cause of the decrease in percentage.
(Lotto issues continued below...)
“Last December, the State Auditor’s Office released a financial audit of the Education Lottery, and we were left with questions on the amount of money going toward our public schools,” Boliek said. “With the release of this performance audit, we found that gambling trends have dramatically shifted. New online slot machine gaming, which has an 87% payout rate, now dominates the market.
“The Education Lottery today isn’t what it used to be, prompting auditors to recommend the primary policy objective of the lottery be revisited.”
State law sets a target, not a statutory requirement, for the Education Lottery to contribute roughly 38% of revenues to the Education Fund “to the extent practicable.” The pattern over two decades is falling short of the benchmark, yet $12.3 billion has been distributed through fiscal year 2025 with increases in actual dollars nearly every year.
Then-Lt. Gov. Bev Perdue, a Democrat, cast the tie-breaking vote in the Senate’s 24-24 deadlock allowing Democratic Gov. Mike Easley to sign the North Carolina State Lottery Act into law on Aug. 31, 2005. The following March was the launch; Powerball action began May 31, 2006; the state became active in MegaMillions on Jan. 31, 2010; and on March 11, 2024, the state launched online sports gaming.
Follow The Shelby Independent on Facebook, Instagram and TikTok. To contact Chuck about a story idea, send an email or visit the contact page.
Alan Wooten has been a publisher, general manager and editor. His work has won national or state awards in every decade since the 1980s. He’s a proud graduate of Elon University and Farmville Central High in North Carolina.
The Shelby Independent.
Comments