Is Oklahoma Lottery’s Education Requirement Restricting Revenue?

Tim Boyle / Getty Images

Oklahoma and 32 other states are members of the Multi-State Lottery Association, the organization behind Powerball.

Oklahoma’s lottery was approved by voters through a pair of state questions in 2004’s general election ballot.

Thirty-five percent of lottery revenues are earmarked for education.

In 2004, then-State Finance Director Scott Meacham estimated the lottery would bring in about $150 million a year for public schools and colleges.

The lottery has yet to raise half that amount.

Could the current guaranteed education percentage actually mean less lottery money is going to education?

Jim Scroggins, executive director of the state Lottery Commission, says yes.

The state lottery generates about $70 million each year for education. The Oklahoman’s Megan Rolland recently asked the question: “What happened to the lottery funds?”

The growth of the lottery is restricted by its education requirement, Scroggins told the paper.

The argument goes like this:

Lottery revenue is generated by ticket revenues. Bigger prizes attract more players, which means more ticket sales. Increased ticket sales brings more revenue, which means more money for schools.

But increasing prizes isn’t so easy, Scroggins told The Oklahoman. Once education gets its 35 percent and operating expenses are covered, there isn’t enough money left to increase the size of the prize pot.

Oklahoma Lottery Commission

Oklahoma's lottery includes revenue from "scratcher" games like Oklahoma Hold 'Em.

Of course there are other ways to increase ticket revenue.

One way: Make more winners, which the multi-state Powerball authority hopes to do by bettering the odds of winning.

Another way to increase ticket revenue? Raise the ticket price. The Powerball organization is doing that, too, though Scroggins debated the wisdom of that to The Oklahoman.

“I thought it was just the wrong time to be doing it because of the economy,” Scroggins said. “But I was outvoted. I think it has the potential to be a good decision.”

Starting Jan. 15, Powerball tickets will increase to $2 from $1.

Meanwhile, Rolland reports, education funds from tribal gaming are filling in where lottery revenues have fallen short.

Fees charged to tribal gaming operations brought in about $416 million during the past six years specifically for education as well as funding for the general fund and gambling addition programs, according to the Office of State Finance.

All of that funding went directly to common education.