How much do state lotteries actually give schools?

US lotteries transferred about $28.4 billion to their beneficiary programs in fiscal year 2025, and education takes the largest share of that money. The figure is down from almost $30.6 billion in fiscal year 2024, a drop of roughly $2 billion in twelve months.

That decline sits awkwardly next to a run of record-breaking lottery revenue from individual states. A handful of lotteries had their best year ever for schools while the national pool shrank.

Why the national total fell

The cause was jackpot fatigue. American lotteries sold $96.17 billion in traditional games in fiscal 2025, down 5.1%, and $109.38 billion counting gaming machines, table games, and sports betting, down 3.6%. Draw games carried almost all of the loss, falling 13.8% to $31.76 billion. Powerball sales dropped 49.6% and Mega Millions fell 22.0%, because only one jackpot climbed above $1 billion between July 2024 and June 2025.

However, scratch-offs held up. Instant ticket sales slipped 0.7% to $62.80 billion, and instants now account for 65.3% of traditional lottery sales, their highest share since fiscal year 2022. A state whose players lean on scratch-offs had a much steadier year than one that depends on jackpot runs, which is most of the explanation for why the state-level numbers diverge so much.

The states that set records anyway

Georgia had its best year on record. The lottery raised $1,540,868,000 for education in fiscal 2026, the eleventh straight year above $1 billion, pushing its total since 1993 past $31.3 billion. Every dollar of profit there is earmarked for the HOPE Scholarship and the state's Pre-K program.

New York contributed $3.65 billion to public schools in fiscal year 2025-2026. Texas sent $1.8 billion to the state in fiscal 2025, including $1.77 billion to the Foundation School Fund. Maryland's lottery and casinos sent $1.64 billion to state programs, with close to $700 million of it for schools. Idaho handed public schools a record $56.25 million dividend, up from $46.9 million a year earlier.

Tennessee went the other direction

Tennessee crossed a line last year that no state wants to cross. Spending on lottery-funded scholarships exceeded net lottery proceeds for the first time in fiscal 2025, according to the nonpartisan group ThinkTennessee. Adjusted for inflation, proceeds fell about 22% between 2022 and 2025, a real-terms loss of more than $113 million, while the number of students claiming aid kept climbing.

Tennessee is more exposed than most. In fiscal 2025 it was one of only five states where non-tax sources, lottery money chief among them, made up more than 15% of total higher-education funding. When a state builds a scholarship program on ticket sales, a bad jackpot year turns into a budget problem.

A record check does not always mean more money for schools

Idaho is a useful example of the gap between the headline and the effect. Under a 2024 school facilities law, the K-12 dividend no longer goes to districts and charters for local projects. It flows into a fund that offsets voter-approved bonds and levies, which state leaders described as easing the burden on local property taxpayers. The check got bigger and the destination changed.

Studies of K-12 earmarks generally find the money substitutes for general fund dollars rather than adding to them, so a budget of $10 million plus $9 million in lottery proceeds tends to stay a budget near $10 million. On the higher education side, a Brookings report found lottery earmarks lifted appropriations by about 5% starting in the second year, produced a large increase in merit-based financial aid, and came with a reduction in need-based aid of roughly 12%. Merit aid tends to reach wealthier students.

Sources

NASPL: fiscal 2024 US lottery sales and transfers to beneficiaries

NASPL: Fiscal 2025 Lottery Sales and Revenues, United States

Brookings: Who wins and who loses when states earmark lottery revenue for higher education