North Carolina lottery sales jumped $1.2 billion while the state’s education share fell

North Carolinians spent about $1.21 billion more on lottery tickets in fiscal 2025 than the year before. The amount attributed to the state for education went down by about $16 million.

WLOS reported the numbers this week and raised a question that a teacher at A.C. Reynolds High School says she has been hearing for 20 years: where is all that lottery money going?

The share has fallen three years running

North Carolinians bought roughly $6.59 billion in tickets in fiscal 2025. Of about $6.6 billion in total revenue, close to $5 billion went straight back out as prizes, and about $1.08 billion was attributed to the state, counting net revenue and the state's share of unclaimed prizes.

For scale, US lotteries as a group transferred about $28.4 billion to their beneficiaries on roughly $109.4 billion in total sales in fiscal 2025, which is 26%. North Carolina at 16% is running about ten points below the national norm. Had it held its own fiscal 2024 rate of 20%, the same $6.6 billion would have produced roughly $1.32 billion, about $240 million more than it did.

Digital instant games explain most of it

Adam Owens, the lottery's director of corporate communications, pointed to the mix of games, saying players moved to digital instants and other games that "maybe don't return as high a profit margin." The audit shows how big that shift is.

Digital instant games generated about $2.6 billion in fiscal 2025, up 129% in their first full year, and paid out about $2.3 billion in prizes. That is a payout rate of 88.5%. North Carolina's 85 active scratch-off games average 72.2% by our figures.

Digital instants sales went from roughly $1.14 billion to $2.6 billion, a rise of about $1.46 billion, while total sales rose $1.21 billion. Everything else therefore shrank by roughly $250 million. The lottery sold more and kept less because the growth came in its thinnest-margin product.

The lottery's defense is that the payouts are the point. "The overwhelming majority of the money that comes in from a ticket sale goes right back to the people who are playing the game," Owens said. "Because if you don't have that ability to attract players with those interesting prizes, then you don't get the funding for education."

What the money actually buys

The legislature decides where it goes, not the lottery. For fiscal 2026-27 lawmakers allocated about $1.14 billion from the Education Lottery Fund: roughly $386 million for noninstructional support personnel, $258 million for needs-based school construction, and $257 million for school transportation, with the rest across pre-K, school repairs and scholarships.

There is no current allocation funding the state base salaries of classroom teachers, which is the gap between the label and the expectation. Buncombe County Commission Chair Amanda Edwards put it directly: "I don't think that people know that the ticket that they're purchasing is not supporting public education in the way that they may think it is." Buncombe received about $11.5 million in lottery funds last year, spent on roofs, HVAC, construction and secure entrance vestibules.

This is the pattern we found nationally in how much state lotteries actually give schools. Earmarked lottery money tends to fund capital and support costs that a state would otherwise carry elsewhere, which is a real contribution and a different thing from the classroom spending most ticket buyers picture.

What it means if you play in North Carolina

If the destination of the money matters to you, the product you choose changes it: a dollar on a scratch ticket currently sends roughly 2.5x more toward the state than a dollar on a digital instant.

If your own return matters more, the ranking flips. Digital instants paying 88.5% give players back more than scratch tickets at 72.2%, which is the same trade seen from the other side. North Carolina's scratch rack is above average nationally at 72.2% against 70.0%, eighth of the 38 states we rank, and current scores are on our North Carolina ValueScore™ rankings.

How we did this. Sales, prize, revenue-share and allocation figures are as reported by WLOS from audited fiscal 2025 results and the State Auditor's Office. The national 26% comparison uses NASPL fiscal 2025 figures of about $28.4 billion transferred to beneficiaries on roughly $109.4 billion in total sales. The 72.2% scratch payout is the average across the 85 active North Carolina scratch-off games in our database with a published payout percentage. The digital instant payout rate and the implied change in non-digital sales are our calculations from the audited totals reported by WLOS.

Sources

WLOS News 13 Investigates: North Carolina Education Lottery sales, education funding and community questions

NASPL: US lottery sales and transfers to beneficiaries