Q&A of the Day – How Much the Florida Lottery Contributes to Education
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Today’s Entry: Hi Brian, some time ago you discussed how much the Florida lottery contributes to education. Has that continued to rise with the increase in lottery ticket sales with all of these mega jackpots? Also how much does the PBC school district see of it?
Bottom Line: It has been quite a while since I covered the Florida Lottery’s contribution to education. Looking back at my notes, the last time I addressed the topic was over two and a half years ago and there have been some changes since then...including commonly with the size of lottery jackpots. That’s of course been the most noticeable with the Mega Millions jackpot which now tops $1 billion on the regular in large part due to the change in October of 2017 which made it harder to win. And that’s become a big part of the overall story as we’re talking about revenue generated through lottery ticket sales and education distributions. I’ll start with what changed that created this phenomenon for those who may not know.
In October of 2017 the Powerball consortium of states changed the rules to make it harder to win the jackpot. The change called for lottery players to select 5 numbers out of 69 compared to picking 5 out of 59 previously. The change made the already astronomical odds of winning the jackpot about 67% more difficult to win. The odds of winning dropped from 1 in 175 million to 1 in 302.6 million. The result is fewer winners, larger jackpots, more hype surrounding the large jackpots and thus greater participation by casual lottery players. It was a sheer marketing ploy to entice more lottery sales and its been a huge success from the consortium’s perspective.
Lottery ticket sales have paced 6% annual growth in recent years (excluding 2020 due to the pandemic). That’s obviously a much larger growth rate than the US economy and they’re expected to continue to grow at nearly a 7% rate annually through 2027. The silver lining for many who play is that while they may not win, they know that at least some of the money is going to education. But in answer to your question how much...? The answer is about a quarter out of every dollar. Over the past year here's how the Florida Lottery distributed revenue.
- 67.5% paid to winners
- 24.6% education
- 5.6% to retailers
- 1.3% to ticket vendors
- 1.0% operations expenses
Another way of looking at this is that once lottery proceeds have been paid out to winners about 76% of the proceeds went directly to education. As for what that’s looked like at the local level:
- Martin: $983,109
- Palm Beach: $45 million
Going back to the onset of the state lottery for education program in 1987 here’s the total amount which has gone to the school districts from the Florida Lottery:
- Martin: $71.9 million
- Palm Beach: $1.53 billion
Yes, when you play the lottery the majority of what you lose does end up in the pocket of the eventual winners (followed by the government in the form of taxes paid by the winner – which is yet another reason why juiced lottery sales are often encouraged by the governments involved), but for what’s left over three-quarters of it does end up in our schools. Palm Beach County sees the fifth largest share of those funds as the fifth largest school district within the state.