News writer
Record-breaking lottery sales usually sound like good news for public education. You would think the more tickets that are sold would mean more money flowing into classrooms, right?
A new audit of the North Carolina Education Lottery shows that this equation no longer holds true. It also helps explain why higher sales don't automatically translate into higher funding for schools.
Record sales, but less for schools
According to the audit commissioned by State Auditor Dave Boliek's office, North Carolina Lottery sales hit a record new high in the 2025 fiscal year. During that time, players spent $6.59 billion on tickets and games. This is up 22.5% from the year before.
However, the amount of money going to public schools went in the opposite direction. In 2025, schools received about $1.05 billion. This is down 1.9% from the $1.07 billion they received in 2024.
When looking at the big picture, that means just 16 cents of every dollar spent on lottery games went toward public school funding.
This is a trend that has been happening in North Carolina. The audit showed that schools received 23% of lottery sales in 2023, 20% in 2024, and now just 16% in 2025.
Keep in mind that when the lottery launched in 2005, the state law required 35% of proceeds to be used to support education. However, lawmakers did later soften that mandate.
Why don't more sales necessarily mean more profit?
Many people have been confused about the disconnect between record sales and falling education funding. In a news release, Boliek said residents reasonably expect school funding to go up when ticket sales increase. He did add that the numbers do “raise a lot of questions.”
The audit gave us one clear answer on why this is happening: players are winning more money than ever.
Looking at the numbers, operating expenses for the lottery, like salaries and advertising, stayed relatively flat. Instead, a bigger share of each dollar actually went back to players as prizes.
In 2023, about 66% of lottery revenue was paid out in winnings. In 2025, that number climbed to 76%. This means there is less money available for everything else, including funding for education.
North Carolina Lottery responds
After the audit was released, the North Carolina Education Lottery responded, pointing to changes in Powerball and Mega Millions jackpots as another key factor in the decline in public school funding.
Lottery officials said those games are most profitable when the jackpots climb past $1 billion. This will help draw in casual lottery players and help bring in massive sales despite the long odds.
During the 2024 fiscal year, we saw six $1 billion jackpots across the two games. However, in the 2025 fiscal year, we only saw two.
This resulted in combined sales for those multistate games to fall by $174 million. This meant $70 million less in net profit.
Digital games played their part
Another factor, according to lottery officials, was the rapid growth of digital instant games, which were introduced in 2024. These online games offer faster play and more frequent wins for players. However, they also come with higher payout rates than traditional scratch-offs or draw games.
This shift to digital games has helped boost overall sales, but at the same time, it has shrunk profits. This combination helps explain why education funding has fallen short even as ticket buying surged.
This results in a new reality for lottery funding: record sales can still mean record excitement for players, but it no longer guarantees record checks for schools.
Enjoy playing the North Carolina Lottery, and please remember to play responsibly.
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