Report: California Lottery sales are booming but schools aren't seeing any more money

LOS ANGELES - Contributions to California schools from the state lottery are unchanged from 12 years ago, despite revenue that has soared in recent years thanks to enormous jackpots, a radio station reported.

Rule changes implemented by state lawmakers eight years ago eliminated the requirement that 34 cents of every lottery dollar go to education, KPCC-FM reported Tuesday.

The idea was to free up the California Lottery to sweeten jackpots in the hope that extra ticket sales would push the dollar amount higher, even as the percentage going to schools dipped.

But the changes have meant it takes the lottery longer to reach the same level of financial support for schools. These days, the education contribution is just 23 cents of lottery revenue, according to the station.

In the current fiscal year, it took an additional $2.3 billion in ticket sales to reach the same level of support for schools - $1.6 billion - that the lottery provided in fiscal year 2006, adjusting for inflation.

The California Lottery declined KPCC's request to interview an official for the story. But in an email, spokesman Russ Lopez said, "This strategy has worked," referring to the increased jackpots for winners.

Lifting the cap on how much the lottery pays out in prizes "has resulted in increased net revenues available to supplement funding for public education," Lopez said.

Zahava Stadler of the non-profit EdBuild, which studies education funding, said it's no surprise that more lottery tickets are being sold as prizes are jacked up.

"But the fact that education dollars have remained pretty flat tells you that more and more what the state is doing here is running a casino, rather than funding public schools," Stadler said.

California Lottery revenues in 2018 will soar to $6.9 billion, more than doubling the amount from just a few years ago. The lottery's revenues now top those at Fortune 500 companies such as Clorox, Yum Brands and Harley Davidson.

Bill Hertoghe, a former director of security for the California Lottery who still consults with the agency, said he rarely heard talk about the share of money for education when he worked there.

He described the lottery's priorities as: "Sales: priority No. 1. No. 2: sales. No 3: sales."

"We're selling more, more money's going to the player, and about as much is going to education. And that was never the intent," Hertoghe said.