Last updated: July 18. 2013 7:08PM - 118 Views
Rep. Hubert Collins

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Last fiscal year was expected to be a banner year for sales at the Kentucky Lottery, with a total of $817.7 million in sales projected from both the lottery’s online and instant games.

Most of that money (historically 60 percent) will be paid to the winners, with retailers and operating expenses also getting their share. But the state treasury will get some, too–-hundreds of millions of dollars, in fact.

Year-to-date sales for the Kentucky Lottery as of May 31, 2012 totaled $704 million, with the State of Kentucky earning 28.3 percent of that total, or around $198.4 million, for merit based scholarships, need based grants and literacy development. That is on par with the 27 percent of proceeds—or $3.69 billion—that the Kentucky Lottery Corporation has transferred to the state since the lottery began selling its tickets and games in April 1989.

Lottery winners have received the largest payout from the lottery so far this year (59.8 percent of total sales), with the percentage earned by the Commonwealth coming in second, followed by payouts to retailers (6.6 percent) and the lottery’s marketing or operating costs (5.3 percent).

One question that state lawmakers have been asked by other citizens throughout the state over the past 20 years is, where does the lottery money go? Many doubt it is going for education, as specified by state law, and want the cold, hard facts.

Well, here they are.

The Kentucky Lottery has earned more than $3.5 billion for the state’s treasury since 1989. Through June 2011, those proceeds have gone to the state’s General Fund ($1.75 billion, including $214 million for guaranteed base funding for schools); merit- and need-based scholarships or grants, and reserve funds for the merit scholarship program, known as “KEES” ($1.66 billion); $36 million for literacy development; and $20.8 million between fiscal year 1999 and fiscal year 2003 for the state’s Affordable Housing Trust Fund (AHTF) to help build over 2,770 homes for citizens in need. AHTF dollars have come from fees on new mortgages, recorded deeds and 21 other records kept by county clerks since 2006.

Let’s break this down a little more. The merit-based KEES program (that stands for Kentucky Educational Excellence Scholarship) and need-based College Access Program (or CAP) and Kentucky Tuition Grants Program have received $1.74 billion from the Kentucky Lottery Corporation since fiscal year 1999. More than 1.3 million college scholarships and grant awards have been made thanks to this funding, which in turn has convinced many of Kentucky’s “best and brightest” high school students to pursue a postsecondary education here at home.

Now, let’s take an even closer look at where the lottery money goes by reviewing the Kentucky Lottery Corporation’s report on proceed distribution for fiscal year 2011.

Besides the $1.7 billion that has funded college grants and scholarships for Kentuckians and funding provided by the lottery for the AHTF in the past, literacy funding from lottery proceeds has helped develop the successful Kentucky Early Childhood Reading Incentive Fund, the Kentucky Read to Achieve program, and the state’s Collaborative Center for Literacy Development. I would be careless if I left out the fact that $32 million in lottery proceeds were allocated by the Kentucky General Assembly in the early 90s to provide one-time bonuses for Kentucky Vietnam veterans. Then there was the $214 million earmarked for elementary and secondary education by the General Assembly in 1993 and 1994, and more than $1.5 billion in lottery proceeds allocated over the years for a number of programs paid for from the state’s General Fund.

In other words, the Kentucky Lottery has done a lot for our state, and we have the numbers to prove it.

Lottery officials who shared much of this information with Kentucky state lawmakers at a legislative meeting in June said the Kentucky Lottery Corporation is always looking for new ways to improve sales and, in turn, increase the state’s proceeds.

And, of course, the best way to increase sales is to find new ways to encourage people to buy lottery tickets and games.

That said, the Kentucky Lottery is implementing a rewards program this fall called ‘Points for Prizes”—a program that will allow players to enter non-winning ticket numbers on the Kentucky Lottery web site and earn points for merchandise and prizes. Once it is fully implemented in Kentucky, Points for Prizes is expected to add another 2 to 4 percent to lottery sales (or an increase of $16 million to $34 million in proceeds) by effectively making every player a winner in one way or another.

I hope this has been an informative look at the Kentucky Lottery for citizens in our community, and I’ll share more of the news in Frankfort with you next time. Have a good week.

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