RALEIGH — A required financial statement audit of the North Carolina Education Lottery released near the end of 2025 by the North Carolina Office of the State Auditor describes a revenue increase but a decrease in the amount transferred for education spanning the 2024 to 2025 fiscal years.
“North Carolinians have a reasonable expectation that if the Education Lottery’s ticket sales go up, money going toward our public schools would increase as well. At first glance, these numbers raise a lot of questions,” said State Auditor Dave Boliek. “Over the last three years, total revenues have increased by a total of over $3 billion, while contributions to public education have been flat.”
The financial report shows the Education Lottery reported total annual revenue of $5.4 billion for the 2024 fiscal year. Of that total, $1.07 billion were net revenues for the Education Lottery Fund, which helps fund various public school needs such as school construction, transportation and staffing.
Revenues increased the following fiscal year to $6.6 billion, but the amount sent to the Education Lottery Fund (ELF) dropped to $1.05 billion.
North Carolina Education Lottery’s (NCEL) revenue distribution priority includes 50% for prizes to the public and 8% for lottery expenses, with 35% to be transferred to the ELF.
The NCEL was signed into law in 2005 by former Gov. Mike Easley as part of that year’s state appropriations act. The bill faced opposition from both parties and was sent to Easley after then-Lt. Gov. Beverly Perdue cast a tie-breaking vote in the Senate.
At the time the NCEL law was enacted, “at least” 35% of the revenue was to be transferred to the Education Lottery Fund. The law, however, was altered in the 2007 budget bill, turning the 35% requirement into a guideline.
Over the years, the percentage going to education has not been maintained, an issue noted by the North Carolina Office of the State Auditor, which says in the past three years the percentage has “gone from 23% in FY 2023, to 20% FY 2024, to 16% in FY 2025.”
NCEL issued a three-page management commentary outlining fiscal year 2025 revenues, which cited multistate jackpot games like Powerball tied to a drop in lottery games sold in stores.
“Retail sales declined mainly due to the underperformance of national, multistate draw games, Powerball and Mega Millions. Offsetting that decline was the growth in sales of Digital Instant games,” the NCEL commentary reads. “As Digital Instant games attracted new lottery players, they rose to the second most popular way to enjoy lottery play.”
The financial report also cited Digital Instant games as being a driver behind its $6.59 billion “sales record” in fiscal year 2025. Those games added $2.6 billion in sales and have “quickly become the second most popular category of games behind scratch-off games, accounting for nearly 40% of overall sales for the fiscal year.”
Additionally, Digital Instant game sales “grew by 129% in the first full year of the program,” and 25 new games were added, including “Monopoly,” a progressive jackpot shared between the NCEL and the Virginia Lottery, which awarded a $6.7 million jackpot to a North Carolina winner, the largest jackpot ever won in North America.
According to Boliek’s press release, he spoke with NCEL leadership to discuss the report ahead of its public release. Boliek’s agency began a performance audit of the NCEL, and the press release says the last performance audit was conducted in 2008.
In late December, Boliek also announced a new dashboard tracking lapsed salaries and long-term vacancies of six months or longer in state agencies. As of Aug. 6, the dashboard showed more than 8,800 long-term vacancies, which generated $1.04 billion in lapsed salaries.
“Since day one, the State Auditor’s Office has been committed to providing the public with new tools and resources that inform North Carolina citizens about how their government operates,” said Boliek. “This new dashboard brings transparency to the dollars and cents behind vacancies in state government. The new division will continue to evaluate areas where government can provide the best return on taxpayer dollars.”
The dashboard was statutorily required by Session Law 2025-89 and is part of his agency’s new Division of Accountability, Value, and Efficiency.
