RALEIGH — A recent audit by the North Carolina Office of the State Auditor revealed that contributions to public education from the state lottery have decreased over the past three years, even as total lottery revenues have increased significantly. That decrease may have a link to a past changes North Caroilina Education Lottery legislation.
According to the audit, the North Carolina Education Lottery reported total annual revenue of $5.4 billion for fiscal year 2024, with $1.07 billion in net revenues transferred to the Education Lottery Fund.
In fiscal year 2025, total revenues rose to $6.6 billion, but the amount transferred to the Education Lottery Fund decreased to $1.05 billion — a reduction of $20 million despite the revenue increase.
The audit noted that the percentage of lottery revenue going to education declined from 23% in fiscal year 2023 to 20% in fiscal year 2024 and down to 16% in fiscal year 2025.
The state auditor raised questions about the lottery’s operations, the formula for allocation of funds to the state’s K-12 schools, and the departure from the original legislative intent of the lottery when it was established two decades ago.
“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,” State Auditor Dave Boliek said in a release about the audit.
“At first glance, these numbers raise a lot of questions. Over the last three years, total revenues have increased by a total of over $3 billion, while contributions to public education have been flat.”
When the North Carolina Education Lottery was signed into law in 2005 by then-Gov. Mike Easley, legislation specified that “at least” 35% of revenue should be transferred to the Education Lottery Fund, which supports school construction, transportation and staffing needs. The lottery’s revenue distribution was designed to allocate 50% for prizes to the public and 8% for lottery expenses, with 35% directed to education.
However, the 2007 state budget bill modified the 35% requirement, changing it from a mandatory minimum to a guideline. One of former Gov. Roy Cooper’s Education Lottery Commission appointees was behind that change.
Cooper is now running to be the Democratic nominee for the state’s U.S. Senate seat.
During his time as governor, Cooper appointed five of the nine current members of the North Carolina Lottery Commission, including the current chairman, Ripley Rand, who was appointed to the commission in 2021 and elevated to chair in 2022.
Rand’s father, Tony Rand, was a former state senator and played a key role in creating the lottery in 2005. Tony Rand helped the lottery bill come up for a vote. The measure was controversial at the time, and then-Lt. Gov. Beverly Perdue had to cast a tie-breaking vote to get it passed.
Tony Rand resigned from the state Senate in 2009, well after the changes to the lottery distribution percentage were made in the 2007 budget bill. He later was appointed by Cooper to the lottery commission in 2017 and served as chairman from 2018 until his resignation in 2019. He died in 2020.
Cooper’s other appointees include Cari Boyce (term expires Aug. 31, 2028), Nigel Long (term expires Aug. 31, 2027), Joshua Malcolm (term expires Aug. 31, 2026) and Pamela D. Whitaker (term expires Aug. 31, 2026).
Campaign finance records show that all the members appointed by Cooper made donations to his campaigns over the years, with Tony and Ripley Rand contributing the most with more than $35,700 across two decades.
Boyce donated more than $5,100 to Cooper’s campaigns between 2004 and 2020. She also donated more than $550 to Cooper’s attorney general campaigns in 2008 ($319) and 2004 ($235). Long gave $6,400 and Malcolm gave $5,400 to Cooper for his 2020 gubernatorial reelection campaign. Whitaker donated $2,500 to Cooper in 2016 for his first run for governor.
Former House Speaker Tim Moore (R-Kings Mountain) and Senate Leader Phil Berger (R-Eden) appointed the remaining four commission members. Campaign finance records show some of their appointees also made political contributions to their appointing officials.
Moore’s appointees include Lindsey Griffin (term expires Aug. 31, 2028) and Randy Jones (term expires Aug. 31, 2027)
Griffin gave $1,000 to Berger in 2024 and $1,000 to Moore in 2020 for his congressional bid, and in 2022 again donated $1,000 to Moore. Jones had given $500 to Berger over a decade ago, in 2014.
Berger’s appointees include Chris Hayes (term expires Aug. 31, 2027) and Jason Roth (term expires Aug. 31, 2028). Hayes had given $1,500 to Berger in 2024, but no donations for Roth to Cooper, Berger or Moore were located.
North State Journal reached out to the Cooper campaign but did not receive a response until after publication of this article.
A Cooper campaign spokesperson issued the following statement:
“There hasn’t been a bigger supporter of North Carolina’s public school students than Roy Cooper. As governor, Roy worked to make historic investments in public education and fought Republican schemes to divert millions of dollars away from our public schools.”
