EDUCATION: The Georgia Lottery transferred $927.5 million to the Lottery for Education Account in fiscal year 2013. This accounted for 25.5% of lottery revenues and was the highest dollar amount raised for education in the Georgia Lottery's history.
PRIZES: The Georgia Lottery returned 64.2% of lottery revenue back to players in the form of prizes in fiscal year 2013. Higher prize payouts have proven to be an effective method of raising overall dollars for beneficiaries (see question 2 to the left and resources listed below).
RETAILER COMMISSIONS: More than 8,400 retailers throughout the state, including convenience stores, gas stations, supermarkets and restaurants, earn commissions for selling Georgia Lottery tickets.
Direct operating expenses of the Georgia Lottery Corporation accounted for 0.96% of lottery revenues in fiscal year 2013. Major gaming vendors (GTECH Corporation & Scientific Games International) receive a percentage of sales for their services. Altogether, Georgia Lottery gaming & operating expenses made up 4.0% in fiscal year 2013.
The Georgia Lottery’s mission is to maximize revenues for specific educational programs. In fiscal year 2013, the GLC transferred $927,478,000 to the Lottery for Education Account – that’s more than $2.5 million (on average) raised every day for HOPE & Pre-K. Georgia’s Lottery ranks #3 of all traditional state lotteries in terms of highest per capita returns to beneficiaries. Last year’s total dollar returns/profits for HOPE and Pre-K were the 9th highest in the nation (surpassed by states with much larger populations like California, Texas and New York).
Simply put, no. In Fiscal Year 1997, the Georgia Lottery transferred 35% of lottery revenues to the Lottery for Education Account in the amount of $581 million. In Fiscal Year 2013, the Georgia Lottery raised $927.5 million for HOPE & Pre-K, accounting for 25.5% of lottery revenues for fiscal year 2013. The Georgia Lottery responsibly manages prize payouts to maximize revenues for the important education programs funded with lottery proceeds.
When Georgia’s lottery legislation was drafted 20 years ago with a 35% target, it represented more of the drawing games that payout at a lower percentage than the instant (scratch-off) games that are more popular now. The “as nearly as practical” language included in the legislation allowed the lottery to be flexible and change with the marketplace.
Lottery case study after case study details the potential for unintended negative consequences of slashing prize payouts to boost profit. While profit percentages may increase – real dollars to beneficiaries decrease. In 1997, the Texas Legislature decreased prize payouts on instant games. The action resulted in a 40% decrease in instant sales ($1 billion sales loss) over a two year period. Although the percentage return to beneficiaries increased from 31.58% to 35.01%, the real dollars to beneficiaries dropped by more than $155 million (-24.5%). After the prize payout reduction was reversed, it took 7 years for instant sales in Texas to return to 1997 levels.
Percentages cannot fund scholarships and Pre-K classrooms, only real dollars.
The Georgia Lottery operates on 1% of lottery revenues and has been at or below 1% every year since 2002. In fiscal year 2013, lottery retailers earned a 6% sales commissions on each lottery ticket they sold. Major vendors that operate our gaming system and print instant games earn approximately 2% of revenues.
By law, the Georgia Lottery Corporation (GLC) is governed by a seven-member board of directors that is appointed by the Governor. The Lottery for Education Act also creates a joint committee of the General Assembly to serve as the Georgia Lottery Corporation Legislative Oversight Committee, comprised of the House Regulated Industries Committee & Senate Economic Development Committee. The Lottery is accountable to the Governor, the General Assembly through the Joint Legislative Oversight Committee, and to the public through regular and on-going audits and reports. All audits and reports are public documents. Additionally, the Georgia Department of Audits annually releases a special report on the Georgia Lottery – click here for most recent report.
The GLC board of directors commissions extensive compensation studies by independent third party firms to ensure GLC pay practices are in line with the marketplace; requires the Corporation to contract with independent auditing firms to ensure the GLC’s financial viability on an annual basis; and requests profit optimization studies be conducted periodically by independent gaming experts to ensure the Corporation is maximizing revenues to its beneficiaries.