New audit: NC Lottery sales up, but less is going to schools

North Carolina’s lottery is selling more tickets than ever – but it’s putting less of the money it makes into schools, says Auditor Dave Boliek.

A new audit (opens in a new tab) found that gross ticket sales for the state’s Education Lottery rose from $4.3 billion in FY 2023 to $6.6 billion in FY 2025. But the percentage of that money that went to public education fell each year from 23% in 2023, 20% in 2024, and just 16% in 2025.

Growth in gross ticket sales increased an impressive 51% over two years. Yet the annual transfers to the education fund essentially remained flat, increasing from $1.02 billion in FY 2023 to $1.09 billion in FY 2024, and dipping to $1.08 billion for FY 2025.

A key factor in the declining proceeds is the rise of digital instant games, which entice players by paying out more often than traditional lottery tickets. Because of that, the lottery’s net profit on digital instants is lower.

“Digital instant games are designed to have a payout rate of approximately 87%,” wrote Boliek in the report. “They have gone from generating zero dollars in sales in FY 2023, to $2.60 billion in sales in FY 2025, which represented approximately 40% of total lottery sales that fiscal year.”

During the same time period, scratch-off tickets and the draw games saw a decrease in sales. And that’s a trend that seems to be continuing.

Greg Bowers, the lottery’s chief financial officer, told the North Carolina Lottery Commission in late June that digital instant sales saw a 22% increase in the first 11 months of the fiscal year compared to 2025. However, scratch-off sales dipped by about 3% for the year. As for those multi-state jackpot games, those are more unpredictable: consumers are not always motivated to play until the jackpot reaches a certain level.

Bowers said sales of scratch-offs and digital instants are projected to increase by 6.39% in 2027.

But the issue for Boliek is not whether people are buying more tickets or playing more often. It’s whether the lottery is meeting its statutory obligation to provide school funding – and he says it’s not.