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Oklahoma Lottery scrambles to increase revenue

Oklahoma LotteryOklahoma Lottery: Oklahoma Lottery scrambles to increase revenue

Education funding doesn't see expected boon; officials cite low prize payouts as root cause

With sales floundering compared to projections, Oklahoma Lottery officials are scrambling to bring in more money.

State officials are saying the lottery hasn't been the boon to educational funding it was touted to be.

To increase lottery sales, Lottery Commission Executive Director Jim Scroggins is advocating putting more of the lottery sales into prize money, saying people play to win.

The fewer winning experiences they have, the less they play, Scroggins said.

The Oklahoma Lottery reports it has the lowest instant prize payout in the nation.

"Research indicates that as we increase the amount of funding we put into prizes, it should increase sales," said Lottery Commission Director of Administration Rollo Redburn.

He provided statistics from Missouri, Georgia and Texas that bear that out. Missouri records show that in 2001, instant sales were $272.658 million and the payout was 60.68 percent. By 2005, the payout was increased to 66.85 percent and instant sales increased 44 percent to $467.686 million. Missouri's unaudited instant sales in 2006 were $551.9 million, an increase of 18.01 percent over 2005.

Lottery fails to meet expectations

Despite the Oklahoma Lottery supplementing educational funding — it hasn't been the boon expected, according to state officials.

"We're disappointed our balance of funding has not gone up since the lottery," State Superintendent of Public Instruction Sandy Garrett said.

"It [lottery money] was to be in addition to our portion of the general fund money. Our money amount is more because the state budget has grown, but our percentage [of the state budget] has gone down to 35 percent. Pre-K through 12 used to be about 37 percent of the budget."

The state budget is $7.1 billion and used to be $5 billion, Garrett said.

"Most people are under the assumption education funding would go up along with the budget and the lottery would be on top of that," Garrett said.

It could be looked at as if the lottery money is supplanted — when it was supposed to be supplemental, Garrett said.

"It's disappointing that the lottery hasn't put more money into education."

By law, the Legislature is not to use funds from the Oklahoma Education Lottery Trust Fund to supplant or replace other state funds supporting common education, higher education and career and technology education.

State Rep. Jerry McPeak, D-Warner, said Garrett is correct in saying education is getting less of the state budget and the lottery money is supplanting — not supplementing, as the law mandates.

When the Legislature voted $3,000 teacher pay raises, the additional insurance and other teacher benefits were not funded, leaving the schools in limbo, according to McPeak.

The Oklahoma Lottery reported lottery funds provided $1,169 of the $3,000 teacher pay raise for fiscal year 2007.

The Legislature used lottery money to help fund the raises, McPeak said. And although the law told schools to give every teacher the $3,000 raise, it didn't provide the funding for the raise to teachers on federal programs out of the general fund, McPeak said.

So, some education expenses funded by lottery money aren't supplemental at all but unfunded mandates of the Legislature that should have come out of the general fund, McPeak said.

Assistant State Superintendent for Financial Services Shawn Hime said lottery funds are to be spent as follows:

  • 45 percent — Prize Money.
  • 30 percent — Education Trust (35 percent after first two full years).
  • 25 percent — Administration/Advertising.

The lottery money given to education, by law, is to be above and beyond normal education appropriations, Hime echoed.

"It is not to supplant money that would normally go to education ...," Hime said. "Some argue that if they hadn't had that money [lottery], they might not have given teachers that big a raise."

Hime said there is no way of knowing whether the Legislature would have given education the funds from another source.

But the Legislature appropriates the lottery money that goes to education. For example, in 2007 the Legislature appropriated a total of $250,000 for capital improvement needs of the School for the Blind and the School for the Deaf. The are not budgeted to receive any lottery money this year, Hime said.

He said that in 2008, the lottery money is to be divided:

  • 45 percent — Common education (Pre-K through 12)*
  • 39.5 percent — Higher education.
  • 5 percent — Teachers' retirement.
  • 5 percent — School consolidation fund.
  • 5.5 percent — Career Tech.

*Appropriated to the State Aid Formula for FY2008

Lowered projections

Lottery officials projected in May 2006 a possible $413 million in lottery sales. In December 2006 that projection was lowered to $243.6 million.

Sales for 2008, which began July 1, are projected to reach $227 million, with the state expected to receive $75.2 million.

Education's share is 30 percent of sales during the first two years and 35 percent after that. The Oklahoma Lottery has been in existence for 21 months.

Muskogee Daily Phoenix

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7 comments. Last comment 9 years ago by okmarc.
Page 1 of 1

United States
Member #3676
February 10, 2004
425 Posts
Offline
Posted: July 30, 2007, 11:19 am - IP Logged

45% payback? Are you serious with 25% advertising and admin? Who is running this lottery?  Highway robbery!

    Avatar

    United States
    Member #10720
    January 23, 2005
    933 Posts
    Offline
    Posted: July 30, 2007, 8:36 pm - IP Logged

    REALLY! why don't they do that in nj? Pick 4 BOX paid 67.50 tonight. Especially if there is any State planning to go RNG should put a LOT more into prize money.

      Avatar
      Oklahoma City
      United States
      Member #54055
      August 2, 2007
      22 Posts
      Offline
      Posted: August 2, 2007, 5:36 pm - IP Logged

      Actually 52% to prizes.  If you look at NC lottery (also brand new) it is about the same payout.  Give it time, it'll get there.  Eventually the legislature will understand the concept of more money to prizes = more sales = more money for education.

        wreakshavok777's avatar - enzyte thumb.jpg
        oklahoma
        United States
        Member #12313
        March 10, 2005
        165 Posts
        Offline
        Posted: August 3, 2007, 3:24 pm - IP Logged

        Ok lets see The casino,s around here are giving away  "H3 Hummers,New Corvettes,Choppers..and new $500 Grand Homes!.....And the lottery offers you scratch-off tickets that if your lucky you will get a free ticket , an Apple I-pod Nano or a new tv! The lottery commisioner says sales are low due to the casinos!! well duh! do the math. I don,t get it why does the lottery drag its feet. The lottery has brought in $122 million to the education fund with a crap lottery! Can you imagine the numbers if oklahoma,s lottery was similiar to say missouri , texas or tennesse? If people don,t start winning something  once in awhile they will go away...maybe the lottery will figure this out!Idea

         Winner Winner Chicken Dinner!!


          United States
          Member #16612
          June 2, 2005
          3493 Posts
          Offline
          Posted: August 4, 2007, 2:08 am - IP Logged

          I hope Oklahoma can increase their revenue, but how come their revenue is below normal?

            Avatar
            Oklahoma City
            United States
            Member #54055
            August 2, 2007
            22 Posts
            Offline
            Posted: August 6, 2007, 10:08 am - IP Logged

            What's below normal for Oklahoma though?  Most people from the state are still new to the Lottery thing.  It will take time to build up players and for the Lottery to be accepted.  $136 million to education isn't too bad, and occasionally I win some money.  I went to the casino Friday night and blew through $30 and didn't win anything but 50 cents at a time....  and how much have they given to education?  Not nearly as much. 

              Avatar
              Oklahoma
              United States
              Member #45345
              August 19, 2006
              23 Posts
              Offline
              Posted: August 8, 2007, 9:15 pm - IP Logged

              What's below normal for Oklahoma though?  Most people from the state are still new to the Lottery thing.  It will take time to build up players and for the Lottery to be accepted.  $136 million to education isn't too bad, and occasionally I win some money.  I went to the casino Friday night and blew through $30 and didn't win anything but 50 cents at a time....  and how much have they given to education?  Not nearly as much. 

              I totally agree. And keep in mind that the newspaper this particular story is taken from also published an editorial against the lottery shortly before the November 2004 election. The Tulsa World and The Daily Oklahoman (Oklahoma City) were both pro-lottery at the time, and voters apparently agreed. The lottery easily passed, and the first tickets went on sale in October 2005.

              On October 14, 2006, the one year anniversary of the Oklahoma Lottery, the Tulsa World published a front page story entitled "Lottery Seen as a Winner."

              The lottery seems to be doing fine to me, but of course it could do better, and hopefully it will.