An Analysis of the North Carolina Education Lottery, 2007–17

State-sponsored lotteries are a popular way for legislatures to voluntarily increase revenue, with proponents typically suggesting that lotteries supplement educational funding. While lotteries are widely viewed as a solution to revenue challenges, questions exist over the extent to which they actually benefit schools. This study focuses on the impact of the North Carolina Education Lottery (NCEL) during its first decade, with specific attention to effects on the original beneficiary programs and per pupil funding. Using a decade-long trend of data in North Carolina, and a hierarchial linear model structured as a hierarchial growth model with annual observations nested in counties, we found that large increases in the sale of lottery products did not result in similar increases for the original, legislatively-mandated beneficiary programs as funds were used for other educational purposes. We also found that lottery revenues were not associated with per pupil expenditures.