The Oklahoma Lottery Commission has generated record-breaking revenue in recent years, which has pushed more money into the state's education initiatives. (Photo by Kennedy Thomason/Oklahoma Voice)
OKLAHOMA CITY – Oklahoma’s lottery revenue has reached new highs following a decision by lawmakers to increase the prize amounts offered.
The Oklahoma Lottery Commission recorded an all-time high of about $380.5 million in sales revenue and about $87.6 million was reinvested in education in fiscal year 2023.
It is projected to have its second best year in its history in budget year 2024 with $354.6 million in sales and $87.5 million for education. The fiscal year ended June 30, but external auditors are still completing records.
Jay Finks, executive director of the commission, said the lottery is run on a net-profit model.
“Every penny of profit that we make goes to education, goes back to the state,” Finks said.
The lottery was established in 2004 after Oklahomans approved State Question 706 . It created the Oklahoma Education Lottery Trust Fund, which set aside a portion of the lottery’s revenue for “education-related purposes.”
When the lottery became operational, about 35 cents on the dollar went to education. That model generated less revenue to pour back into education because bigger prizes couldn’t be offered to incentivize players, Finks said.
In 2017, lawmakers adjusted the formula in an effort to draw in more players. At the time, state budget officials estimated the change would increase money for education by $110 million over five years.
Lottery revenue by year:
Projected fiscal year 2024: $87.5 million
Fiscal year 2023: $87.6 million
Fiscal year 2022: $80.2 million
Fiscal year 2021: $64.4 million
Fiscal year 2020: $67.5 million
Now, the lottery appropriates about 25 cents on the dollar to education, Finks said, allowing the commission to reinvest in prizes and drive revenue upward. This allows for a higher return for education, as seen in fiscal year 2023, he said.
The lottery appropriates 45% of its revenue to public schools, 39.5% to higher education and the rest between the teacher’s retirement system, the school consolidation fund and CareerTech.
Out of a $1 prize, Finks said 60 to 65 cents is paid out as a prize, 10 cents goes to retailers, 10 cents pays for gaming costs and the commission takes three cents to support itself. The rest is left for education.
Since fiscal year 2018, Finks said Oklahoma’s lottery ranks in the top two states in growth.
Growth has been a priority for the commission, he said.
Finks attributes Oklahoma’s lottery growth to staying open during the pandemic while many other entertainment industries did not. That allowed the lottery to grow its sales, and it has maintained most of that growth, Finks said.
Another major contributor to the lottery’s growth is the explosion of self-service machines, which customers can find in local gas stations.
Finks said the commission wants the Legislature to approve iLottery, which allows lottery access via phone.
Finks said about 14 states already use iLottery, and it would allow Oklahoma’s lottery to generate more money for education.
“So that’s really my message to the Legislature, to anyone, and that’s to say, ‘Hey, I have a way to get more money to education, a proven way to get more money to education, if we can figure that out,’” Finks said.
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