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Lottery Aids Local Schools’ Budgets

By Assemblyman Will Barclay (R-Pulaski)

In the past, my office has received calls from constituents who wonder how much money the lottery makes for the state and where that money goes. I thought many of you would like to read in more detail about lottery sales. This department is unlike other state departments in that it is focused on sales.

By state law, all lottery profit is given back to education. According to the Lottery’s financial statements for 2009-2010, this was a record-breaking year for lotto sales. All sales totaled in 2009-10 were $7.818 billion—a 2.1% increase from the previous year. This includes traditional lottery ticket sales, scratch offs, quick draw, and Take 5 among other games. Lottery tickets are sold at approximately 17,000 licensed retail locations. There are also eight licensed video lottery gaming facilities located in Saratoga, Monticello, Farmington, Hamburg, Batavia, Tioga, Vernon, and Yonkers. Administrative costs for traditional lottery sales were about $651 million. This figure includes operating expenses, fees paid to gaming contractors, and commissions for retailers.

As you can imagine, the Lottery’s biggest expense is prize winners, which totals roughly 80% of direct expenses. For traditional lottery prizes, this amounted to $3.95 billion. After prizes and expenses were paid, the lottery provided $2.67 billion in aid to education for the 2009-10 fiscal year. This is roughly 12% of the state’s total education budget. Local schools were able to benefit directly from lotto sales. School Districts in Onondaga County were awarded nearly $102 million from the New York State Lottery Department. In Oswego County, schools were awarded about $33 million.

New York State first began to conduct the Sweet Million drawing in September 2009 and Powerball drawing in February 2010. These sales will also contribute more heavily in the Lottery’s next financial report.

Other interesting facts about the lottery:

· The Lottery was established in 1967. Since that time, it has earned a cumulative $39.3 billion for education.

· Roughly $470 million worth in prizes went unclaimed in the last fiscal year (March 31-March 31).

· Net proceeds earned for Lottery Aid to Education in fiscal year 2010 were up by 4.8% from 2009—roughly $122 million.

· All Lottery tickets are bearer instruments, meaning they are just like currency. If you lose your ticket, and it does not have your signature on it, anyone can use the ticket to claim a prize.

· Federal, state, and local income taxes are withheld from prizes over $5,000 or from prizes over $600 when the winner does not provide a social security or tax identification number when claiming the prize. Withholding varies according to the winner’s place of residence.

· The New York Lottery’s Leaders of Tomorrow (LOT) Scholarship Program was not included in the final New York State budget for the 2010-2011 fiscal year. As a result no new scholarships were awarded.

· The Lottery states on their website that it “adheres to an elaborate regimen for each and every Lottery drawing with strict policies and detailed checks and balances. The drawing process is videotaped and each component is observed by an independent auditor to ensure the absolute integrity of each drawing and that each drawing is completely fair and random.”

For more information, visit www.nylottery.org. If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at [email protected] or by calling (315) 598-5185.