ATLANTA — QUESTION 

"I heard that the Georgia lottery gives money, contributes money that's supposed to Be going to the HOPE scholarship, but there is a loophole that they're able to use so they're not contributing the full percentage amount that is required yearly to the HOPE scholarship. Is that true? Could you find that out for us?" - Karin Lopez Sandiford

ANSWER 

Under law, the Georgia Lottery is supposed to contribute "as nearly as practical" 35 percent of its sales to educational funds, including the HOPE scholarship and Georgia Pre-K. The phrase "as nearly as practical" gives the lottery a lot of leeway. While we wouldn't call it a loophole, we can confirm the lottery is not contributing fully 35 percent to Georgia's HOPE scholarship and Pre-K.

SOURCE 

The Georgia Lottery 

BACKGROUND

The Georgia Lottery was created in 1992 and it was among the first of its kind. It was created to fund free pre-kindergarten programs and give scholarships to Georgia high school students who choose in-state schools and meet certain criteria, including a 3.0 GPA.

The law that created the lottery required “as nearly as practical” 35 percent of lottery sales be put towards funding HOPE and Georgia’s Pre-K programs. Forty-five percent goes to prizes for lottery players. The rest goes for operating costs.

How is the lottery doing on hitting that 35 percent number? It's the phrase "as nearly as practical" that gives them some leeway. We ran the numbers.

Last year, the lottery paid out $1.1 billion for HOPE and Pre-K. This is where that stands when it comes to percentages:

Georgia Lottery education contributions

  • 2018: 26.2%
  • 2017: 25.7%
  • 2016: 25.5%

In the 1990’s, when the lottery first started, the percentages were closer to that 35 percent mark. However, the amount of money generated by the lottery was dramatically lower.

In fiscal year 1997, the Georgia Lottery "transferred 35 percent of lottery revenues to the Lottery for Education Account in the amount of $581 million,” said Tandi Reddick, Communications Director for the Georgia Lottery. “In fiscal year 2018, the Georgia Lottery raised $1.144 billion for HOPE and Pre-K, accounting for 26.2 percent of lottery revenues for fiscal year 2018.”

11Alive asked the Georgia Lottery why the percentages have gone down since the 1990’s. They didn't answer. Instead they issued this statement:

“The marketplace has changed dramatically since 1993, as have customer expectations,” Reddick answered. “During the early years of the Georgia Lottery, the marketplace was dominated by draw games, which yield a higher percentage return than the scratch-off games that are more popular now and have yielded more dollars than ever for education in Georgia.”

If the Georgia Lottery had given the full 35% last year the funds for HOPE Scholarship and Pre-K would be $1.4 billion, instead of the $1.1 billion they actually gave.

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