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Ask 2: Where does Texas Lottery money go?

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At KPRC 2, we’re dedicated to keeping Houstonians informed. As part of our new Ask 2 series, the newsroom will answer your questions about all things Houston.

The question: Where does the money from the Texas lottery go?

On Nov. 5, 1991, Texas voters approved an amendment to the Texas Constitution authorizing lotto sales in the Lone Star State and just six months later, on May 29, 1992, then Governor Ann Richards purchased the first Texas Lottery scratch-off ticket. Since then, the state's government-operated lottery has generated billions in revenue (Cue “The Apprentice” theme song).

So, just what does the state do with that aforementioned revenue? Where does all the money go?

Here’s a breakdown of where the money generated by the Texas Lottery actually goes, according to a report from the Texas Lottery Commission:

  • 65.1 percent is paid to lottery winners
  • 25.5 percent goes toward Texas education through the Foundation School Fund
  • 5.4 percent goes toward compensating retailers
  • 3.7 percent goes to the lottery administration
  • 0.3 percent funds the Veterans Assistance Program and other state programs

In summary, public education is the lotto’s biggest beneficiary besides lottery winners themselves. Since 1997, the Texas Lottery has contributed some $24.4 billion to the Foundation School Fund, which supports public education in Texas, according to the Texas Lottery Commission's website. In fiscal year 2019 alone, the lottery generated about $1.617 billion for the Foundation School Fund.

Beginning in 2009, at the behest of Texas legislators, the state’s veterans also began receiving a cut of the profits generated by the lottery. Since then, the Texas Lottery has contributed more than $125 million for veterans through the Fund for Veterans' Assistance.

From 1992 to 1997, proceeds from the lottery were allocated to the state’s general revenue fund, meaning the money could fund any state program or initiative.

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