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Gross lottery sales rose from $4.3 billion (FY 2023) to $6.6 billion (FY 2025), while the share of proceeds transferred fell from 23% to 16%. The Office of the State Auditor attributes the decline primarily to growth in digital instant games with higher prize payout rates, alongside reduced sales in traditional draw games and scratch-off tickets, which leaves fewer proceeds for transfer.",{"@graph":63,"@context":119},[64,80,102],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":51,"@type":70,"position":76},"https://docshare.wps.com/template/general/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/north-carolina-education-lottery-performance-audit-report-september-2026/565143/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/north-carolina-education-lottery-performance-audit-report-september-2026/565143.png","ImageObject",442,249,{"name":88,"@type":89},"Anna Hans","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-10-23","2026-10-12",true,{"@type":98,"interactionType":99,"userInteractionCount":101},"InteractionCounter",{"@type":100},"ViewAction",10,{"@type":103,"mainEntity":104},"FAQPage",[105,111,115],{"name":106,"@type":107,"acceptedAnswer":108},"Why did lottery sales increase while the transferred percentage declined?","Question",{"text":109,"@type":110},"Changes in lottery game types and their prize payout rates drove the decline. Sales shifted toward higher-payout products, especially digital instant games, reducing the portion available for transfer to the Education Fund.","Answer",{"name":112,"@type":107,"acceptedAnswer":113},"How did digital instant games affect transfers to the Education Fund?",{"text":114,"@type":110},"Digital instant games grew rapidly and were designed with an approximately 87% prize payout rate. Because more of each sales dollar is paid as prizes, less revenue remains for transfer compared with traditional draw games or scratch-off tickets.",{"name":116,"@type":107,"acceptedAnswer":117},"What did auditors recommend regarding North Carolina lottery objectives?",{"text":118,"@type":110},"Auditors recommended that the NCEL work with the General Assembly to clarify the primary strategic objective. 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Examination of recent financial statements found that while lottery sales have been increasing significantly, the percentage of lottery proceeds transferred to North Carolina’s Education Lottery Fund has fallen sharply.  \nFrom FY 2023 to FY 2025, the NCEL reported gross sales increased from $4.3 billion to $6.6 billion. However, the percentage of sales transferred to the Education Fund fell from 23% in FY 2023 to 16% in FY 2025. The total dollars transferred to the Education Fund increased from $1.02 billion in FY 2023 to $1.09 billion in FY 2024, but then declined to $1.08 billion in FY 2025.  \nOSA conducted a performance audit to examine the factors that led to the above figures. The primary drivers are substantive growth in digital instant games, declining sales of traditional lottery games, and expansion of higher-payout lottery products. Total prize payouts increased from approximately 66% of sales in FY 2023 to approximately 76% of sales in FY 2025, resulting in a reduced percentage of sales available for transfer to the Education Fund.  \nThe introduction of digital instant games is new to North Carolina, and as shown in the audit, it has already had tremendous impact on the operations and finances of the Education Lottery. Digital instant games are designed to have a payout rate of approximately 87% . They have gone from generating zero dollars in sales in FY 2023, to $2.60 billion in sales in FY 2025, which represented approximately 40% of total lottery sales that fiscal year. Over the same time period, draw games and scratch-off tickets – which have lower prize payout percentages – both saw a decrease in sales.  \nState laws guiding and regulating the Education Lottery were not initially designed with digital instant games in mind. As a result of the findings, auditors recommend that the NCEL work with the General Assembly to clarify North Carolina’s primary strategic objective for the Education Lottery. Specifically, a strategic decision is required to determine whether the NCEL’s primary objective is to maximize total dollars transferred to the Education Fund, maintain a specified minimum percentage to transfer to the Education Fund, or balance both objectives through clearly defined policy framework.  \n20601 Mail Service Center | Raleigh, [NC 27699 | 919-](NC 27699 | 919-432-4050 | www.auditor.nc.gov)[432](NC 27699 | 919-432-4050 | www.auditor.nc.gov)[-](NC 27699 | 919-432-4050 | www.auditor.nc.gov)[405](NC 27699 | 919-432-4050 | www.auditor.nc.gov)[0 | www.auditor.nc.gov](NC 27699 | 919-432-4050 | www.auditor.nc.gov)  \nNorth Carolina Education Lottery leadership has committed to reviewing this audit with the NCEL Commission and meeting with General Assembly leadership on possible legislative changes.  \nRespectfully submitted,  \nDave Boliek  \nState Auditor  \n20601 Mail Service Center | Raleigh, [NC 27699 | 919-](NC 27699 | 919-432-4050 | www.auditor.nc.gov)[432](NC 27699 | 919-432-4050 | www.auditor.nc.gov)[-](NC 27699 | 919-432-4050 | www.auditor.nc.gov)[405](NC 27699 | 919-432-4050 | www.auditor.nc.gov)[0 | www.auditor.nc.gov](NC 27699 | 919-432-4050 | www.auditor.nc.gov)  \nExecutive Summary  \nBetween fiscal year (FY) 2023 and FY 2025, the North Carolina Education Lottery’s (NCEL) report","cbCaiiAqHm8M6k49","https://ap.wps.com/l/cbCaiiAqHm8M6k49","pdf",13872422,"English","# Executive Summary\n## Key Findings\n## Recommended Actions","[{\"question\":\"Why did lottery sales increase while the transferred percentage declined?\",\"answer\":\"Changes in lottery game types and their prize payout rates drove the decline. Sales shifted toward higher-payout products, especially digital instant games, reducing the portion available for transfer to the Education Fund.\"},{\"question\":\"How did digital instant games affect transfers to the Education Fund?\",\"answer\":\"Digital instant games grew rapidly and were designed with an approximately 87% prize payout rate. Because more of each sales dollar is paid as prizes, less revenue remains for transfer compared with traditional draw games or scratch-off tickets.\"},{\"question\":\"What did auditors recommend regarding North Carolina lottery objectives?\",\"answer\":\"Auditors recommended that the NCEL work with the General Assembly to clarify the primary strategic objective. The framework should determine whether to maximize total transfers, maintain a minimum transfer percentage, or balance both objectives through defined policy.\"}]","North Carolina Education Lottery - Performance Audit Report - September 2026 | PDF",1791847026,37]