By Ryan C. Wood
Howdy humans. Let us discuss the California State Lottery and answer questions like where does all the California Lottery money go? How much revenue is there each month and how is it spent? Who are the winners and losers regarding the California State Lottery? Can we get rid of the California State Lottery at this point? Can the State of California live without a lottery? If no, what does that say? Does playing the lottery lead to filing bankruptcy, lol?
California State Lottery gross revenue is about $550 million a month. As a percentage of gross revenue only about $116 million goes to education on a monthly basis or 21% of the total gross revenue. Is this what you voted for?
For 2020-2021 the State of California lottery had total revenue of approximately $7.120 billion. The California Department of Education estimates $1.5 billion will go to education. During the last 35 years, 1985 – 2020, only about $1.07 billion a year of State of California lottery revenue went to K-12 education. As of 2022, that represents 0.0088% (less than a percent of the total) of the total yearly budget for the State of California for K-12.
For perspective if your gross income is $75,000 a year; 0.0088% equals a paltry $660.00.
For perspective if your gross income is $75,000 a year; 1.24% equals a paltry $930.00.
Now education receives about $1.5 billion from the State of California lottery or 1.24% of the total California education budget.
Gaming costs are about $575 million with pure administrative expenses such as salaries are about $215 million each year. So approximately $800 million goes to operating expenses each year while about $1.5 billion goes to education each year.
If the total revenue was $7.2 billion for 2020-2021 and 87% or $6.264 billion
In 2020 about 66% of gross revenue was paid in the form of prizes/awards to the public.
Who Gets the California State Lottery Money?
Prior to 2010 only 50% of the money brought in by the California State Lottery had to be returned, or redistributed, to the public in the form of winnings/prizes. A law was passed changing the payouts to 87 (of net revenue, not gross) percent to the public in the form of prizes and contributions to education and cap of 13 percent for California Lottery operating expenses.
Prior to 2010 the money was redistributed as follows: 50 percent to public in prizes, 34 percent to public education, and no more than 16 percent to administrative expenses.
So here you go. Below is how lottery revenue was distributed between 1985 and 2020.
Entity Amount Allocated in Millions
Community Colleges $218,861,585
California State University $60,423,474
University of California $42,667,362
Hastings College of the Law $144,161
Department of Education – State Special Schools $116,496
Juvenile Justice $49,381
Department of Developmental Services $41,669
Employees and Offices of the California State Lottery
In 2020 the California Lottery Commission employed 909 humans in nine district offices and two distribution centers.
Distribution to Education 1985 – 2020
K-12 Education received about $30 billion over 35 years. For perspective the State of California budget for 2022 is $119 billion – $124 billion. According to the California Department of Education the total budget for 2021-2022 for K-12 programs is $124.3 billion. Per pupil spending is up from $16,881 in 2020-2021 to $23,089 for 2021-2022. So let us talk about $121 billion and how much money that is and where does it go.
Does Playing California State Lottery Lead to Bankruptcy?
No, I am just joking about this. As a bankruptcy attorney in the Bay Area I regularly encourage my bankruptcy clients to buy one ticket each week or when the jackpots get huge. Hopefully they will crack off a piece of that cheese for me. I cannot ethically treat humans in the requisite way our system requires to obtain/earn/steal millions of dollars. I could never sell my services as a bankruptcy attorney at 10 times the amount other bankruptcy attorneys charge regardless of how superior the services are. This is not true of cellphones. Apple can markup a cellphone to $1,200.00 and we all call it capitalism versus some other manufacturers cellphone selling for $100.00. As an attorney that would be unethical even if the client chose to pay over 10 times more. I, like most humans, will have to have blind luck to get that amount of money and that is where the California State Lottery comes in. Do not fool yourself. The only way to get rich is at the expense of many other human beings one way or another. It is to capitalize.