Oklahoma House passes bill to remove ‘profit’ requirement from lottery

OKLAHOMA CITY – Oklahoma lawmakers are hoping the lottery may help solve some of the state’s budget issues regarding public education.

The Oklahoma House of Representatives passed House Bill 1837, which they say could increase the Oklahoma Lottery’s contribution to education by $110 million over the next five years.

“A $110 million increase to education in a tough budget year without a tax increase is no small feat, and it is one of many steps necessary to meeting our commitment to education,” said Rep. Leslie Osborn.

Supporters say the bill would send more lottery revenue to education by letting the lottery increase payouts. Lawmakers believe the higher lottery payouts would encourage more Oklahomans to play the lottery, which would bring in more money to the education fund.

When the lottery first came to Oklahoma, many believed it would help fund education across the state.

“What you hear a lot around here is that the lottery never lived up to those promises,”  Rollo Redburn, the executive director of the Oklahoma Lottery Commission, told KFOR in Jan. 2015.

Redburn said the lottery is bringing in $200 million a year and giving 35 percent of that to education, or $70 million on average.

Since its inception in 2005, the lottery has sent more than $750 million to public education.

Redburn says the other 65 percent of the earnings go back into the lottery to keep the program running and for the prize payouts that go to lottery winners.

The Oklahoma Lottery has a profit requirement that was set by voters, which requires 35 percent of every sale go toward the Oklahoma Education Lottery Trust Fund. Lottery officials say the requirement hurts overall sales of lottery tickets because it reduces prize money, and in turn, hurts the amount of money going toward education.

Officials say lottery ticket sales have dropped, which means that lottery contributions to education are expected to be 30 percent lower next year than 10 years ago.

House Bill 1837 would do away with that profit requirement. Instead, it would put in place a guarantee, marking at least $50 million in lottery revenue for education every year. The bill would also send profits above $50 million to specific K-12 public school initiatives.

However, it does nothing to prevent potential budget cuts in the future.

Last year, lottery funding for education was $66.4 million.

The money that is given to education is split up between several different funds, and budget cuts recently have made the profits disappear.

For example, the $31.4 million for the K-12 school funding formula accounted for only 1.7 percent of the formula in 2014. When the agency is forced to undergo across-the-board cuts, those extra funds are absorbed into the cuts.

Last month, the Oklahoma State Board of Education revised the common education budget to reflect $50.2 million in cuts following the announcement of a revenue failure. The state is currently facing an almost $900 million budget shortfall.

The bill now heads to the Senate for consideration.