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The Missouri Lottery: False Advertising?

The Missouri Lottery, which exists in large part to fund public schools, is under public scrutiny.

 

The Lottery saw a 1.5 percent increase in gross revenue last year, while its contributions to public education were down 7.4. This hasn’t stopped the Lottery from spending advertising dollars telling the public about its contributions to public education. (source)

Over the last ten years (FY04-FY13), the Missouri Lottery has ranked as one of the best in the country for overall lottery payout percentages, and for payout percentages for its instant games and draw games.

In fact, prize payouts increased by 5.4 percent over that ten-year span, and in 2014 Missouri’s payouts were 66 percent of its revenues (compared to a 60 percent national average). (source)

Concerned with these trends, Governor Nixon required in July that the Office of Administration (OA) conduct a comprehensive review of “the Missouri Lottery’s ability to carry out its voter-approved mandate to provide a stable funding source for public schools”.

In September, the OA, Division of Budget and Planning published its report. The “Review of Missouri Lottery Operations” provided a “comprehensive review”, exploring finance lottery trends using data from all 44 states that have lotteries, and going back ten years.

The report covered prize payouts, retailers & contractors, advertising & promotions, and administrative costs.

The Lottery’s advertising expenditures raised eyebrows not just because its spending is so high, but because it has doubled since 20008 and increased six-fold since 2014.

According to the report,

“The recent increase in the advertising budget was driven by input from MO Lottery that such an increase would result in higher funding for education. Based on actual transfers to education, it is unclear if this was actually the case.” (source)

Advertising isn’t the only aspect of the Missouri Lottery that has come under scrutiny; it’s leadership has, as well. In September, Governor Nixon removed the four existing Lottery Commissioners, replacing them and adding a fifth. Four of the five new commissioners are prominent educators.

Nixon and the new commissioners approved a continued $16 million advertising budget for the Lottery for FY 2016, but added a caveat: that they are to do a “thorough review of the efficacy of the advertising” before the Lottery exceeds $12 million in advertising spending. (source)

As the new lottery commissioners settle into their roles, the OA report, the Governor’s opinions, and the new commissioners’ respective backgrounds in public education will influence Lottery spending and accountability. The commission plans to hold the Lottery responsible for its mandate to support schools, but only time—and dollars—will tell how the Lottery will influence education in the future.

Missouri Parent will continue to share information with you on how the Missouri Lottery Commission and its public mandate to support public schools is affected by the recent OA report. You can read the full Lottery report here.

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