Kentuckians spend big on lottery jackpots like Mega Millions. Here’s where the money goes

No winner came forward to claim the growing Mega Millions jackpot over the weekend, which means Kentuckians yearning to win $785 million will get another shot Tuesday night.

While Tuesday’s Mega Millions jackpot is reportedly the 6th largest in U.S. history, the odds of winning the game’s top prize are more than a longshot at 302,575,350 to 1 for each play, according to the Kentucky Lottery.

The prize is one of several large, multi-state jackpot games that have caught the eyes of state residents recently. Another, the Powerball jackpot, soared north of $2 billion in November. Its winner, a California lottery player, became the Golden State’s first billionaire by lottery.

The anonymous winner’s odds were 1 in 292.2 million, according to Powerball figures.

From Oct. 29 to Nov. 7, 2022, when the Powerball pot steadily grew to $2.04 billion, Kentuckians spent $22,649,635 on tickets, a Kentucky Lottery spokesperson previously told the Herald-Leader. Most tickets sales during the run were driven by the final two drawings.

Over the years, Kentucky Lottery has raised vast sums for state projects. Roughly $6 billion has been raised since its inception in 1989, and of that amount, more than $4 billion has gone to scholarship programs like the Kentucky Educational Excellence Scholarship (KEES), a merit-based program that rewards good grades in high school with dollars for college.

“I tell our staff what you do every day is to send Kentucky college students to school,” Kentucky Lottery Corp. President and CEO Mary Harville told the Herald-Leader during an interview Dec. 1.

Harville added she’s met with several students and even university presidents over the years who’ve told her about the difference lottery-backed scholarships have made. The purpose of those programs, Harville said, is to “encourage Kentucky’s best and brightest to stay right here in the state” by helping them afford to go to college.

But some critics say state-run lotteries fail to deliver on that key promise: promoting education.

Instead, they contend, lotteries often compound inequalities by disproportionately benefiting college students and wealthier school districts. Low-income and nonwhite neighborhoods in general fund the bulk of lottery ticket sales.

So where does the money from Kentucky’s lottery go? Who’s playing the games? Which lottery games are the most popular these days? Here’s what to know.

Where does Kentucky Lottery revenue go?

Kentucky Lottery officials told the Herald-Leader in early December that over the 96-day Powerball run, sales in the state generated a total of $39.4 million. Of that amount, $16 million went to fund various state scholarship programs, like the Kentucky Educational Excellence Scholarship.

A breakdown of state lottery revenue and what it funds shows for every dollar that comes in, 69 cents goes back to players in the form of cash prizes, incentives and the like. The commonwealth takes a cut of 21 cents to provide funding for college scholarship and grant programs. The remaining 10 cents is split evenly between the retailers and administrators running the lottery.

Here’s a list of Kentucky scholarship programs the state lottery funds:

• Kentucky Educational Excellence Scholarship: For every year a high school student earns a 2.5 or higher grade point average, they get money for college.

• Dual Credit Scholarship Program: High school and homeschool students who take dual-credit courses can get help paying for them through this scholarship program. Eligible students can get up to two of their dual-credit classes paid for.

• Kentucky Tuition Grant: This is a need-based scholarship to help Kentucky residents attend eligible private colleges in the state.

• Kentucky National Guard Tuition Award Program: This covers 100% of in-state tuition for full- or part-time students serving in the Kentucky National Guard. They can use it at any public college in Kentucky.

• Work Ready Scholarship: Students get help paying for tuition to earn career-related certifications for jobs in high-demand sectors.

• College Access Program: These need-based grants help students from low-income households afford tuition at public or private colleges and universities in the state.

Kentucky Lottery Corp.’s operating revenues totaled $1,586,325 for the fiscal year ending June 30, 2021, the latest year for which a financial statement for the agency was available.

The agency’s total direct costs for that year, for expenses such as prize expenses and more, totaled $1,198,147.

Who plays the games?

Critics of state-run lotteries in general argue the organizations extract money from marginalized communities, specifically from low-income and diverse communities, while giving little back.

A recent investigation from Howard Center for Investigative Journalism at the University of Maryland found lottery retailers are disproportionately clustered in lower-income neighborhoods in nearly every state. The most frequent players had lower incomes, were high school dropouts and disproportionately Black.

“Poor people are collateral damage to a cause of raising money for what the legislators feel is good purposes … public safety, local schools,” Gregory W. Sullivan, a former Massachusetts inspector general, now research director for a free-market think tank in Boston, told the AP in a report about the study.

Asked about whether the Kentucky lottery is too reliant on poor people for its funding, Harville described that as a “misconception” and said, “It’s not that demographic that’s playing the lottery.”

“Our average player mirrors the average Kentuckian,” she said.

Harville cited internal survey data of Kentucky Lottery players that found most are playing for the fun and thrill of the game.

Edie Frakes, vice president of marketing at the Kentucky Lottery, said the agency has consistent messaging that urges people to play the game responsibly.

“It’s always about playing responsibly,” Frakes said.

She added the agency shares on its website and promotional materials a gambling hotline, 1-800-GAMBLER, that connects people with counselors and addiction recovery resources.

Which Kentucky Lottery games are the most popular?

Harville said lottery leaders have tried to be responsive to how players want to engage with the game: “We know they want to play on the internet.”

As a result, they’ve built-up the official website and moved to offer more games online, with the option to buy tickets there.

They also know players want the option to buy tickets at a higher price point, Harville said. That’s a big factor in rolling out a new $50 scratch-off ticket, called the “500X - 859,” with the lowest prize being $75 and three $1 million prizes remaining as of Jan. 2.

If you or someone you know has a problem with gambling, help is available at 1-800-522-4700.

Do you have a question about the lottery in Kentucky for our service journalism team We’d like to hear from you. Fill out our Know Your Kentucky form or email ask@herald-leader.com.