The purpose of this historical/descriptive study was to determine the status of lottery revenue generation and allocations to education across the United States that had lotteries. More specifically, the study profiled the number of states which used lottery revenue for education during the year 2004, the types of these lotteries, levels of funding accrued, advertised purposes for education-related lotteries, and the distribution of these funds to levels of education.

The population for this study consisted of all of the 42 states that currently hold state lotteries. However, only 24 of these states identified education as a recipient of lottery revenues during 2004. Each state website for its individual lottery was used to identify the states' history of lottery and the revenues collected from lottery sales.

A lottery-based contribution to education has been a divisive and complex subject that invokes many debates regarding policy, morality, and administration. Most states with lottery funds allocated to K-12 education had a positive net gain per capita in real funding. Of the four states with the largest allocations to K-12 education (Illinois, Idaho, Massachusetts, Florida), these states were very similar in their bipartisan nature, not relying on extreme conservative or liberal political groups to support their initiatives. Even as recently at the past decade, there remain states passing legislation for approving lotteries for education.

The challenge of analyzing lottery allocations for education across states in the US is that there is little common standard for data collection and definitions of terms and issues. In every state included in this sample, with the exception of those states that do not fund K-12 but pre pre-K and post-12, the education budget in 2004 was higher than it would have been if the compound annual growth rate (CAGR) of the education budget for the five years prior to the lottery was projected forward to 2004. A study of states with experience in lottery funding for education leaves more questions than answers about its utility as an alternative source of funding. Lottery is at best a mixed blessing for schools.