Where the Money Goes

Since the Kansas Lottery's start up in November 1987, through June 30, 2010, Lottery ticket sales have produced more than $1.19 billion in revenues transferred to the State of Kansas.

The Lottery's Fiscal Year 2010, which ended June 30, 2010, produced $235.4 million in sales and $69 million transferred to the state.

The Kansas Lottery Act requires that a minimum of 45 percent of total sales be paid back to the players through the prize fund. In fiscal year 2010 (July 1, 2009 through June 30, 2010), the Kansas Lottery paid out 56 percent in prizes. The State Gaming Revenues Fund received 29 percent of ticket sales; cost of sales was 4 percent (which covers online vendor fees, telecommunications costs and instant ticket printing); 6 percent was paid to Lottery retailers for commissions and bonuses; and 5 percent covered administrative expenses (salaries, advertising, depreciation, professional services and other administrative expenses.)

How are Kansas Lottery Proceeds Distributed?

The State Gaming Revenues Fund (SGRF) is funded through monthly transfers from the Kansas Lottery. Transfers are then made from the Gaming Fund to funds dedicated to economic development initiatives, prison construction and maintenance projects, local juvenile detention facilities, problem gambling assistance, and the State General Fund.

The first $50 million is divided by a formula which first transfers $80,000 to the Problem Gambling and Addictions Grant Fund. Then 85 percent of the balance is transferred to the Economic Development Initiatives Fund, 10 percent to the Correctional Institutions Building Fund, and 5 percent to the Juvenile Detention Facilities Fund. Any receipts in excess of $50 million must be transferred to the State General Fund.

Economic Development Initiatives Fund
Fiscal Year 2012 Recommendations

The primary recipients of monies from the Economic Development Initiatives Fund (EDIF) in Fiscal Year 2012 (July 1, 2011 through June 30, 2012) will be the Kansas Department of Commerce, the state's aviation sector through grants to Wichita State University, and the Kansas Board of Regents. In addition to the EDIF appropriation to Commerce, the agency will also receive EDIF transfers of $5,000,000 for the State Affordable Airfare Fund and $1,250,000 for the Kansas Economic Opportunity Initiatives Fund (KEOIF).

The recommendations for FY 2012 are described in detail by agency and by program below:

KANSAS DEPARTMENT OF ADMINISTRATION

Governor's Economic Council. The council replaces Kansas, Inc. as the lead agency responsible for economic development policy research, program evaluation and strategic planning.

KANSAS DEPARTMENT OF COMMERCE

Operating Grant. The operating grant from the EDIF supports Commerce's traditional programs, including the Kansas Industrial Training and Retraining programs in its Workforce Services Division and financing the business recruitment efforts of the Business Development Division.

Older Kansans Employment Program. This program is designed to provide Kansans 55 and over with an employment placement service. The emphasis is on providing permanent full-time or part-time jobs in the private sector.

Senior Community Service Employment Program. This program provides skill training through subsidized part-time employment for Kansans aged 55 and older who are at or below the poverty line.

Strong Military Bases Program. This program supports ongoing efforts of the Governor's Military Council to prevent the closure or downsizing of the state's military bases, which play an important role in the state's economy.

Rural Opportunity Zones Program. This program helps attract financial investment, business development and job growth in rural areas of the state, in part through offering a new student loan forgiveness program. The program also administers the Governor's new Rural Opportunity Zone Tax Credit Program.

Small Technology Pilot Program. This program will help target and recruit small technology-based companies to Kansas. The pilot program will be operated with the support of Kansas State University, the University of Kansas, the City of Manhattan, City of Lawrence and local chambers of commerce.

Community College Competitive Grants. This grant program will require a local match and will develop innovative programs with private companies needing specific job skills or to meet other industry needs that cannot be addressed with current funding streams.

Engineering Expansion Grants. This program will provide Kansas a pool of engineers, a need that many industries cannot meet with the current levels of graduating students.

Centers of Excellence. The Centers of Excellence are university-based research centers, each with a different technology specialization, that conduct innovative research and provide technical assistance to Kansas businesses.

Entrepreneurial Centers. The entrepreneurial centers provide business development and financing to start-up technology-based businesses in Kansas and develop technology research into a commercial product, assisting with the steps required to develop the business.

Mid-America Manufacturing Technology Center. The Center provides business assistance in improving manufacturers' technical capabilities. Companies will be made more competitive through the adoption of advances in technological processes.

BOARD OF REGENTS

Vocational Education Capital Outlay. Grants are distributed to community colleges and the vocational and technical institutions to purchase equipment for training purposes. A 50 percent match from the institution is required.

Technology Innovation & Internship. The grants go to community colleges and vocational/technical institutions so that instructors may intern for short periods in private industry, keeping their skills up to date. The grants also fund innovative equipment for student training.

EPSCoR Program. The EPSCoR program combines federal and state dollars for research in science and engineering at the universities.

KANSAS STATE UNIVERSITY

Extension System and Agriculture Research Program's Cooperative Extension Program. This funding is used for support of the program's general operations.

WICHITA STATE UNIVERSITY

Aviation Training & Equipment. The state is a partner with Wichita aviation companies, the City of Wichita and Sedgwick County in the development of the National Center for Aviation Training. The Center trains thousands for high paying jobs in the aviation industry. State funding is administered by Wichita State University to provide equipment and assistance fitting with the program's curriculum.

DEPARTMENT OF AGRICULTURE

Agriculture Marketing Program. This program promotes the development of value-added agricultural products, and advances agricultural-based economic and rural development.

DEPARTMENT OF WILDLIFE & PARKS

Travel & Tourism Development. The Governor recommends transferring the Travel & Tourism Development Division from the Department of Commerce to the Department of Wildlife & Parks in FY 2012. Reorganizing this program will allow it to combine with efforts already underway in the agency to promote Kansas as an outdoor destination. Travel & Tourism is also responsible for the general promotion of Kansas, administration of travel information centers and the publication of Kansas! magazine.

Kansas Lottery Veterans Benefit Tickets

Legislation passed by 2003 Legislature authorizes net profits from Veterans Games to go directly to designated veterans programs.  Every penny of the money is used here in Kansas and goes to provide basic things for our Kansas military veterans.

All net profits received from the sale of Kansas Lottery Veterans Benefit Games are deposited into the state treasury and are then directed to three special funds: 

• 40 percent for National Guard educational assistance act scholarships
  
• 30 percent to the veterans home fee fund to be used for the Kansas veterans home and the state veterans cemetery system
  
• 30 percent to the veterans enhanced service delivery program

Initially, Veterans Benefit Games were sold only from May through November each year.  A change in the legislation authorized the Lottery to sell the games year round, starting in May 2008.  Fiscal Year 2009 was the first year that included year round sales.

How does the Kansas Lottery transfer revenue from Veterans games?

Net profits from the sale of Kansas Lottery Veterans games are transferred to the state treasury once a year on June 15. The transfer is made at the same time as the Lottery makes its monthly transfer to the State Gaming Revenues Fund.  From the state treasury, the Veterans Benefit funds are distributed directly to the designated programs, according to the percentages in the legislation.

How Much Money Has the Lottery Transferred from Veterans Games?

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Source: Some information in this report was taken from the Governor's Budget Report, State of Kansas, Fiscal Year 2012.

If you have questions or need additional information, please call the Director of Communications at the Kansas Lottery at 1-785-296-5708.

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