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Michigan Lottery Contributes Record $644.5 Million to School Aid Fund

Oct 19, 2004, 11:11 am

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Michigan Lottery

Governor Jennifer M. Granholm and Michigan Bureau of State Lottery Commissioner Gary Peters today announced that the School Aid Fund will receive a record $644.5 million from the Michigan Lottery with its fiscal year 2004 net proceeds.

Peters presented Granholm with a ceremonial check at a press conference in Lansing.

"The Michigan Lottery plays a critical role in supporting our education system and our children," said Granholm.

"The citizens of Michigan authorized the Lottery as a way to fund education. In these tough economic times, we rely even more on the revenue it provides our schools. The Lottery's contribution helps us move Michigan forward and helps us grow the School Aid Fund, so that we can better educate our children and get them ready for new, high-tech jobs."

The Lottery's contribution is expected to fund 5.2 percent of the $12.4 billion total School Aid budget. 100 percent of lottery net profits go to Michigan schools.

The $644.5 million contribution surpassed the previous record contribution of $621.1 million in 1999. The boost is credited in large part to the highly successful launch of Club Keno into Michigan bars and restaurants in late October, 2003.

"Club Keno brought in $204 million in totals sales in its first year, resulting in $57 million for education. That is the most successful launch for a Lottery game ever and it enabled us to contribute a record amount of money to the state School Aid Fund," Peters said.

The $644.5 million school aid contribution equals 33 percent of the Lottery's overall $1.97 billion FY 2004 revenue and represents the net proceeds from all Lottery games. The balance of the revenue was used for prizes ($1.1 billion, 55 percent); retailer commissions ($145.3 million, 7 percent); operating expenses ($33.7 million, 2 percent), and direct game expenses ($54.1 million, 3 percent).

The Michigan Lottery was created in 1972 through a constitutional amendment. Net proceeds went into the state's general fund budget, and in 1981, language earmarking the money to go specifically to the state School Aid Fund was adopted by the Legislature and signed into law by then-Gov. William Milliken.

In its 32 year history, and including the $644.5 million for FY 2004, the Lottery has contributed $12.1 billion to education in Michigan.

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