You ask, we answer: Does the extra money from the Wisconsin Lottery go to schools?

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27-01-2025

Milwaukee resident Laura Vanderbilt has often heard that the Wisconsin Lottery was created to fund local education. With schools facing funding shortages in Milwaukee and across the state, she asked Public Investigator if it's true that school districts receive lottery dollars.
In fact, Wisconsin schools do not receive any benefit from the state lottery. Instead, net lottery proceeds actually fund local property tax relief, said State Lottery Director Cindy Polzin.
That's been the rule since lottery tickets first went on sale in Wisconsin in 1988.
Polzin said people may confuse Wisconsin's system with other states that do dedicate gambling funds to education. Nationwide, 24% of lottery revenue goes to various local causes like education and the environment, according to the North American Association of State and Provincial Lotteries.
When Public Investigator told Vanderbilt where the funds actually go, she said she was disappointed but not surprised.
"As someone that works at a public school in Milwaukee and sees all of the ways in which Milwaukee is underfunded right now, it would sure go a long way toward helping our district now to see some of that cash, too," Vanderbilt said.
It wasn't easy to legalize the lottery in an anti-gambling state. But after numerous attempts dating back to 1939, voters finally approved an amendment to allow the state lottery, with the promise that all net proceeds would go to property tax relief, the Milwaukee Sentinel reported in 1987.
Here's more information about how lottery funds are distributed in Wisconsin and how eligible residents can make sure they benefit.
State statutes dictate how lottery revenue is disbursed in Wisconsin. For example, at least 50% of each year's total revenue must be dedicated to prize money.
Retailers that sell lottery tickets earn a 5.5% commission of the retail price for lotto tickets, according to state law, and 6.25% for instant tickets.
No more than 10% of the revenue can go toward operational and administrative expenses, such as employee salaries, unless the state legislature's Joint Finance Committee makes an exception.
All money left after expenses must be used exclusively for property tax relief.
The Wisconsin Lottery saw record high overall ticket sales of $981.7 million in 2023, its most recent financial report shows. About a third of that — or $319.7 million — went to property tax relief.
According to the Wisconsin Department of Revenue, you must be a Wisconsin resident who uses their property as their primary residence to be eligible for the Lottery and Gaming Credit Program.
Property owners can only claim one primary residence, which cannot include business property, rental units or vacant land, state law says.
Polzin said 1.5 million property owners received the lottery and gaming credit in 2023.
Polzin told Public Investigator the estimated average lottery and gaming credit on property tax bills issued in December 2024 is $213.
The amount of funds available for the lottery and gaming credit is determined each November. If lottery sales exceed the forecasted amount of funds available for the credit, those proceeds roll into the next fiscal year, Polzin said.
To calculate how much each homeowner receives, the Department of Revenue calculates a "maximum credit value" based on available funds and the number of qualifying properties. Then, the department multiplies the maximum credit value (or the property's value, whichever is lower) by the local school tax rate.
Eligible property owners must submit an application to receive the lottery and gaming credit by Jan. 31. The application is available on the Department of Revenue's online portal. If you miss the Jan. 31 deadline, you can also file a late claim application.
However, it's possible that you're already receiving the credit.
Once a property owner secures the tax credit, it carries over year after year, and stays with the property even after it is sold.
Prior to 1999, the lottery credit automatically appeared on tax bills because it was given to all property owners in the state, including out-of-state owners and businesses.
But that year, voters amended the state constitution to restrict lottery profits to only Wisconsin residents.
Since then, homeowners have been required to fill out a form to verify that their property is their primary residence.
No.
In 1999, after voters decided to restrict the tax credit to Wisconsin residents, state lawmakers met to decide how to divide the proceeds, including whether to share it with renters.
The Joint Finance Committee ultimately decided to deny the lottery credit to renters. The Milwaukee Journal Sentinel reported that angered Milwaukee-area legislators at the time.
"Renters have a stake in good, solid neighborhoods, also," state Rep. Antonio Riley, D-Milwaukee, told the newspaper. Many renters, especially in Milwaukee, "buy lottery tickets like crazy," he added.
Quinn Clark is a Public Investigator reporter. She can be emailed at [e-mail]. Follow her on Twitter at @Quinn_A_Clark.
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This article originally appeared on Milwaukee Journal Sentinel: Did you know? Proceeds from the Wisconsin Lottery go to property taxes