Florida lawmakers might take money from college students and give it to gas stations

Lobbyists for stores that sell lottery tickets want Florida leaders to pay them more money — at the expense of funding for education programs like Bright Futures scholarships

Photo credit: Adrian Salgado

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The Florida Legislature may give millions of dollars more in public money to gas stations, convenience stores and supermarkets that sell lottery tickets — at the expense of funding for popular education programs like Bright Futures scholarships.

Legislation has been filed ahead of the 2023 session that would force the Florida Lottery to pay retailers a 6 percent commission on every ticket they sell. That would be a 20 percent increase from the 5 percent cut the Lottery has historically given retailers.

It comes one year after lawmakers slipped a provision into a 126-page budget bill late in the 2022 session that forced the Lottery to raise retailer commissions to 5.75 percent for the current fiscal year, which ends in June.

Permanently bumping Lottery commissions to 6 percent would mean a multimillion-dollar windfall for businesses like Publix, 7-Eleven and Circle K, which sell hundreds of millions of dollars’ worth of lottery tickets every year.

But the legislation — HB 715, sponsored by by Rep. Jim Mooney (R-Islamorada), and SB 1488, sponsored by Sen. Ileana Garcia (R-Miami) — would also leave far less money leftover to send to Florida’s “Educational Enhancement Trust Fund,” which is funded with Lottery profits and pays for things like Bright Futures scholarships, smaller class sizes in public schools, and construction projects at state universities.

That’s according to an analysis the Lottery sent to the Legislature during last year’s session, which turned up in a recent public-records request. The Lottery explicitly warned that giving more money to retailers would mean spending less money on education.

“Retailer commissions are funded by sales, so any increase in commissions would have an impact to EETF,” a Florida Lottery accountant wrote in an email to a Senate staffer.

The Lottery also provided the Legislature with calculations showing that raising retailer commissions from 5 percent per ticket to 6 percent per ticket could cut transfers to the state’s education trust fund by an average of $84 million per year. The analysis was based on five years of recent sales data and near-term sales projections.

That’s roughly the equivalent of 15,000 Bright Futures scholarships.

The temporary commission increase that lawmakers tucked into last year’s budget wasn’t quite as generous. That legislation forced the Lottery to pay retailers to 5.75 percent per ticket, but it also eliminated a 1 percent cashing bonus the Lottery typically pays to retailers when they pay out small-dollar winning tickets to customers.

The Florida Lottery has repeatedly declined to publicly share any estimated impact from last year’s legislation. But I estimated the change would have made retailers an extra $19.6 million in the previous year, based on an analysis of Lottery commission data. Publix alone would have made an extra $2 million.

Records obtained in a separate request show that the push to raise commissions came from lobbyists representing the Florida Petroleum Marketers Association, a lobbying group for gas stations, and Sunshine Gasoline Distributors, a Miami company that owns around 400 gas stations and is run by a prominent Republican donor.

Campaign-finance records show Sunshine and its affiliated companies have donated more than $300,000 to Florida politicians and political groups in just the past year, including more than $60,000 to the Republican Party of Florida. Sunshine also owns a pair of jets and has provided more than $14,000 worth of free transportation to Gov. Ron DeSantis, who appointed Sunshine’s president to the Florida State University Board of Trustees.

Separate records show that DeSantis staffers worked with lobbyists for Sunshine and other gas stations to weaken a statewide gas-tax holiday held last October, by eliminating any threat of criminal penalties for gas stations who failed to pass tax savings on to drivers.

Industry lobbyists say Florida should pay stores more to sell lottery tickets because their own operating expenses have climbed over the years without any corresponding bump from the state. They also say lotteries in some other states pay more generous commissions.

But the entire point of a commission is to incentivize someone to sell something — and there’s little evidence that the Florida Lottery needs to do more incentivizing. Lottery sales have soared by more than two-thirds over the past eight years, from less than $5.6 billion in 2015 to more than $9.3 billion last year.  

And then, of course, there’s the question about whether Florida — or any other state — should be selling a product that preys on low-income communities and serves as a massive upwards redistribution of wealth.

Just one example: A few years ago, the Legislature’s own auditors conducted a deep demographic analysis of the Florida Lottery’s customer base.

The study — by an agency known as the Office of Program Policy Analysis and Government Accountability — found that Floridians living in the state’s most poverty-stricken communities spent 21 percent more than average on lottery tickets.

Floridians living in the state’s wealthiest communities spent 21 percent less than average on lottery tickets.

Here’s an off-the-wall idea: Maybe instead of paying gas stations more money to peddle this stuff, Florida policymakers could stop selling it entirely and find a more equitable way to fund public education?