This document presents data on the effects that lotteries have on elementary and secondary education funding in those states where at least a portion of the lottery proceeds are specifically designated for the support of public education. The data were obtained from the annual reports of lotteries in states where lottery revenue is designated for education. Findings indicate that lotteries contribute only a small part of overall revenue; lottery revenues are often substituted for regular funds; the revenues are unstable; the administrative expense if high; and lottery acts like a regressive tax. Researchers also tend to blame politicians for many of the negative financial consequences of lotteries, and for failing to provide more adequate forms of funding for educational purposes. In summary, lotteries have, at best, proven a controversial source of education funding. To adequately benefit public education, several policy modifications and more public education are needed. Six figures are included. (Contains 34 references.) (LMI)