In 1987 Virginia voters approved the establishment of a government-run lottery. At the time of its establishment the Virginia state lottery did not designate where the lottery funds would go. The First Virginia lottery sales began on September 20, 1988, one year later the Virginia GEneral Assembly dierected the lottery proceeds to capital construction projects. In 1999 a provision to the state budget was introduced that would direct lottery proceeds to local public school divisions to be used for the educational purposes.

The State Lottery Proceeds Fund was created in November 2000 by a 83.5% approval vote from Virginia voters. The State Lottery Proceeds Fund is part of the Virginia Constitution and directs all profits to educational purposes. From its inception until 2009 the Virginia lottery has sold $21.1 billion in wages, of that $7.1 billion has gone towards support of education or other purposes in Virginia.