The state lottery on Thursday made its first payment toward education programs in North Carolina amid signs the games are bringing in less cash than hoped.

Lottery officials transferred to the state $95 million, money made off players who have scratched instant tickets and played the Powerball jackpot game since the lottery began in March. The lottery is expected to make more transfers every three months.

The millions will be split among a number of programs as required by the law creating the lottery last year. Half will go to the state's More at Four pre-kindergarten program and to hire teachers and cut class sizes. The rest will help build schools and pay college bills for the needy.

Most of Thursday's first transfer was based on proceeds from statewide lottery sales in July, August and September of $233 million. The bulk of those sales went back to players in the form of prizes.

The sales figure is below two separate forecasts, one by lottery officials and another used by legislators and Gov. Mike Easley. As a result, the lottery transferred to the state at least $17 million less than what had been projected.

Lottery officials are continuing to roll out new games -- a state-run daily pick 5 jackpot game begins next week, for example -- and they say they are not concerned about sales. A daily pick 3 game also just got started this month.

"We are extremely pleased with how sales have been going," lottery director Tom Shaheen said in a statement. "As we add more games, we expect sales to continue to grow and that is just more good news for education."

Earlier this year, Shaheen made a month-by-month projection for lottery commissioners. In it, he accounted for seasonal sales of the instant ticket games, which are the bread-and-butter of the lottery. He did not do the same for the numbers drawing games, such as Powerball, and officials say that might be a reason sales for now are below the forecast.

"We didn't have the Pick 3 or Cash 5 in this period, and we've always anticipated that this first quarter would be the slowest time of the year," lottery spokeswoman Pam Walker said. "The second and third quarters should be better."

The first-quarter sales were about $50 million below the forecast Shaheen made for those months. Moreover, Easley and legislators expect the games to bring in more than what lottery officials say they will. The state budget is based on the more aggressive target of returning $425 million to education.

The lottery says it will bring in about $400 million annually for education.

Easley's office has said any shortfall would be covered by dipping into a $50 million reserve created from the first months of lottery sales. The lottery used $12 million left over from creating that reserve to help make Thursday's payment.

Easley and Shaheen said Thursday the first transfer was an important milestone because the games, after years of debate before its start and almost seven months of play, have finally returned cash to education.

The transfer is "a sign of some very positive things to come for our young people," Shaheen said.

In a statement, Easley said, "Money from the lottery assures education progress is paid for now and in the future."

Some schools officials have grumbled about how the money will be distributed, especially for school construction. Wake County and Mecklenburg County have about the same number of students, for example, but Wake will get about half what Mecklenburg does for new schools. The reason is that the distribution takes into account a county's effective tax rate.

Sen. Tony Rand, a Fayetteville Democrat, came up with the formula. He said Thursday he's heard the concerns and expects lawmakers to take a look at it next year.

But for now, he said, he's glad the lottery is finally giving money to education.

"For that," he said, "I say, 'Praise the lord.'"

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