Raleigh, N.C. — Faced with legislation that would slash administrative and advertising spending, the North Carolina Education Lottery on Tuesday released the results of an outside audit that finds the state-run game is well run.
State law requires the performance audit every two years, and Wisconsin-based Delehanty Consulting LLC found that the lottery is one of only three nationwide to increase its profits every year since 2007.
“The NCEL’s ongoing performance has been exceptional,” the audit states.
Auditors said limits on advertising reduces the lottery’s ability to generate money for schools, noting that $1 invested in lottery advertising in North Carolina generates $31.70 in profits for education.
“Given the NCEL’s return on advertising investment, the advertising limit of one-percent of sales is likely reducing the profits available for education,” auditors wrote. “Although falling sales would motivate most companies to increase advertising, the NCEL would have to decrease advertising if sales begin to fall. This could exacerbate the decrease in profits available for education.”
House Bill 339 would cut advertising to 0.5 percent of revenue and administrative costs from 8 percent to 4 percent.