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Lottery Proceeds Fail To Reach State Mandate

Posted December 22, 2006

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— The North Carolina lottery received a clean bill of health from the state auditor this week, but it fell short of its goal required by law.

The North Carolina lottery launched with just three months to go in the fiscal year that ended June 30. According to the state audit released this week, total revenues totaled more than $231.8 million.

More than $63.5 million of that revenue or 27 percent was directed for educational purposes. The General Statute calls for at least 35 percent of total annual revenues go to education.

Nearly $119 million, or 51 percent of revenues, was paid for lottery prizes. Free tickets given out as prizes cost another $14 million, or 6 percent of revenue.

As for operating expenses, the lottery spent about $19 million, or 8 percent of the total pie. Retailer commissions and advertising accounted for another 7 percent and 1 percent, respectively.

Lottery director Tom Shaheen attributed the shortfall in education funding to the hefty cost of getting the lottery started but said he is determined to meet the 35 percent target by the end of the state's 2007 fiscal year in June.

"We had huge expenses that normal businesses wouldn't have all at one time," Shaheen said. "It is our goal to hit that 35 percent by the end of the (fiscal) year."

In the first three months of fiscal 2007, the lottery turned over 35.6 percent of its revenues to state schools, he said.

Shaheen also defended the practice of awarding bonuses to lottery executives, saying that compensation helped get the lottery launched in March and allowed state schools to receive $63.5 million by the end of June.

"If we wouldn't have brought in experienced people who were uprooted on short notice to come here to start this lottery, it wouldn't have been started by March 30. It would probably have been June 30," he said.
32 Comments

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  • emory24 Jan 3, 2007

    More winners would generate more funds....ask California.

  • spiderbite54 Dec 31, 2006

    people complain about the people in raleigh who make the laws and lottery,but you send the same ones back year after year,go figure they one out

  • narck9 Dec 30, 2006

    Is it me or does anyone hate the lottery b/c it stops up the lines at the gas station? I spent almost 10 minutes waiting on a lady to scratch off one of her stupid tickets. Hello, us working people need to pay for our gas. Scratch somewhere else!

  • tell.the.truth.and.run Dec 29, 2006

    I can see one of the reasons that lottery income has fallen short of expectations. You can't buy even the scratch-offs with a Visa check card. This is a bit short-sighted on their part, considering that the population they would like to see buying them (middle class) by and large doesn't carry cash anymore. The poor, which some are afraid will be 'victimized' by the lottery, usually DO deal in cash. Backward, backward, backward. Even if they don't wish to allow -credit- card purchases, at least let us use our cards debit-style, with the PIN, to buy. I have yet to buy any, simply because I never carry cash. Come on folks, even McDonald's had to start accepting cards!

  • erstamey Dec 29, 2006

    for all of you people that moan and groan about the lottery .lets talk about free schooling we have for all the foreigners in this country getting free and then they use it against us .
    and yes our govement is not being true with us
    gas taxes sales taxes paying a high pay for looking after the lottery
    and for big old fat people to run OUR goverment .
    and yes we all have a lot to be thankful for
    like being able to say what we want and just to think our for fathers fought for us to say what we want to
    im not rich by money but gods love and we need to stop and think about things we say and as for the old fat people that is running our govement we voted them in there every thing has good and bad in them so lets starte with our selves and thats all I have to say about this

  • hollylama Dec 29, 2006

    The lottery has been a scam since its inception. First of all, how did it get approved with all the controversy surrounding it? Or maybe that was just the way to get people interested. Personally, I don't play the lottery because I pay taxes. The lottery is just an extra tax on poor people that are given a false since of hope. As far as education is concerned, I will always be of the stance that if developers can come into an area and create housing, which brings in more students and aids in overcrowding, then they should be required to build schools to support these developed communities. The Heritage community in Wake Forest is a good example of this.

  • esprg Dec 28, 2006

    The lottery is a good idea, however, the pay-out amounts are horrible. If you have 3 of the cash5 numbers you only receive $3 dollars, 4 of the numbers pay-out only $200. It would seem that the backing and idea behind it was good, but there should have been more investigation done possibly from other states who've had the lottery longer like NY, PA, NJ and see what the payouts are for the games.

  • FragmentFour Dec 27, 2006

    Why does this lottery short-fall not come as a surprise? There were some wonderful pipe dreams strung out to get the thing going, but the NC General Assembly is not about to let the schools get the money REGARDLESS of what they promised. At the moment, there isn't as much money as was estimated. Start keeping tabs - there never will be.

  • E-Diva Dec 22, 2006

    clamtbain - You are absolutely right about PD.Martin's comment. I agree 100%....and I don't have kids either.

    Also, (just as another example) tax dollars pay for Medicare among many other services. I'm not elderly. I get no benefit from that except the comfort of knowing there are programs in place to take care of our parents and grandparents should they not be able to care for themselves.

  • PDMARTIN Dec 22, 2006

    To clamtbain

    I didn't ask for a rebuttal I was just stating my opinion.
    Don't take snippets of my comments and using them to your liking. Take the comment as a whole. I don't mind paying taxes, I just don't like paying for things of no benifit to me.
    Think about the elder that have to continue to pay for education. There should be a mandatory cut off.

    Don't respond again, you'll just take it out of context.

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