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Lottery Looks at What It Can Do to Spice Up Year 2

Posted May 29, 2007
Updated May 30, 2007

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— North Carolina Education Lottery officials say the state has had one of the most successful lottery start-ups in history. Critics note that sales that are on track to be $900 million to $910 million this fiscal year would be about $300 million short of expectations for the first year.

The result is that many at the State Capitol and elsewhere are trying to figure out what’s next.

The problem with uncertainty in lottery income projections is that education programs depend on those dollars. For the fiscal year that ends June 30, lawmakers will probably dip into a reserve fund to make up for the lower-than-hoped sales, which will provide about $300 million for schools.

At the lottery offices, Executive Director Tom Shaheen has a different way to view the financial statements, a more optimistic one.

“There is no shortfall because it's all new money. It's about whether you see the glass half empty or half full,” Shaheen said Tuesday.

The lottery is projecting that its fiscal 2008 sales will be about $50 million above this year.

Regardless of how one sees the Fiscal 2007 results, lottery officials are looking ahead, but they say they have to work within the guidelines the Legislature gave them.

In an effort to boost sales, Shaheen said players can expect new games, some of them with bigger payouts, in the next year.

“That's what people want. They want something new, something different,” Shaheen said. The challenge, he said, is dealing with the boundaries set up by state lawmakers.

“If you're going to have lottery tickets, you need to be able to market it like any other consumer product,” Shaheen said. The lottery is limited to spending 1 percent of its budget on advertising, however.

What can be advertised, Shaheen said, is just a fun message that can't really entice people to play.

“The big thing is, you can’t have anything in the ad that would induce people to play,” Shaheen said.

State Sen. Janet Cowell, D-Wake, said things are set up that way for a reason, however.

“I did vote against the lottery, but I think if we're going to have the lottery, we need those restrictions. We don't need to be marketing it to kids, for example,” Cowell said.

So the public can expect new games and some bigger prizes, but probably not big changes.
With just one year under its belt, many lawmakers feel the lottery is too new to experiment too much.

The governor proposed lowering the percent of profits going back to education from 35 percent to 29 percent in order to increase the lottery jackpots. The theory is that sales would increase, ultimately sending more money back to education.

The idea is not getting much traction with lawmakers, however.

“The General Assembly is not going to do that,” Cowell said flatly.

For comparison, Virginia has an established lottery that started in 1988. It had nearly $1.4 billion in sales last year.


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  • bob23456 May 31, 2007

    Most states pay 5 cents to the store who sells the tickets. Why does NC pay 7 cents? A lot of people who buy lottery tickets will buy them when they stop in a store for their morning coffee. Not in NC can't purchase a lottery ticket until after 7:00 am, maybe sales would be greater if the state made it easier and paid the store only 5 cents what would increase the states income 18 million.

  • lollly52 May 31, 2007

    @applesmith - interesting point!

  • applesmith May 31, 2007

    When goverment controls the game and the printing of the numbers and game ticket or lottery machines,they control the money. Try this go to 3 different stores buy lottery tickets for the drawing, at least 3 tickets one from each store. Look and see how many of the same numbers you get. The lottery commision programs the machines to give out certian numbers at random. OK if they program the lottery machines and draw the numbers ODDS OF WINNING DECREASE.HMMMMMMMMMMMMMMMMMMM!!!!!!!

  • sick of thugs 3 May 31, 2007

    Wow At Work. I would never even think of giving $20 dollars for a lottery ticket. Thats alot! Hope you win though. Remember the little folks.

  • At Work May 31, 2007

    I would like to see it actully pay out something! As long as my family members and I have played it we have not won anything, yet I still bought a couple of the 20.00 tickets for july!

  • sick of thugs 3 May 30, 2007

    It would really spice up if they shut it down.

  • billybob72 May 30, 2007

    Bottom line is that many thought the lottery would avoid tax increases, and were misled. The school construction helps slightly, but with only $6 million going to Wake County and a $1 billion bond passing last year, with another one likely soon, there is only one way to avoid higher taxes -- better growth and spending policies.

  • mvnull May 30, 2007

    Where does the money go?

    Assume $900 million as the total sales. 35% goes to "education" ($315 million). Now, of that, 50% ($157.5 million) goes to More at Four and nebulous "classroom size reduction". This replaces the line item for More at Four in the budget, so this is actually just freeing up tax money to be spent elsewhere. Noone knows about the classroom reduction -- it may well be fictional. 40% goes to construction ($126 million). So far, Wake County has gotten $6 million, Orange $621,000, Chapel Hill $1, Durham $3 million (3/4 of the yearly total). This, of course, offsets property taxes. The remaining 10% ($31.5 million) goes to funding Pell Grants. I haven't traced this yet, it may or may not relieve line budget items. The maximum Pell Grant any student can receive is about $4,000, so this is some 7800 students per year (more who receive lesser amounts). Not much, and certainly nowhere close to Georgia's Hope scholarship.

  • 2late May 30, 2007

    i foresee jail time for at least one person involved in this lottery mess within the next 5 years

  • swisher1 May 30, 2007

    I would just like to know where all this money IS being spent - if it's not getting to the schools - which was a farce to begin with - where is it going? I rarely ever waste a dime on the silly lottery scam, but the other day I went in to cash in a "scratch-off" ticket that I had won $1 on, and actually wanted to cash it in - the counter attendant, thinking I wanted to waste yet another $1, reached for another ticket for me. I looked at him and when I told him I "just wanted my dollar," he looked at me like I was crazy. I suppose he is so used to these poor nitwits turning over ticket after ticket that he just assumed that I was as stupid. I broke even on that round and don't expect to be squandering my hard-earned money on this NC scam again! It's more fun when you play in VA anyway!