Lottery Sales Below State Projections

RALEIGH, N.C. — The North Carolina lottery raised about $145 million for education programs during its first 10 months, according to an audit released Tuesday, but sales are running far below state projections.

More than $412 million in lottery tickets have been sold so far, but when the games started in March, state officials expected they would have about $600 million at this point.

The legislature projected $1.2 billion in sales by the end of the fiscal year next June 30, which would raise $401 million for education.

"So we are running behind what projections are, but we have about six months to get there," lottery director Tom Shaheen said, noting that he expected about $1 billion in sales by next June. "No matter what we get to, it's a revenue stream that last year we didn't have for education."

The audit, conducted by KPMG LLP under a contract with State Auditor Les Merritt, covers Aug. 31, 2005, to June 30. The lottery has paid $145 million to date to state schools.

At least 35 percent of net revenues from the North Carolina Education Lottery must be used for initiatives such as class-size reduction, preschool programs, school construction and college scholarships for needy students.

North Carolina became the last state on the East Coast to adopt a lottery after approving the games during last year's legislative session.

The state began selling scratch-off tickets in March, and Powerball sales started in late May. The state launched two numbers games in October.