Online lottery sales concern NC retailers

Members of the Lottery Oversight Committee said they were caught off-guard by the North Carolina Education Lottery's decision last week to launch a subscription service that allows players to buy tickets for its three jackpot games – Powerball, Mega Millions and Carolina Cash 5 – online.

The service is designed for lottery players who want to get a set of numbers for multiple drawings in advance. A subscription to at least two weeks of drawings for one of the three games is required – players cannot use the service to buy a single ticket.

The North Carolina Retail Merchants Association was quick to criticize the move, saying that it would hurt the lottery's statewide network of retailers who sell tickets to the games and also would reduce state tax revenues, maintaining that fewer customers for lottery tickets means fewer sales of other items as well.

"It's money out of my pocket. The 7 percent (commission) that we get, they (will now) get. So, that's cutting out the retailers," said Warren Liles, owner of the C Mini Mart on Poole Road in Raleigh, one of North Carolina's biggest lottery ticket sellers.

Lottery director Alice Garland said retailers haven't suffered in other states that have adopted online sales in recent years, saying subscription services generally attract new players.

The subscription service doesn't include scratch-off tickets, which account for almost two-thirds of the lottery's revenue, Garland said.

Some existing players say they like the idea of buying tickets online, while others said they don't plan to change their ritual of picking up tickets at a favorite store.

"You can go on the computer and get it right quick," Roderick Heath said. "It would probably make sales go up, and you won't have to leave your home, so it will be real convenient."

"I normally come stop in the store anyway, and I'll probably be getting something different, something else besides tickets," David Jenkins said.

Lottery Commission Chairman Keith Ballentine, a retailer himself, said he supports the subscription service as a way to generate more revenue. Officials said they expect sales to increase 1 to 2 percent once the service begins in November.

Lawmakers said they plan to evaluate the online sales during the 2014 legislative session.

Rep. John Blust, chairman of the legislative oversight committee, said it's ironic that the state is expanding into online sales at the same time as law enforcement cracks down on Internet sweepstakes parlors.

"There's a little bit of that tension that it's OK for the state but it's not OK for anyone else," said Blust, R-Guilford.