Democratic Gov. Mike Easley will sign Bill 1023 into law Wednesday.
Easley, the Senate president pro tempore and House speaker will appoint the nine members of the North Carolina State Lottery Commission. The commission will hire a director, who with approval of the commission, can hire an outside firm to operate the games.
The commission must set advertising rules for games that can't "intentionally target specific groups or economic classes" and can't present the lottery as a way for a person to get out from under their economic or personal problems. Advertising also can't directly urge people to participate and must include information on responsible gambling. Advertising spending is capped at 1 percent of annual revenues.
Scratch-off games may be available within six or seven months, said Senate Majority Leader Tony Rand, D-Cumberland. Numerical games would follow. The commission will decide which kind of games will be offered. With the commission's OK, the director can enter the North Carolina lottery into multistate agreements such as Powerball or Mega Millions.
At least 50 percent of total annual revenues would go toward prizes and at least 35 percent toward education initiatives. No more than 8 percent can go toward lottery administrative and advertising expenses and no more than 7 percent for lottery retailers. Expenses include $1 million set aside annually for gambling education and treatment programs.
Easley administration officials estimate that a lottery will generate $400 million in net proceeds annually. Half of the money would go to class-size reduction in early grades and to expand pre-kindergarten programs for at-risk children. Forty percent would go toward local public school construction. Ten percent would go for college scholarships of up to $4,000 annually for students in low-income families.
Winners of less than $600 can receive their prizes at lottery retail outlets. The commission redeems prizes of at least $600. Daily drawings will be public and can be recorded for television or radio.
Security audits will be performed annually. The state auditor also will conduct annual audits. A performance audit will be performed every two years.