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Groups Take Lottery Challenge to Supreme Court

The state Court of Appeals ruled the General Assembly legally created the North Carolina Education lottery.

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N.C. Education Lottery
RALEIGH, N.C. — The state Court of Appeals on Tuesday rejected claims that the North Carolina Education Lottery was created illegally three years ago.

A split decision in the ruling allowed lottery opponents to appeal the decision to the state Supreme Court.

After a lottery bill was rushed through the General Assembly in August 2005, passing the Senate on a day when some lawmakers who would have voted against it were absent, opponents sued to block the lottery. They maintained that, under state law, the bill needed to go through three hearings on separate days because it raised revenue for the state.

Appellate Judges James Wynn and Robert Hunter ruled that the lottery legislation wasn't a revenue bill because it doesn't commit state funds to paying lottery winners or create a tax that state residents must pay.

"A consumer chooses to purchase a ticket that promises only the possibility of winning a cash prize in return. There is no guarantee of payment or any investment made; the lottery ticket is a simple purchased good that represents the possibility of payment. As such, the State is not 'pledging' its faith or credit for a debt it definitively owes," Wynn wrote in the ruling.

But Appeals Judge Ann Marie Calabria disagreed, ruling that the lottery bill should have gone through three days of readings in the General Assembly before being sent to Gov. Mike Easley for approval.

"Rather than focusing on the voluntary nature of purchasing a lottery ticket, the focus must be on the purpose behind the fee," Calabria wrote in her dissent. "The purpose of the lottery is to raise revenues for North Carolina's education fund. As such, the revenues raised are not incidental to the game nor reasonably related to the maintenance and operation of the game, but are central to the game's purpose; therefore the revenues from the lottery are taxes."

The Wake County Taxpayers Association, the North Carolina Family Policy Council and several individuals, including state Rep. Paul Stam, R-Wake, are plaintiffs in the case. They are represented by the North Carolina Institute for Constitutional Law.

“After careful consideration of the Court of Appeals decision, we are compelled to take this case to the Supreme Court. The importance of adherence to constitutional mandates is simply too great to let the Court of Appeals decision stand without a review by our state’s highest court,” Jeanette Doran, senior staff attorney at NCICL, said in a statement.


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