Local News

Audit: Lottery Gambles Without Long-Range Plan

Posted April 10, 2008 2:16 p.m. EDT

N.C. Education Lottery

— The North Carolina Education Lottery has no strategic plan or method of forecasting revenue and has done no marketing or operations research, according to state audit released Thursday.

The lack of planning could hinder the lottery's attempts to increase sales to raise more money for public schools in North Carolina, the audit said.

“Mapping out the proper strategy is essential to any successful business venture, and if North Carolina is going to be in the business of selling lottery tickets, the taxpayers should know that the lottery has a road map to success,” State Auditor Les Merritt said in a statement.

The lottery was launched in 2005 with a limited business plan, and the agency has no defined goals or ways to measure success, the audit said. It also uses a "consensus" estimate of annual revenue projections, based on discussions with the Governor's Office and legislative leaders, instead of using formal forecasting methods. Also, no efforts are made to determine the best way to reduce costs, determine customer satisfaction and evaluate advertising efforts.

Lottery director Tom Shaheen said the initial focus was to get the lottery up and running quickly, and officials are in the process of putting together a long-term strategic plan. With a couple of years of sales trends to build on, he said, lottery officials can begin doing more formal analysis to better predict annual revenue.

Separately, the audit found that the salaries of Shaheen and other lottery officials were in line with salaries paid to lottery officials in other states.