N.C. Lottery Players Defecting

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N.C. Lottery Players Defecting

Special Report - November 2, 2007
The North Carolina lottery may be less than two years old, but better odds and bigger prizes continue to lure Tar Heel players across state lines to purchase lottery tickets in Virginia and South Carolina, according to the Charlotte Observer. The report monitored ticket sales at the Border Station, a convenience store along the Virginia-North Carolina border that offers both Virginia and North Carolina lottery tickets. Cashiers at the store said that players pick Virginia tickets by a three-to-one margin over North Carolina lottery offerings.

Unlike North Carolina, where 50 percent of overall lottery revenue is returned in prizes, Virginia devotes 57 percent and South Carolina 60 percent to prizes. Some lottery advocates have blamed this reduced payout structure for the lottery’s lagging ticket sales and resulting revenue shortfall. Earlier this year, Governor Mike Easley proposed a plan to raise the amount paid out in prizes in hopes of renewing interest in the numbers game, even though his plan also required reducing the percentage devoted to education. Lottery proponents believe such a scheme would result in additional dollars for education by selling more tickets and raising the overall lottery revenue stream.

During the last session of the General Assembly, lawmakers inserted a provision into the 2007-08 budget that ostensibly allows the State Lottery Commission to alter the lottery’s prize payout structure, and lottery officials have already started increasing prizes. Alice Garland, deputy executive director for the North Carolina lottery, said that all scratch-off tickets introduced since September have prize payouts ranging as high as 65 percent of total lottery revenue. According to Garland, lottery officials initially used a three percent surplus in operational expenses to achieve this increase, but they are now funding the larger payout by lowering the percentage devoted to education.