The Lottery Thus Far

Family North Carolina Magazine—May/June 2007

By Bill Brooks

The North Carolina Education Lottery recently celebrated its first anniversary. I wanted to recognize this event by correcting some of the errors that have crept into recent lottery pronouncements.

First, let’s remember that “lottery” is simply a nicer way of saying that the North Carolina government is now a bookie, defined as ”one who determines odds and receives and pays off bets.” Others in the state who engage in such a business, both before and after the state lottery began, are gambling illegally.

Despite the continuous advertising and media hype that seeks to convince us otherwise, it is also helpful to remember the lottery itself is a revenue raising mechanism of the state and actually has nothing to do with education, even though it is called the “Education Lottery.” At present, some of the revenue generated by this giant bookmaking operation helps to fund several education related programs, but the way the money is raised is totally separate from the way it is spent.

There is also no “shortfall” in lottery revenues as declared recently by the Governor and reported in the press. The truth is there were some bad estimates given or received by the Governor’s office in the months prior to the lottery votes in the General Assembly. For many years, others who estimated the initial size of lottery sales in North Carolina had projected gross sales of about $1 billion per year. With a tax of 35 cents on every ticket, the lottery was projected to bring in about $350 million in revenue per year.

In the months leading up to the vote on the lottery in the fall of 2005, the Governor’s office began claiming that lottery sales would be $1.2 billion per year. This seemingly small change yielded an estimated additional $70 million per year for the state, and boosted the annual revenue projections to $430 million, presumably making it more tempting for those legislators who wanted more money. Maybe it was this increased lottery revenue estimate that helped pick up an extra vote or two needed to pass the bill in the House. Irregardless, the estimate was wrong. Now the Governor is calling for changes in the lottery formulation, to increase the percentage of money going to our gamblers to be more in line with that of surrounding states. He, and presumably the lottery officials, figure that our gambling operation is not competitive with other states because those living near the state line will cross over to purchase the tickets in other states.

Look soon for more aggressive lottery advertising. You’ve probably already noticed the huge lottery billboards going up around the state. These have electronically controlled numbers to keep us “informed” on the size of the lottery jackpot. We’ve also seen a major push by the lottery to sponsor a player of the game at numerous collegiate athletic events. This is in clear violation of the law governing the lottery that says “lottery advertising shall be tastefully designed and presented in a manner to minimize the appeal of lottery games to minors.” Linking sports with the lottery, or any other type of gambling, fails the “minors test.”

In the future, we can also expect the lottery to expand the scope and reach of the present gambling games. This year, they are introducing lottery ticket vending machines, despite the fact that it is a crime for a minor to purchase a lottery ticket. If cigarette vending machines were banned because of sales to minors, it is unlikely that store clerks can prevent youth from buying lottery tickets. And unlike alcohol sales to minors, who are also prohibited from possession, anyone of any age can own a lottery ticket.

Also, look for the lottery to expand the types of gambling. In addition to instant lotteries, the lottery commission already has the authority to move into “online games, games played on computer terminals or other devices, and other games traditional to a lottery or that have been conducted by any other state government-operated lottery.” This leaves the door wide open to gambling as other states expand the powers of their own lottery commissions.

A remaining issue is the unsettled lawsuit challenging the constitutionality of the lottery law itself, because of the manner in which the bill made it to the Governor’s desk for his signature. Six plaintiffs, including the North Carolina Family Policy Council, filed suit in state court last year challenging the constitutionality of the method by which the lottery was passed in both the House and the Senate. The North Carolina Court of Appeals is scheduled to hear that case on May 22.

Bill Brooks is president of the North Carolina Family Policy Council.

Copyright © 2007. North Carolina Family Policy Council. All rights reserved.