Lottery Commission

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N.C. Lottery Commission Holds Inaugural Meeting

Special Report - October 6, 2005
Recognizing the intense scrutiny the North Carolina State Lottery Commission will be under as it seeks to establish state sponsored gambling in North Carolina, Commission Chairman Dr. Charles Sanders made ethics and integrity the focus of the Commission’s inaugural meeting on October 6. Commission members heard from the head of the N.C. Board of Ethics and from the Chief Deputy Attorney General on the necessity to create a code of conduct for the Commission and for commissioners to avoid conflicts of interest and ethical violations.

Commission member Kevin Geddings of Charlotte confessed that questions had been raised about his objectivity due to his prior involvement with lotteries in other states and his close relationship with employees of major lottery corporations. As a result, Geddings stated that he would recuse himself from voting on the selection of a company to run the lottery in North Carolina. Geddings also moved, and the Commission agreed, to formally name the lottery, “The North Carolina Education Lottery.”

During the roughly two-hour meeting many commissioners raised questions and concerns about the lottery. Dr. Sanders, retired chairman and CEO of Glaxo, said the commissioners should always keep in mind that they serve the people of the state and that they must operate with integrity. Acknowledging that the lottery will increase the problem of compulsive gambling, he expressed the importance of responsible advertising and making sure people understand the odds. He also admitted that the lottery’s executive director likely will have a considerably higher salary that the highest paid public official in North Carolina.

Malachi Greene of Charlotte cautioned that lotteries often serve to transfer wealth from poor minorities to more affluent citizens, and that education funding often declines in states with lotteries. He said the Commission must do all it can to avoid these problems and control the location of lottery outlets—especially in poor urban areas. Bryan Beatty, Secretary of the N.C. Department of Crime Control and Public Safety and a Commission member, expressed the need for more Alcohol Law Enforcement (ALE) officers to enforce the lottery laws. Robert Appleton, a CPA from Wilmington, suggested the Commission hire an internal auditor who would report directly to the Commission on the activities of the lottery. John McArthur, an attorney for Progress Energy, stressed the importance of strong financial controls over lottery operations. Linda Carlisle of Greensboro said the Commission must do all it can to ensure that lottery money supplements education funding instead of replacing or supplanting it.

In addition to appointing several committees, Chairman Sanders said he will work quickly to prepare a job description and place ads for an executive director. The Commission’s next meeting is scheduled for October 26.