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A Note to the North Carolina Lottery: Spend More on Education, Not Advertising!

Gambling seemed to be a top-of-the-mind issue for many legislators during this year’s “Short Session” of North Carolina General Assembly. Two identical pieces of legislation that were introduced in the State House and Senate (HB 952 and SB 716) proposed to double the amount of lottery revenues that could be spent on advertising from one percent to two percent. While this may not sound like a big deal, it would have increased the lottery’s advertising budget from approximately $25 million to $50 million next year. Fortunately, neither of these measures were approved.

The lottery seems to be doing just fine on its current advertising budget. Last year, revenues approached $2.5 billion, and they’re up $455 million from the total over two years ago. Indeed, on that one percent advertising budget, revenues have increased every single year that the lottery has been in existence. The lottery isn’t having trouble separating citizens from their hard-earned dollars.

Meanwhile, the State Lottery is failing to meet its legal obligation to disperse more than one out of every three dollars spent on lottery tickets to education-related projects. When the lottery was first enacted in 2005, lawmakers pledged to allocate “at least 35% of the total annual revenues” for class-size reduction, school construction, and college scholarships. But the very next legislative session, state legislators watered down this directive and gave the State Lottery Commission more discretion with lottery spending. Last year, only 26 percent of lottery revenues went to education, and that number has never been higher than 32 percent. Throughout over a decade of operation, the North Carolina Lottery has consistently failed to fulfill its promises.

Given that, I question the wisdom of increasing advertising for a couple of reasons.

First, and most obviously, the State Lottery Commission should work on meeting the spirit and intent of the lottery when it was initially enacted. Rather than increasing the amount of money spent on advertising, the Commission should increase the amount it directs to education. Until the Lottery Commission can get that most fundamental piece sorted out, the legislature shouldn’t entertain any discussion of fiddling with advertising budgets.

Secondly, though, and of even more concern, I wonder about the ways the current advertising budget is being spent. I’m a big baseball fan, and I see the Durham Bulls play regularly. On Friday and Saturday nights, there are fireworks after the games. I have a hard time thinking of anything more clearly targeted at families and kids than minor league baseball, fireworks and a hotdog or two. And yet this year, between the end of the game and the beginning of the fireworks, they’ve introduced something new – the Carolina Keno game.

Carolina Keno is the newest addition to the line-up of North Carolina lottery games. I’m not a keno aficionado, but in the ballpark, different sections of seats are assigned numbers. Then random numbers pop up on the outfield screen. If your section’s number comes up, you advance. Eventually just one section is left. That section is the winner, and staff members throw a number of t-shirts branded with the lottery logo into the stands.

If I didn’t know better, I’d think the Lottery Commission was intentionally targeting kids. 

Even if I’m generous and assume that it’s parents who are the target of this advertising, it’s clearly a format that is designed to appeal to kids, that draws kids in, that tells kids that the lottery is cool and fun and can make you a winner.

Yes, North Carolina law prohibits the sale of lottery tickets to kids under 18. Every lottery radio and television commercial concludes with a warning about problem gambling and information on the gambling addiction hotline. The NC GOP (which holds a supermajority in both chambers of the General Assembly) even says in its platform committee report that it is opposed to gambling.

But clearly, certain policymakers are not really opposed to gambling if they want to spend even more money on promoting the one form of gambling that is operated by the State. Clearly they’re not really worried about drawing in children when they’re using existing advertising dollars to promote Carolina Keno during a family-friendly baseball game, not to mention all of the lottery promotion at collegiate and other sporting events.

Last year, the lottery spent one percent of revenue on advertising, in keeping with the current law. But let me put that into real dollars. That was a little over $24 million spent on advertising in 2017. If the Legislature passes one of these bills, we’d see that jump to nearly $50 million next year. Does anyone think that North Carolina really needs $50 million dollars in lottery ads?

I’d like to see the lottery go away entirely. The state should not be in the gambling business. But as long as the lottery is here, the state should keep the advertising budget where it is, reconsider how that advertising budget is being used, and insist that the lottery meets the intent and spirit of the law designating that 35 percent of revenues go to education.


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