South Carolina lottery officials insist there’s no reason to
panic, now that North Carolina’s lottery has cleared its last
hurdle.
The N.C. Senate on Tuesday finally signed off on creating a
lottery after months of stalemate. The N.C. House had approved the
law in April, and Gov. Mike Easley is expected to sign it.
The N.C. lottery could start selling scratch-off tickets in six
months and begin siphoning back some of the $150 million North
Carolinians now spend on the S.C. lottery.
“It’s something we knew was probably inevitable,” said S.C.
Lottery chairman John C.B. Smith. “There certainly may be some
strategic issues in how we market ourselves, but it won’t change our
basic strategy. We’ll continue to be successful.”
S.C. lottery director Ernie Passailaigue sees an “Achilles’ heel”
in the Tar Heels’ lottery plan — it earmarks a high portion of
proceeds for education programs.
That, he said, will translate to smaller payouts for N.C. winners
and make South Carolina’s games more attractive to
border-crossers.
According to the North Carolina bill approved Tuesday, 35 percent
of proceeds must go to education programs. In South Carolina, about
30 percent goes to education.
South Carolina officials say they’ve conducted research on what
North Carolina players want and believe they will continue to
attract a significant number of Tar Heels.
“Most lottery players are not stupid,” Passailaigue said.
“They’re going to play where they think they can win, in terms of
frequency and size of payout.
North Carolina “is going to be challenged if they can’t get that
prize structure changed.”
And at least initially, North Carolina won’t have a big money
game like South Carolina’s Powerball, which draws more and more
players as multimillion-dollar jackpots escalate.
South Carolinians along the state line Tuesday seemed to welcome
the competition — even those whose business could be drained by a
cross-border game.
“A lot of our regular customers have said they’ll always come
here no matter whether North Carolina gets the lottery or not,” said
Jackie Birman, cashier at the Shop n’ Go in Fort Mill. “It’s not
just about the tickets — its about our relationship with them.”
Tondra Jackson, a 41-year-old from Rock Hill, knows a lot of
North Carolinians who cross the state line to play South Carolina’s
games.
“If they’re like me, they’re gonna play both,” she said. “I go to
church in North Carolina, so yes, when I’m in North Carolina, I’ll
buy a ticket there, just like I used to drive to Georgia before we
got it.”
Levonel Ratliff of Charlotte might be the type of Tar Heel
lottery player that South Carolina retailers and lottery officials
could underestimate.
“I’ll be going back and forth, back and forth,” said Ratliff, 53,
who travels once a week to the Red Rocket store near Fort Mill with
his 82-year-old mother, Helen, and 85-year-old father, Floyd, to
play the S.C. lottery.
“But since North Carolina is closer, I’ll probably be there
more.”
The financial effects of a North Carolina lottery could
ultimately weigh heavily in the S.C. General Assembly’s budget
debates.
South Carolina stands to lose as much as $150 million a year in
sales to North Carolinians, according to earlier S.C. Lottery
Commission estimates.
That would be about 16 percent of $953 million in annual lottery
sales.
The lottery now pays for a host of programs including K-5 reading
initiatives, thousands of college scholarships, and professor
recruitment initiatives at the state’s research universities.
With scholarships taking up an ever-growing piece of the lottery
pie, House Speaker Bobby Harrell, R-Charleston, said lawmakers might
have to find other ways to pay for some of those programs.
“The K-12 portion of the lottery has already been eroded too
much,” Harrell said. “If there are any changes, it should be to the
higher education portions of lottery spending.”
Like South Carolina, North Carolina plans to spend lottery
proceeds on education — public school construction, college
scholarships and class-size reduction and preschool programs.
N.C. lottery opponents, echoing their S.C. counterparts from five
years ago, argued that the games are an inefficient way to raise
money and send the message to children that gambling is the way to
solve the state’s financial problems.
“Is this a lesson we teach our children? ‘Don’t do your homework;
don’t work hard; you’ll make it rich,’” N.C. Sen. Andrew Brock told
his colleagues Tuesday. “It’s a poor choice for North Carolina. It’s
one that we’ll regret for a long time.”
Knight Ridder Newspapers and The Associated Press contributed to
this report. Reach Stensland at (803) 771-8358 or jstensland@thestate.com
