COLUMBIA | Some S.C. lottery officials say they're ready to kiss goodbye more than $150 million a year in revenue if North Carolina adopts a state lottery of its own.

That would mean up to $45 million a year less for education programs such as K-5 reading and math initiatives and tuition assistance at technical colleges paid for through lottery profits.

But others, including lottery Executive Director Ernie Passailaigue, say they're not ready to cede all the state-line customers to North Carolina.

Passailaigue says creating unique games - and exploiting weaknesses in pending N.C. lottery regulations - could give South Carolina a leg up.

"We'll definitely have some advantages, just as they'll have some subtle advantages," Passailaigue said.

The N.C. legislature is considering the issue now and could have a lottery up and running within six months of final passage.

Although the S.C. lottery is constrained by state laws that prevent a more aggressive marketing strategy, officials here are split on whether they will have to make do with less.

"It's just one of those facts of life," said S.C. Lottery Commission Chairman C.B. Smith.

"We knew this was a possi-
bility, so it's not anything anyone's bent out of shape about," he said.

The N.C. lottery proposal is backed by Gov. Mike Easley and narrowly passed the N.C. House last month. A different version recently passed the Senate.

South Carolina stands eventually to lose as much as $150 million in sales per year if N.C. lawmakers approve a lottery, according to lottery commission estimates.

That's about 16 percent of $953 million in annual lottery sales.

Sales in border counties such as York and Horry, which enjoy a steady flow of out-of-state dollars, likely would take the biggest hit.

York County, just outside Charlotte, N.C., is home to the four top lottery sales outlets in the state.

Those four retailers alone have racked up more than $48 million in sales since 2002.

The N.C. lottery proposal - as approved by the N.C. House - would ban many forms of advertising for its own games, except in retail outlets.

Passailaigue said a loophole in the proposed N.C. law could allow South Carolina and other states to advertise their lotteries across the border, which South Carolina currently does not do.

"The prohibition on advertising would be on them, not us," he said. "I wouldn't be surprised to see Virginia and Tennessee do the same."

North Carolina also would issue only $1 and $2 scratch-off games for the first six months of its operation.

South Carolina already has a $10 scratch-off game, and officials say a steady rollout of fresh games - such as the Palmetto Cash 5 unveiled earlier this year - helps give the state at least a temporary advantage.

More important, South Carolina is part of the consortium of states that offers the profitable Powerball drawings. Even if it wanted to, North Carolina couldn't join the drawing for at least a year.

Still, no one expects a major shift in how South Carolina markets its games to in-state players.

State law restricts advertising costs to no more than 1 percent of lottery revenues, so a dip in ticket sales would mean an even smaller advertising presence.

Rep. Bobby Harrell, whose Ways and Means Committee would have to approve changes in lottery regulations, said he's unlikely to support any changes solely designed to raise more money.

"I don't think we ought to have a knee-jerk reaction just because of what North Carolina is doing," he said.