North Carolina's decision to join the ranks of states offering the
lottery will almost certainly mean fewer lottery dollars for South
Carolina. The Legislature should prepare itself for the likely loss of
funds for this state's "Education Lottery."
An estimated 12 percent of South Carolina's lottery sales are
attributed to purchases from North Carolina residents. Count on border
sales shrinking, if not drying up, when the Tar Heel State begins selling
lottery tickets of its own some six months from now.
S.C. Lottery director Ernie Passailaigue contends that cross-border
sales will persist, since North Carolina legislators have limited lottery
payouts in order to funnel more money into education. Current customers
may very well continue buying tickets in South Carolina, where higher
jackpots will be the rule, Mr. Passailaigue says.
"Lottery players do not have any allegiance outside of greed," Mr.
Passailaigue said, in remarks quoted by The Associated Press. The lottery
director's assessment of his customers' motivation may be on the mark.
Nevertheless, his prediction strikes us as overly optimistic given the
heightened convenience for legal gambling in N.C.
In any event, S.C. lottery officials will track the trends, thereby
allowing the Legislature advance warning of the likely effects of the
North Carolina lottery on this state's proceeds.
South Carolina legislators have previously insisted on their commitment
to using lottery proceeds for college scholarships, while weakening
standards for eligibility. The likelihood of lower returns should
encourage legislators to toughen those standards, while retaining lottery
assistance for supplemental elementary school programs and school bus
purchases -- both demonstrable needs.
Lottery proceeds were intended to supplement public education because
there is no guarantee that they will be constant. The recent decision of
the North Carolina Legislature has underscored the likely volatility of
lottery revenues in South Carolina, all but ensuring their decline, and
soon.