Cut the lottery losses

Cut the lottery losses

- in Fitzsimon File

If all goes according to plan, retailers in North Carolina will begin selling scratch off lottery tickets in two weeks. If that happens, it will be the first thing about this lottery that has worked the way it was promised.

Even lottery supporters have to admit that this game has been flawed from the beginning. It was passed by the General Assembly unethically, if not illegally. A pending lawsuit will settle that question.

Early in the session, House Speaker Jim Black promised a lottery with no advertising.  That restriction was removed in the final budget and now lottery commissioners are approving commercials for the scratch off games.

We were also assured that the lottery would not bring corruption to North Carolina, but the lottery commission had barely met for the first time when a commissioner resigned after lying on an ethics form.

Then we learned that Black’s former Chief of Staff was lobbying for a lottery company without registering with the Secretary of State. Those revelations sparked a federal investigation that continues today.

Governor Mike Easley and most other prominent lottery supporters led us to believe that the lottery proceeds would all go to education and would not supplant money already spent on schools and early childhood programs.

A few weeks ago, Easley admitted that roughly half of the lottery revenue would replace money currently spent on his More-at-Four program and class size reductions. Apparently, unbeknownst to anyone including state lawmakers, those programs were funded with a loan from the then nonexistent lottery.

This week, we learn that lottery officials are worried about the provision in North Carolina law that requires that 35 percent of the lottery revenue be spent on education programs. Adding administrative costs and advertising, that leaves 52 percent of the revenue for prizes. South Carolina allocates 60 percent of its revenue for prizes, meaning players can win more money.

But not to worry. Lottery Commission Chair Charles Sanders points out the law actually says that the state should allocate the 35 percent to schools “to the extent practicable,” so that too is likely to change.

The most common argument for the North Carolina lottery was that the state was losing money to bordering states. Now we learn that we still might be unless we lower ourselves to their level.

It is not clear what happens if bordering states air more aggressive and targeted commercials, but it’s probably a safe bet that North Carolina will get more direct with its advertising campaign too, regardless of the alleged misgivings of state lawmakers who made all sorts of promises before voting for the lottery, promises that are now being broken one by one.

We are stuck with a lottery unless the state courts say otherwise or the General Assembly repeals it, which would be a good idea, but is highly unlikely.  Instead of scrambling to stretch the law to bring in more money, state lawmakers ought to cut our losses and amend the lottery law this summer to restore some sanity to the enterprise.

Let’s dedicate all the money to school construction and not base any ongoing programs on unreliable revenue. Let’s not worry about what other states are doing with percentages for prizes and more advertising. Keep our advertising to a minimum and don’t encourage people to play, just let them know the game exists.

North Carolina will get a little more money for schools and we won’t have to sell our soul to keep up with our neighbors.  All it would take to do that is for legislators to decide this summer to find the integrity to go back and make good on the lottery promises they made to us last year. That might also restore a little faith in the political process and goodness knows we need that.

About the author

Chris Fitzsimon, Founder and Executive Director of N.C. Policy Watch, writes the Fitzsimon File, delivers a radio commentary broadcast on WRAL-FM and hosts "News and Views," a weekly radio news magazine that airs on multiple stations across North Carolina.
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