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N.C. lottery director says lower payouts could hurt sales
North Carolina Lottery: N.C. lottery director says lower payouts could hurt sales
The law requiring the North Carolina lottery to return at least 35 percent of all ticket sales to state education programs could inhibit sales and ultimately cost the state money, according to the lottery's executive director and other experts.
To meet the requirement, North Carolina will pay out less to winners than neighboring states offer. Tom Shaheen, director of the state lottery and a past president of the North American lottery trade association, said that could mean fewer tickets are sold. Dedicating more money to prizes encourages more people to buy tickets and leads to more money for the state, experts say.
"I wouldn't say it's scientifically an absolute, but I believe it personally from my experience in the lottery," Shaheen said.
South Carolina's lottery director, Ernie Passailaigue, said he likes that his state doesn't dictate how much the lottery must give to education programs.
"Politicians don't understand this," said Passailaigue, a former state senator. "But the players understand this very much. If they buy the games and do not have very pleasant experiences - either through the dollars won or the repetitiveness of the wins - they are either not going to play or else go somewhere where they have a better chance."
South Carolina will pay out 61 percent of its sales revenue in prizes this year, he said. Virginia and Georgia are paying about 58 percent and Tennessee paid about 54 percent last year.
North Carolina's first batch of scratch-off lottery tickets will offer about $79.5 million in prizes. That's at least $10 million less than what Virginia and Georgia would pay and at least $14 million less than what winners would get in South Carolina.
Several states have seen success by increasing their payout percentages, while Texas saw a steady decline in business when it reduced its payouts from 60 percent of sales to 50 percent in 1997. Lawmakers reversed their decision two years later.
California, Ohio, Colorado, Connecticut, Washington and other states saw significant increases in sales and profits after increasing the percentages paid in prizes in recent years.
"What they understand is that it's a volume business and that more sales is the way to bring in more actual dollars," Shaheen said. "We like to say that you don't pay for scholarships with a percentage. You pay for them with real dollars."
State Sen. Tony Rand, D-Cumberland, said he doesn't recall how the 35 percent requirement made its way into law, but says he wouldn't object to a revision if it would mean more money for schools.
"If there's a better way to skin the cat," he said, "then the cat better look out."
AP
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30 comments. Last comment 4 years ago by .
Coastal Georgia United States Member #2703 October 30, 2003 1868 Posts Offline |
| Posted: March 9, 2006, 7:21 am - IP Logged |
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chicago United States Member #3746 February 10, 2004 382 Posts Offline |
| Posted: March 9, 2006, 8:46 am - IP Logged |
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Ive been saying this all along. Higher paybacks means more net income as more people will play. But states love to be stingy. And since you get taxed on winnings, more people will win so you will sort of get that increased payback money a bit back anywhere through the back door. Why would people play lotteries that payback 50% when you can go to the horsetrack and get 80% back or the casino and get 90%+ back?
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New Member  Washington,NC United States Member #32005 February 1, 2006 7 Posts Offline |
| Posted: March 9, 2006, 11:21 am - IP Logged |
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people will play nc lottery. will they have pick 3
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Charlotte NC United States Member #17704 June 18, 2005 3468 Posts Offline |
| Posted: March 9, 2006, 11:55 am - IP Logged |
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State Sen. Tony Rand, D-Cumberland, said he doesn't recall how the 35 percent requirement made its way into law, but says he wouldn't object to a revision if it would mean more money for schools. A legal way for the grabbers to get their cut. 
TakeemtotheBank
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United States
Member #380
June 5, 2002
11297 Posts
Offline
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| Posted: March 9, 2006, 12:21 pm - IP Logged |
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Ive been saying this all along. Higher paybacks means more net income as more people will play. But states love to be stingy. And since you get taxed on winnings, more people will win so you will sort of get that increased payback money a bit back anywhere through the back door. Why would people play lotteries that payback 50% when you can go to the horsetrack and get 80% back or the casino and get 90%+ back? NY Rotto pays back only 38%-40%. Let's hope NC doesn't get THAT stingy.
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New Member Greensboro, NC United States Member #21762 September 8, 2005 14 Posts Offline |
| Posted: March 9, 2006, 10:17 pm - IP Logged |
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Good grief! We have some of the highest gas prices in the nation, now good ole NC is dipping in to our lottery profits. How embarrasing! Guess those Virginia trips are still a go.
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north carolina/virginia United States Member #2134 August 17, 2003 53 Posts Offline |
| Posted: March 10, 2006, 8:13 am - IP Logged |
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anniep, what is wrong with our home state?? Its like a bunch of ignorant people fumbling and putting together something horrible. NC have fumbled this ball so much, its embarassing!
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Charlotte NC United States Member #17704 June 18, 2005 3468 Posts Offline |
| Posted: March 10, 2006, 5:20 pm - IP Logged |
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 Went to SC today and they have signs on the registers announcing that there will be lower pay outs in NC.
TakeemtotheBank
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Sparta, NJ United States Member #18644 July 9, 2005 1977 Posts Offline |
| Posted: March 10, 2006, 5:41 pm - IP Logged |
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What Rocket Scientist figured out lower payouts will result in lower sales? Can I get a copy of that brilliantly analyzed document? 
|||::> *'`*:-.,_,.-:*''*:--->>> Chewie <<<---.*''*:-.,_,.-:*''* <:::|||
I only trust myself - and that's a questionable choice
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Charlotte NC United States Member #17704 June 18, 2005 3468 Posts Offline |
| Posted: March 10, 2006, 5:49 pm - IP Logged |
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What Rocket Scientist figured out lower payouts will result in lower sales? Can I get a copy of that brilliantly analyzed document? It was posted for the benefit of those who had crossed state lines from NC, like I had done. I chuckled.
TakeemtotheBank
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New Member Greensboro, NC United States Member #21762 September 8, 2005 14 Posts Offline |
| Posted: March 10, 2006, 7:23 pm - IP Logged |
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NC United States Member #11965 February 23, 2005 1017 Posts Offline |
| Posted: March 12, 2006, 11:15 am - IP Logged |
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Va and SC won't lose any money off NC
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United States
Member #380
June 5, 2002
11297 Posts
Offline
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| Posted: March 12, 2006, 1:53 pm - IP Logged |
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It will be very interesting to see what the prize return is for pick-3 and pick-4. Doesn't sound like NC will ever pay 60% like some states do.
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United States Member #26829 November 18, 2005 160 Posts Offline |
| Posted: March 12, 2006, 2:22 pm - IP Logged |
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A lot of you are ignoring the amount of negative publicity that the lottery has had to endure just to get off the ground.Do you think the house would have pass the lottery bill if the payout were over 50%?No way.This lottery has had to fight it's way up hill right from the start.Let's get the games running before everybody starts crying about payouts.There's no law that says the games can't be tweeked later on.It was the most important thing to get the lottery passed,first.
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