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S.C. concerned about potential impact of N.C. lottery

South Carolina LotterySouth Carolina Lottery: S.C. concerned about potential impact of N.C. lottery

Robyn Lorick knows the importance of lottery scholarships.

"There are three of us in college right now," says the 46-year-old mother of two.

Lorick and her son, 20-year-old Michael, both receive lottery tuition assistance for their studies at Midlands Technical College. Her daughter, 18-year-old Kaitlyn, gets the LIFE scholarship at Clemson University.

But with North Carolina moving closer to establishing a state lottery, Lorick, like many in South Carolina, is concerned about the impact on sales for its lottery and how that might affect scholarships.

About 12 percent of the lottery's sales come from North Carolina players, and some of the strongest retail sites are on the state's border, said South Carolina Education Lottery Executive Director Ernie Passailaigue.

The North Carolina House narrowly approved a lottery bill on April 6, and it was expected to be passed by the Senate. Officials there said they could have a lottery up and running in six months if it's approved.

That could cost the South Carolina lottery about $100 million in gross revenue a year, Passailaigue said.

South Carolina has had more than $2 billion in lottery sales since the games began in 2002. Of that, some $773 million has gone to the education lottery account and more than $377 million has been appropriated to scholarships so far.

Those lottery scholarships have helped about 400,000 South Carolina students, said lottery commission Chairman John C.B. Smith.

"The scholarships have had a very beneficial effect on our state and on our secondary schools in South Carolina," Smith said. "Hopefully we can find a way to continue that at the same level."

Some scholarships, like the LIFE and Palmetto Fellows, receive a fixed amount of funding. If lottery sales are down and there's not as much money available to put into the scholarships, the state picks up the slack.

But others, like the HOPE scholarship and lottery tuition assistance, are totally reliant on lottery dollars. If sales decrease, so does the amount available for the scholarships.

"We are concerned about the potential in reduction of tuition assistance for two-year students," said Lawrence Ray, spokesman for the South Carolina Technical College System.

And there's been a growing number of students relying on those funds, Ray said. In 2004-05, there were about 34,000 students who used tuition assistance - a 20 percent increase over the previous year, he said.

Many state leaders tried to remain optimistic about the potential competition from North Carolina.

"We know sales are going to diminish, but it's not going to destroy our lottery," said lottery commissioner Tim Madden.

Rep. Bill Clyburn, D-Aiken, and a member of the House Ways and Means K-12 Subcommittee, pointed to Georgia. That state had feared the competition from South Carolina, but has not seen a serious impact on sales, he said.

"We have so many citizens on the border of North Carolina. It's quite evident they're going to play some lottery there," said Clyburn. "I feel like it's going to affect our scholarships, but I hope it's not significant to the point where we will be hurt by it."

The state Board of Economic Advisors has estimated that $265 million in lottery revenues will go toward education for the 2006 fiscal year. But many are watching to see how North Carolina's plans could impact those projections.

"North Carolina adopting a lottery is not a plus for South Carolina," said board Chairman John Rainey. "It's going to be huge. I don't know that you lose all 12 percent (of lottery sales from North Carolina), but you're certainly going to lose something."

Passailaigue said he had been certain the lottery could meet next year's projections, but now has some reserves. He expects to begin to feel the pinch in the latter half of fiscal year 2006, and feel the full punch in fiscal year 2007.

Passailaigue said the South Carolina lottery would work to minimize the impact of a North Carolina lottery with advertising and games geared toward North Carolina players.

The lottery has profiles of North Carolina players and "we can try to cater a certain element of our product mix to meet their needs," Passailaigue said.

When one considers the concerns of competition from the north added to the natural slowing of sales after the novelty fades from a lottery, it's clear why officials are worried.

"There is always a natural decline after the new wears off," Madden said.

The economic board has looked to other state with lotteries - such as Kentucky, which is comparable in demographics and size - to determine how the lottery might fare.

"Frequently in the second and third year, after the honeymoon wears off, there's a softening," said Larry Newby, director of research for the Kentucky Lottery.

Kentucky, which began its state lottery in 1989, saw a slowdown after three or four years. After a few years of growth, sales declined from $486.5 million in fiscal year 1993 to $479.8 million in fiscal year 1994, Newby said. They slowly picked up the next year.

But lottery sales are a gamble because they can be affected by a variety of factors, including increased gas prices - most lottery tickets are sold at convenience stores - and jackpots from multistate games such as Powerball.

Lorick says she's lucky. Her job at Lexington Medical Center makes up the difference of whatever the lottery tuition assistance doesn't cover for her nursing program. But she and her husband still have to borrow or pay out of pocket any extra costs for her son. And she knows her budget would be pinched if they lost the lottery scholarships.

Smith said lottery officials will do all they can to make sure scholarships continue to be funded.

"That's provided a way for a lot of kids who would not have had the opportunity to go to college," Smith said.


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5 comments. Last comment 12 years ago by LOTTOMIKE.
Page 1 of 1

United States
Member #379
June 5, 2002
11296 Posts
Posted: April 18, 2005, 9:45 am - IP Logged

SC (and NC) need to join Lotto South.

    Todd's avatar - Cylon 2.gif
    Chief Bottle Washer
    New Jersey
    United States
    Member #1
    May 31, 2000
    23715 Posts
    Posted: April 18, 2005, 10:38 am - IP Logged
    Quote: Originally posted by CASH Only on April 18, 2005

    SC (and NC) need to join Lotto South.


    Check the State Lottery Report Card
    What grade did your lottery earn?


    Sign the Petition for True Lottery Drawings
    Help eliminate computerized drawings!


      United States
      Member #1826
      July 11, 2003
      2645 Posts
      Posted: April 18, 2005, 4:53 pm - IP Logged

      Lotto South would be a great fit for South Carolina. But I still think NC should go in-state.

      (insert signature here)

        Tnplayer805's avatar - G 14_v78828750_Small.JPG
        North Dakota
        United States
        Member #13397
        April 5, 2005
        1623 Posts
        Posted: April 18, 2005, 7:01 pm - IP Logged

          If you look at the SC winner's link most of the people who win are from NC. 

          United States
          Member #7853
          October 15, 2004
          11350 Posts
          Posted: April 22, 2005, 3:50 am - IP Logged