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N.C. lottery bill limits commercials

North Carolina LotteryNorth Carolina Lottery: N.C. lottery bill limits commercials

North Carolina lawmakers are slapping limits on how much a proposed lottery can spend on advertising and what the commercials can say, but they may have underestimated both.

The General Assembly is scheduled to vote this week on a state budget that includes a lottery. The lottery would be limited to spending 1 percent of its revenue on advertising. That figure, while in line with many lotteries, may not be enough for a lottery's first year.

"When we started out, we spent 3.1 percent," said Virginia Lottery spokeswoman Jill Vaughan, "because it takes a lot to educate the public about how you play the lottery, where you buy the tickets."

The Virginia Lottery had revenue of $409 million in fiscal year 1989, its first year of operation.

North Carolina's proposed 1 percent limit was included, in part, to ease the fears of legislators who don't want a mass marketing campaign that preys on consumers. The original lottery bill passed by the House this year banned advertising except at stores or businesses selling tickets, a provision that House Speaker Jim Black insisted on.

"We have the most restrictive lottery advertising in the country," said Black, a Matthews Democrat.

After the budget vote expected today, the N.C. Senate must approve the lottery again in a separate vote. Five Democrats have voiced opposition to a lottery, but party leaders said they have the votes to pass it.

The S.C. Education Lottery spent about $7.5 million on advertising in its first fiscal year, or about 9 percent of the $80.4 million the state earned.

"You certainly want to get the message out about where the money goes and who makes those decisions," said Ernie Passailaigue, the S.C. lottery's director.

Each year afterward, the Palmetto State operated under a 1 percent cap on advertising spending.

Charles Clotfelter, a Duke University public policy and law professor, wrote in his book, "Selling Hope: State Lotteries in America," that states spend about 2 percent of revenue on advertising, more than most industries. That figure does not take into account the free advertising the games receive from televised drawings and newspapers publishing winning numbers.

The N.C. lottery legislation mandates that the ads not appeal to children. Virginia uses a similar qualification, saying the ads can't use a character that appeals to kids -- no "SpongeBob Scratch Off" games.

Many states require that the odds of winning be included, while some ban ticket sales at places such as universities and schools. A common restriction bars "inducing" anyone to play.

"What's the point of advertising if it's not to motivate behavior? So we had this kind of oxymoron," said Ken Thorson, Virginia's tax commissioner and previously the state's first lottery director. "We played up humor and did not try to play up the idea of winning big. ... We did not want to push that hard edge of trying to get people out there to buy tickets. It's a difficult line to walk."

North Carolina, already surrounded by lottery states, will face the additional challenge of abiding by content guidelines while persuading some players to change games or play in two states.

As other states' lottery sales have peaked, some marketing strategies have shifted. Thorson said Virginia ads have become more aggressive

Advertising a Lottery

  • North Carolina wants to set a 1 percent cap on lottery advertising.
  • Virginia spent 3.1 percent to advertise in its lottery's first year.
  • South Carolina spent 9 percent the first year, now limits advertising to 1 percent yearly.

Charlotte Observer

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2 comments. Last comment 11 years ago by wizeguy.
Page 1 of 1
Tenaj's avatar - michellea
Charlotte NC
United States
Member #17406
June 18, 2005
4053 Posts
Offline
Posted: August 9, 2005, 12:57 pm - IP Logged

No wonder North Carolina was nicknamed the "Rip Van Winkle State."  The house and the senate makes me tired.

 

Tenaj

    wizeguy's avatar - animaniacs04

    United States
    Member #15143
    May 10, 2005
    414 Posts
    Offline
    Posted: August 9, 2005, 3:26 pm - IP Logged

    <The General Assembly is scheduled to vote this week on a state budget that includes a lottery. The lottery would be limited to spending 1 percent of its revenue on advertising. That figure, while in line with many lotteries, may not be enough for a lottery's first year.>

    I fail to see where heavier advertising would be needed the first year. Sure not all folks keep up with the news but who in a lottery state would not shop at least one store that sells tickets and see the lottery station or the sign in the store window.

    <"When we started out, we spent 3.1 percent," said Virginia Lottery spokeswoman Jill Vaughan, "because it takes a lot to educate the public about how you play the lottery, where you buy the tickets.">

    This statement is the biggest load of bull that I've seen posted here by a lottery spokesperson (slight exaggeration, lol). I've never seen any education about how to play in any ad other than a website and how much education does it take other than to say pick at least 3 #'s of 6 etc and you win a prize... or scratch off the numbers and see what you win by the games rules printed on the ticket. Let the merchants who sell tickets educate the customers if any is needed at all.