Get ready for the lottery border wars.
With the North Carolina lottery bill signed into law by Gov. Mike Easley on Wednesday, lottery operators in surrounding states said they will fight to keep their share of a couple of hundred million dollars now being spent by Tar Heels in their states.
Operators in South Carolina and Virginia say they plan to aggressively market their lotteries and to offer prizes that will make their lotteries more attractive than what will be offered by North Carolina.
They said North Carolina's new lottery law — guaranteeing that 35 percent of the proceeds will go to education — will put the state at a competitive disadvantage. They said it will allow South Carolina and Virginia to offer larger and more frequent prizes, which they can advertise to North Carolina residents living near the border.
"It's a competitive edge that we can market, and players will understand that very quickly," said Ernie Passailaigue, executive director of the S.C. Education Lottery.
"We will take advantage to differentiate our product," Passailaigue said. "Tennessee and Virginia will do the same thing. They [North Carolina legislators] will need to correct it pretty quickly if they want a lottery that achieves what they want to achieve in North Carolina. ... That's been gift-wrapped for the three bordering lotteries."
Across Lake Gaston, four miles north of the North Carolina line off Interstate 85 at the Bracey exit, are the new front lines of the lottery wars. "Play Va. Lottery Here," one sign says. "Lottery Across Bridge," says another.
Bracey's convenience store owners say they expect a big drop in sales once North Carolina's lottery starts — but not a wipeout.
"All of us are thinking about what we're going to do," said Jim Rightler, 57, the owner of Bracey Mini Mart, where 90 percent of the lottery players are border-crossers. Several Tar Heel regulars place orders by fax, on credit. Many are lured by the giant jackpots of the Mega Millions game.
"If North Carolina gets Power Ball instead of Mega, I'll be OK," Rightler said. "If you get Mega, there's no reason to come here."
Out front, one sign advertised Mega Millions' $131 million jackpot this week. Another read, "We sold a $77,777 winner!"
Rightler is philosophical.
"I didn't want North Carolina to have a lottery — but you'd be stupid not to," he said. "Everybody's playing it."
Easley signed the lottery law in the Old House Chambers on Wednesday. As dozens of legislators, educators and administration officials watched, Easley said passage of the lottery caps "a great year for education."
The governor said he expects the first part of the lottery, probably scratch-off tickets, to be ready in five months. Big-dollar games such as Power Ball or Mega Millions would come later.
Easley has said he hopes the lottery will raise $500 million a year for education.
Easley said he would ask the legislature next year to pass a constitutional amendment restricting the use of lottery proceeds to education. The lottery bill designates that 35 percent of the proceeds go to education. Of that amount, half would be used to reduce class sizes in the early grades and to help pay for preschool programs, 40 percent for school construction and 10 percent for college scholarships.
Easley said he would move quickly to make his appointments to the nine-member lottery commission.
Money leaving state
A large number of North Carolinians have already been playing the lottery.
Virginia lottery officials estimate that 7 percent to 10 percent of the $1.3 billion in annual revenues from its lottery, or as much as $130 million, comes from North Carolina residents.
South Carolina officials estimate that about 12 percent of the $1 billion its lottery brings in, or about $120 million, comes from North Carolinians. Ten of South Carolina's 12 largest lottery retail outlets are in York County, which borders Charlotte.
About 30 percent of South Carolina's lottery revenue goes to education, Passailaigue said, but it is adjustable and not mandated by law. Virginia has a goal of earmarking 32 percent of the lottery revenues for education, but it is not a law.
Warrenton car mechanic Archie Perch, 31, said he buys tickets at Rightler's store every day, even though he really can't afford to. Perch said he plans to play the lottery in both states.
"It's twice the fun, and twice the chance to win," he said. "I think it's great."
Perch said he has won about $10,000 over the years.
And how much has he spent to get it?
"Ain't no telling," he said. "I really don't pay attention to how much I've spent. But you can't win it if you ain't in it."