More than 200 stores in Forsyth County have applied to sell scratch-off tickets for the scheduled start of the new North Carolina lottery March 30.
Although most of them are convenience stores and grocery chains, applicants also include a miniature-golf course, several tobacconists, at least one pawn shop and a store that sells Indian food and spices.
At one store, Blue Ridge Tobacco & Candle Outlet on Cloverdale Avenue, customers should soon be able to buy scratch-off tickets with their cigarettes, "Very Cherry" pipe tobacco and mandarin coriander-scented candles.
"We're always looking for new ways to bring customers in," said Julie Sanders, a co-owner of the store. "We really don't know until we get into it how profitable it will be."
As more stores come online, the lottery is quickly sprouting into what is expected to be a billion-dollar enterprise. Three months ago, the lottery had one permanent employee, three temporary employees and a temporary office that was marked by a sign made of a sheet of poster board with "Lottery Commission" in black marker.
It now has about 120 employees, working mostly in finance, marketing and sales, and many of them were hired just in the last week. The offices have moved to the back side of a mall in Cary, 10 miles southwest of Raleigh, on the second floor in a suburban office park shared with such companies as Texas Instruments Inc.
Still, the only signs are sheets of paper printed with "North Carolina Education Lottery."
Tom Shaheen, the director of the lottery, said that the staff continues to move quickly to meet its deadline. A priority is getting stores approved to sell tickets and getting them equipment from G-TECH Holdings, the lottery's major outside contractor.
"You have to, each day, have a steady pace of approvals and a steady list to send to G-TECH to get terminals installed," Shaheen said.
State law puts few restrictions on who will be able to sell lottery tickets. Store owners have to be at least 21 years old and must sell products other than lottery tickets. They also must be up-to-date on their taxes and not live with a lottery employee.
Lottery officials have added about 30 other restrictions, including a background check, but they have not limited sales to certain types of stores. In fact, officials said that of the 6,000 stores across the state that have applied to sell tickets, none have been definitively rejected.
"We have not 100 percent denied anyone yet," said Pam Walker, a spokeswoman for the lottery. "We have a number of people who are missing something.... They might owe as little as $17 to the Department of Revenue. We're working with them on that."
About half of the applicants in Forsyth County, including Blue Ridge, have been approved to sell lottery tickets so far, and more win approval every week.
Maybe a second register
Sanders said she's expecting brisk business and she wants to make sure that her regulars will be able to get in and out quickly without waiting for lottery lovers to pick their lucky numbers. The store may add a second register just to handle lottery sales and will likely have to increase staff, she said.
"It can be very frustrating for a customer who just wants a pack of cigarettes to have to wait for someone who is buying lottery tickets," she said as she watched a line form in front of her store's single register Thursday morning.
Every day the lottery is able to track its growth, like a height chart at a pediatrician's office. But its growth is measured in numbers rather than inches: as many as 150 terminals installed each day, new employees each week, new advertisements being prepared and $166 million worth of tickets being printed for the lottery's start.
Soon, the growth should also be measured in revenue. As of Friday, officials said that the lottery is on time to start selling scratch-off tickets March 30. Only a pending lawsuit, which has a hearing set for March 20, or unexpected problems could cause a delay.
"If it snowed for three days, that would slow down installation considerably," Shaheen said.
Lottery sales are expected to exceed $1 billion a year. After prizes and operating costs, about $425 million is expected to be divided among several education programs: 50 percent to hire more elementary-school teachers and to expand a prekindergarten program; 40 percent to help counties build schools; and 10 percent for college scholarships.
The money won't necessarily increase what the state and the school systems are spending on education. State budget-writers might cut back on their previous prekindergarten spending, and some counties are already counting on lottery money to replace revenue from property taxes.
So far the lottery hasn't taken in any money, and the focus has been on setting up the infrastructure. For each store there is a terminal that is a little smaller than a desktop computer and a satellite dish that will beam records to and from lottery headquarters.
The terminals record which batch of scratch-off tickets a store is using and keep track of the money. They will also print tickets for the multistate Powerball game, set to begin May 30. The terminal prototype plays the song "We're in the Money" whenever it validates a winning ticket, but state officials have decided to disable that feature.
"We're not going to do that," Walker said. "I think the retailers would go nuts."
Enticing more customers
M.S. Bari, who owns the First Street Mart, a convenience store in the shadow of Wake Forest University Baptist Medical Center, has his lottery equipment. He said he's counting on the lottery more to get more people into his store than to make much money.
"It brings in more customers," Bari said. "And then they buy lottery tickets and soda and cigarettes and other things."
Some retailers have been hesitant about supporting the lottery because they will keep only 7 percent of what they collect in lottery revenue, compared with much larger profit margins for other products. A study in southeastern Virginia suggested that customers often skip more profitable products to buy lottery tickets, costing merchants there millions of dollars in lost sales each year.
There can also be less risk in selling lottery tickets because retailers don't pay for them up front as they do for the rest of their products. Instead, they collect money from customers and send 93 percent to the state.
There will be four scratch-off games on opening day: two $1 games, a $2 game and a $5 game, all with different themes and odds of winning. Officials haven't released the details, warning that parts of the plan could change in the next three weeks.
Bari is already getting his advertising ready, with a big, white banner outside his store that reads: "N.C. State Educational Lottery Coming Here Soon!"
More lottery signs are expected soon across the county and state, but erecting a sign might be the easy part. In Winston-Salem and many other parts of the state, various rules govern how big, tall and close to the road a sign may be.
Businesses on roads with higher traffic volume and zoned "highway business" - Stratford Road or Peters Creek Parkway, for instance - are allowed to put up signs as large as 150 square feet, but retailers on smaller streets in pedestrian districts are limited to signs as large as 75 square feet.
Permits for installing a sign cost as much as $130, and the application process usually takes five to 10 days. Inspections officials must review the drawings. If they approve, then they will conduct a field inspection.
No applications have been submitted yet to the Winston-Salem/Forsyth County inspections department. But officials expect to see a deluge of applications for lottery signs once retailers are allowed to sell tickets, according to Ronnie Grubbs, an assistant inspections director.
"I wouldn't bet against it," he said.
At least one store owner in Forsyth County who applied to sell lottery tickets has changed his mind.
O'Brien Dixon, the owner of Kata Shoe Co. on Peters Creek Parkway, sells work boots and safety shoes. He said he initially wanted to sell lottery tickets, too, because he thought that the shoe store could make a little more money. He said his plan was to divide the profit, however small, among his employees and that it may give them a little more money to fill their gas tanks and get groceries.
But Dixon had trouble setting up a separate bank account for his store's lottery revenue, as required by the state. Lottery officials say that some bank branches initially had trouble understanding that the accounts would be "in trust" of the lottery, so that the state could have access to the accounts.
"Some branches thought it was supposed to be a trust account, and they were confused," Walker said. "When a branch manager called us, once we explained it to them, they were like, 'Oh, OK.'"
It's not clear that Dixon had the same problem, but he said that the frustration still caused him to give up on installing a lottery machine.
"I'm just tired of fooling with it," Dixon said. "I thought it would be a good idea, and I still do. I just got tried of the hassle."
Still, Dixon said he might try again in six months.