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N.C. lottery director says lower payouts could hurt sales

North Carolina LotteryNorth 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 11 years ago by NCPicks.
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Coastal Georgia
United States
Member #2653
October 30, 2003
1866 Posts
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Posted: March 9, 2006, 7:21 am - IP Logged

Why am I not surprised ?

 

                               

              

 

 


    United States
    Member #3676
    February 10, 2004
    425 Posts
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    Posted: March 9, 2006, 8:46 am - IP Logged

    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?

      Avatar
      New Member
      Washington,NC
      United States
      Member #31617
      February 1, 2006
      7 Posts
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      Posted: March 9, 2006, 11:21 am - IP Logged

      people will play nc lottery. will they have pick 3

        Tenaj's avatar - michellea
        Charlotte NC
        United States
        Member #17406
        June 18, 2005
        4053 Posts
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        Posted: March 9, 2006, 11:55 am - IP Logged

        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


          United States
          Member #379
          June 5, 2002
          11296 Posts
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          Posted: March 9, 2006, 12:21 pm - IP Logged

          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.

            Avatar
            New Member
            Greensboro, NC
            United States
            Member #21429
            September 8, 2005
            14 Posts
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            Posted: March 9, 2006, 10:17 pm - IP Logged

            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.

              Avatar
              north carolina/virginia
              United States
              Member #2097
              August 17, 2003
              126 Posts
              Offline
              Posted: March 10, 2006, 8:13 am - IP Logged

              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!

                Tenaj's avatar - michellea
                Charlotte NC
                United States
                Member #17406
                June 18, 2005
                4053 Posts
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                Posted: March 10, 2006, 5:20 pm - IP Logged

                SmashWent to SC today and they have signs on the registers announcing that there will be lower pay outs in NC.

                 

                takeemtothebank

                  Avatar
                  Sparta, NJ
                  United States
                  Member #18331
                  July 9, 2005
                  1977 Posts
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                  Posted: March 10, 2006, 5:41 pm - IP Logged

                  What Rocket Scientist figured out lower payouts will result in lower sales?  Can I get a copy of that brilliantly analyzed document? 

                  Cheers

                  |||::> *'`*:-.,_,.-:*''*:--->>> Chewie  <<<---.*''*:-.,_,.-:*''* <:::|||

                  I only trust myself - and that's a questionable choice

                    Tenaj's avatar - michellea
                    Charlotte NC
                    United States
                    Member #17406
                    June 18, 2005
                    4053 Posts
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                    Posted: March 10, 2006, 5:49 pm - IP Logged

                    What Rocket Scientist figured out lower payouts will result in lower sales?  Can I get a copy of that brilliantly analyzed document? 

                    SmashIt was posted for the benefit of those who had crossed state lines from NC, like I had done.  I chuckled. 

                    takeemtothebank

                      Avatar
                      New Member
                      Greensboro, NC
                      United States
                      Member #21429
                      September 8, 2005
                      14 Posts
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                      Posted: March 10, 2006, 7:23 pm - IP Logged

                      Lucky for me I guess, the company I work for makes deliveries in VA & SC. Thank God!  Once a month, 20 bucks goes north and 20 bucks goes south.  I'm still gonna send that 20 bucks up north without fail. What a bunch of idiots! I'm so embarrassed! Folks everywhere were laughing at us being the only state on the east coast without a lottery, now they're going to be laughing again. Y'know, I guess we've done it to ourselves. Someone recently posted we should call out lottery ... "we's gamblin now".......We really should. Unhappy        Bang Head        Patriot

                        Kidzmom's avatar - cold
                        NC
                        United States
                        Member #11741
                        February 23, 2005
                        1233 Posts
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                        Posted: March 12, 2006, 11:15 am - IP Logged

                        Va and SC won't lose any money off NC


                          United States
                          Member #379
                          June 5, 2002
                          11296 Posts
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                          Posted: March 12, 2006, 1:53 pm - IP Logged

                          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.

                            Avatar

                            United States
                            Member #26469
                            November 18, 2005
                            160 Posts
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                            Posted: March 12, 2006, 2:22 pm - IP Logged

                            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.