Lawmakers looking for more ways to bring in revenue and target younger players

By Kate Northrop

In an effort to increase state revenue and target younger generations, South Carolina lawmakers introduced a bill that, if passed, would allow residents to purchase lottery tickets with debit cards.

The South Carolina Education Lottery is a hot topic in legislature this year, with discussions about whether lottery revenue should fund private education taking place at the same time a bill allowing lottery ticket purchases with debit cards is getting pushed.

As of now, South Carolina is one of three states that only permit lottery purchases with cash, something state legislators say is greatly outdated.

"I can't imagine how much sales we're losing at gas stations along our interstates — people out of state stopping, grabbing a Coke, wanting to buy a ticket; all they have with them is a credit card or a debit card," South Carolina Lottery Executive Director Dolly Garfield said at a state hearing last week. "They don't have cash, and they leave the sale there."

Lottery officials say that the lack of payment options beyond physical dollar bills is causing the agency to lose out on millions of dollars in revenue, as well as interest from younger would-be players who may have decided to buy a ticket had the payment options been more convenient.

"We are seeing that our players are getting older and older, and the younger generation tends to not carry cash," Garfield contended. "Please let us do this so that we can perhaps grow our player base and offer these games to the younger generation."

According to the Lottery Commission, a survey of South Carolina residents found that 430,000 people who did not play the lottery would if there were an option to pay with a debit card. Those additional players alone are estimated to rake in $186 million in annual revenue. Of that amount, $52 million would be transferred to the state every year, while the rest would be paid out to players in prizes.

Senate Bill 169 aims to amend current state law by annulling the rule that all lottery transactions must be completed using cash only and by removing the ban on debit card payments. Check, credit card, charge cards, and all other forms of deferred payment will still be prohibited, and all lottery purchases must take place in person at licensed retailers. Lottery courier services are also prohibited, the bill reads.

The bill has unwavering support from Governor Henry McMaster, who emphasized the educational benefits that would not have otherwise been possible had it not been for additional lottery revenue.

"A lot of young people have gotten educated that would not have gotten educated without it [lottery revenue].... If we don't allow this, then the chances of that program doing what it was designed to do to begin with are dim," McMaster argued.

There doesn't seem to be much pushback against the bill in either the House or Senate — many lawmakers are rather open to the idea of generating additional dollars for the state. Some motivation may correlate with the other lottery-related bill circulating in the House, which proposes funding a voucher program that would allow parents to use state funds to send their children to private schools.

Despite that, there are still some voices opposing the move, including Sue Berkowitz, the Director of the S.C. Appleseed Legal Justice Center, an organization that advocates for low-income South Carolinians.

"So many folks in South Carolina are already struggling," Berkowitz reasoned. "It's hard to keep up with rising rent and cost of food and health care. It's a problem because it allows people to make an impulse purchase."

Nevertheless, Lottery officials are pointing to the numbers and trends they've witnessed to demonstrate that change is in order, and that the state must keep up with the times if they are to guarantee longevity.

While lottery profits have generally seen a range of $500 million to $600 million per year, Lottery officials forecast that the figure might dwindle to $450 million by fiscal year 2027. Since the state awarded $426 million and $415 million in scholarships during the 2022-2023 and 2021-2022 school years, respectively, the closing gap between profits and education aid implies that the state could be in danger of either stagnating or pulling back on benefits.

The bill was introduced in the Senate on Jan. 14 and was subsequently referred to the Committee on Education for review. The Committee may hold additional hearings related to the bill, make amendments, and/or vote on whether to report it favorably to the full Senate.