Easley vows to perk up lottery

Gov. Mike Easley has a lottery itch he hopes players will scratch.

Faced with lagging sales, Easley wants to pump up prizes and spark a spending spree on North Carolina's instant ticket scratch-off lottery games starting this summer.

But numbers from other states suggest the governor's plan isn't a sure thing. And if it doesn't pan out, some of his key education programs would again face cuts or need taxpayer help to make ends meet. That is the situation this year after the lottery missed its goals.

Easley, a Democrat, is betting more prizes will cause a one-year sales jump that's much greater than what other states experienced when they tried the same thing in recent years.

Under the Easley plan, sales of instant tickets, the lottery's bread and butter, would increase by 101 percent in one year because of more prizes.

But when California increased its prize payout nearly 10 years ago, the sale of lottery tickets increased by 41 percent. New Mexico increased its prize payout in 1999 when its lottery was still new. Lottery sales jumped by 56 percent. Florida had similar results when it bumped its prize payout in 2002.

Philip J. Cook, a Duke University economics and public policy professor who has studied the lottery industry, said a one-year prediction is difficult to make, especially because North Carolina has just started its lottery.

"But there is a real question as to whether they would get the kind of bounce they expect from this," Cook said.

Lottery Director Tom Shaheen said he thinks it's possible that players could double what they have been spending, but he also acknowledged it might not happen. "To be honest, it won't be easy to get there," Shaheen said.

Several education programs depend on the lottery's proceeds, including teacher salaries in lower grades and Easley's More at Four program for nearly 20,000 4-year-olds identified as needing help before schooling.

Sales from the $1, $2, $5 and $10 tickets -- with names such as "Cash on the Spot" and "Downhome Dollars" -- also provide money for school construction in every county and for college scholarships to students from households that qualify as in need of aid.

The education budget that Easley has outlined relies on instant-ticket sales jumping from $500 million to slightly more than $1 billion in the next fiscal year, which begins July 1.

Easley's plan says overall lottery sales, which also includes Pick 3, Cash 5 and Powerball games, would reach $1.5 billion, a 50 percent increase from the lottery's first year.

If the lottery misses that target, those programs will have to be trimmed or officials will have to divert taxpayer and reserve money to plug gaps.

Easley said he has looked to lottery officials for guidance on what's possible and is hopeful the big increase can happen.

"If we give back more in prizes, as a result of that, we'll take more money in," Easley said in a recent interview.

The state's lottery commission, charged with oversight of the games' operations, hasn't taken a position.

Chairman John McArthur said the commission will likely study the issue and adopt the lottery's goals in May, which he said would be in time for lawmakers to take note.

Behind the numbers

Shaheen, the lottery director, came up with the number for Easley's plan. It's based on sales in neighboring states, which pay out more in prizes than North Carolina does.

Under the Easley plan, instant ticket payouts in North Carolina would increase from an average of about 53 percent of sales among all the scratch-off games now to about 63 percent. The payouts in drawing games, such as Powerball and Pick 3, would not change.