Lottery head leaves, still uneasy

Charles Sanders was a strong opponent of a lottery in North Carolina when, last year, he accepted a request from Gov. Mike Easley to oversee the start of the games.

Now, as he steps down after a one-year term as chairman of the commission that oversees the lottery, Sanders says he is proud of how the games began -- but also concerned.

Sanders said in an interview Tuesday that a year in charge has not changed his broad opinion of the games.

"My views are still the same: It's a questionable way to raise money," Sanders said. "But my role in this was that we have it -- so let's do the best we can with it."

Sanders said he is proud of hiring people he believes are top managers to run the games -- such as executive director Tom Shaheen -- and of getting the games started quickly.

But he expressed unease that:

* Leaders in cities and counties across the state are expecting too much from the lottery.

"They think it's the answer for their funding prayers for all the schools -- and I don't think that's the case," Sanders said.

He pointed out that the lottery is expected to generate $425 million for a variety of education programs, while the state will spend almost $10 billion this fiscal year on education.

* Some people are using limited discretionary money to play the lottery.

"And it's something they can't afford to do," Sanders said.

* It will be difficult in the future to ensure lottery proceeds pump up education funding instead of replacing what's spent now.

"That one is going to be hard to measure five, six, 10 years down the line," Sanders said.

In a letter to fellow commissioners sent late Monday announcing his resignation, Sanders said the people of North Carolina must make sure lottery funds are "truly additive and not supplanting existing funds in the years ahead."

Sanders said Tuesday that a lottery in North Carolina was probably inevitable -- competition from neighboring states was intense and pressure from residents in favor of the games would only continue.

Sanders said it's not the lottery's role to prevent people from playing, nor does he think it's possible to control where outlets are located. Many sales locations are in poorer areas and are concentrated in low-income counties, lottery data show.

"If you offer it, you have to offer it across the state and to everyone who wants it," Sanders said. "It's going to be a fact of life.

"But I also believe it is very important for people to know what the odds are of their winning -- and they're long."

Sanders, who is a doctor, a one-time U.S. Senate candidate and the former chief executive at Glaxo Inc., had said all along that he did not want the job for more than a year.

His tenure was marked by controversy at first and, later, a swift rollout of the instant ticket and Powerball jackpot games.

Sanders was in charge as revelations surfaced about the efforts by a lottery company, Scientific Games, to influence the legislature's creation of the lottery and its efforts to seek contracts to run it.

The reports prompted state and federal investigations.

One lottery commissioner, Kevin Geddings of Charlotte, resigned and was later indicted on federal fraud charges after reports showed a long-standing relationship with Scientific Games that had paid him more than $200,000 from 2001 to 2005.

Two other commissioners resigned, too, citing other reasons. Sanders created an ethics policy for commissioners that is stricter than one set by the legislature.

He also oversaw the hiring of Shaheen, recruiting him from the New Mexico lottery. The games began four months after Shaheen started.

"With all the things that went on -- with all the doubts expressed, with losing three commissioners along the way -- we did pretty well to survive that and get the lottery up and going," Sanders said.

Linda Carlisle, a commissioner from Greensboro, said Sanders' influence will be missed.

"I can't imagine that we could have a had a better first chairman," she said.

Easley will appoint a new chairman but did not make an immediate announcement. John McArthur, a Progress Energy executive and Easley appointee to the commission, is the current vice chairman.