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North Carolina's lottery is new, and experts in the industry say it should be given time to grow. Any comparisons should take into account that other states have had time to build a player base and experiment with the types of games offered.

But something else is happening here. Consider:

* Instead of 7,000 retail outlets by now, or as many as 10,000 (Shaheen once said that could be the maximum), North Carolina has signed up about 5,800 sellers. Outlets per resident is a ratio tracked in the lottery industry.

Although more outlets wouldn't automatically mean more sales -- extra stores might just spread it around -- the number of outlets for every resident in North Carolina trails what is seen in neighboring and similar lottery states.

And it is significantly behind the saturation levels of the nation's best-selling lottery states.

Shaheen said he has been focused on the retailers that signed on when the lottery began and has not focused on recruiting retailers. He plans to soon, he said.

* The state pays less in prizes than others and doesn't have room to add much more without legislative action.

Legislators mandated that 35 percent of sales must go to education. After administrative expenses and commissions to retailers, about 52 percent of sales goes to prizes.

Other states devote more to prize payouts, many at more than 60 percent of sales.

Big prizes would help

South Carolina's lottery director, Ernie Passailaigue, wanted to run the lottery here and said he told officials in his job interview that the percentage mandate was a constraint. He maintains that offering more in prizes would boost sales and generate more money for education.

"If the players aren't winning something, they stop playing," he said.

Sales of instant scratch-off games have fallen steadily here, data show.

The lottery's first chairman, Charles Sanders of Durham, said in an e-mail message that he thinks smaller prizes are the biggest reason for the slow sales.

"While I am no expert," he wrote, "the frequency of people winning when they play is the major factor."

Shaheen said he will not lobby lawmakers for changes but is trying to direct more administrative money to prizes. New games coming to shelves soon, he said, will have larger payouts.

One possible source of extra prize money: The lottery had set aside $700,000 to pay sales incentive bonuses this year. Only $11,000 has been spent.

* The western third of the state is not in on the game.

Players in the counties west of Interstate 77 are not playing at levels seen elsewhere in the state. Some counties in the mountains have only a handful of outlets.

One reason for the low sales out west is that schools there generally do not stand to receive as much in school construction money as others in the distribution formula the legislature adopted. The formula sends extra money to counties with high property-tax rates, and the western counties tend to have low rates.

That has been an issue in Wake County, too, which stands to receive less than $9 million for construction. That doesn't cover the cost of one new school.

School leaders in the west have howled about the disparity.

"Everyone in Western North Carolina ... is upset about that," said state Sen. Martin L. Nesbitt Jr., an Asheville Democrat. "I'd never seen anything before like this that absolutely just blanked a region. You've got to fix that, and maybe we'll put our share in the pot."

Last week he filed a bill to change the formula.

He and others said Western North Carolinians do not oppose the gambling, including the lottery, on religious grounds. The state's only casino is in Cherokee.

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