Lottery director Tom Shaheen told the state Lottery Commission on Wednesday that ticket sales for July, August and September, the lottery's fiscal first quarter, were below projections. The lottery sold more than $221.7 million worth of tickets during that period. Its goal was $239.4 million.

Lottery tickets first went on sale in North Carolina in March 2006. Sales have been sluggish as many players have been frustrated that the tickets didn't pay as much as similar games in neighboring states. In September, the governor and legislature allowed lottery officials to put more money toward prizes. The goal was to generate more sales and to bring in more money for education.

Shaheen said some recent trends suggest players are coming back.

"They are starting to recognize they are paying out more," Shaheen said.

One of the lottery's holiday-themed games, $1 Holiday Cash, is about to sell out of its six million tickets. The holiday raffle, in which players buy a limited number of tickets for cash drawings, is outpacing sales of similar raffles in Georgia, Tennessee, Virginia and South Carolina. In recent weeks, sales of new games appear to be up.

Gov. Mike Easley said this week that he is confident that sales will grow.

"I've got a lot of confidence in Tom Shaheen, and he has a good business mind," the governor said. "You crank up a billion-dollar business in three months and you're not going to be right on target with your predictions."