Lottery Official Estimates Lower Revenues

Special Report - October 22, 2008
In a North Carolina Lottery Commission teleconference this morning, lottery director Tom Shaheen told commissioners that he anticipated at least a $16 million drop in lottery revenues next year. Citing key economic factors like escalating gas prices, high unemployment, and an unstable stock market, Shaheen said it was very difficult to predict what may happen in the future, and that lottery officials were “trying to conservatively estimate where we might be in such an unsteady economy.” Nonetheless, he briefly reviewed with commissioners an estimate of $1.252 billion in ticket sales for the next fiscal year, which runs from July 1, 2009 to June 30, 2010. This represents a $16 million decrease from the current year’s gross revenue estimate of $1.268 billion. Shaheen also told commissioners that this reduction would result in $375.8 million being transferred to education in the 2009–2010 fiscal year, $10 million less than is expected in 2008–2009.

In addition, the lottery director announced the likely addition of a four-digit daily game similar to the existing “Pick 3” and “Cash 5” that would begin in September 2009. He stated that Pick 3 was outperforming other states’ three-digit numbers games since the lottery added an afternoon drawing but said adding a four-digit daily game could “cannibalize” ticket sales for Pick 3 and Cash 5.

“The most notable part of the lottery’s revenue estimate is not the decrease in anticipated ticket sales, but the continuing decline in the percentage of lottery revenues dedicated to education,” said John Rustin, director of government relations for the North Carolina Family Policy Council. “According to Mr. Shaheen’s numbers, only 30 percent of gross lottery revenues would be dedicated to education in 2009–2010. This is a sharp reduction from the 35 percent required when the General Assembly passed the Lottery Act in 2005. Although this law was changed recently to provide ‘flexibility’ to the Lottery Commission, a five percent reduction in net revenues earmarked for education equates to over $62 million that will not make it to our public schools.”

Copyright © 2008. North Carolina Family Policy Council. All rights reserved.