North Carolina Education Lottery Executive Director Alice Garland recently told members of a legislative oversight committee that “digital instants,” offered in Georgia, Kentucky and Michigan, could generate an additional $130 million in new revenue over five years. Garland also told the legislators, “Lottery staff believes that it is a good way to engage millennials. It’s a good way to kind of be where our prospective players are, and it would be a positive step forward.” She noted vendor bidding and ticket development for digital instants would take nearly two years.
Digital instants are electronic scratch-off tickets that allow players to win cash prizes via their computers or smartphones. Tickets are paid for using debit cards or checking accounts. The state lottery already lets players buy tickets through its website for large jackpot drawings.
Under North Carolina law, the state lottery commission may approve any game offered in another state, but lottery officials frequently seek lawmakers’ approval of proposed expansions.
Digital instants originally were proposed at the lottery commission’s December meeting but were taken off the table due to opposition from organizations representing social conservatives. Retailer groups also opposed the idea, despite lottery data indicating retail sales grew after digital instants were introduced in other states.
House Majority Leader John Bell said if the lottery went forward with digital instants, lawmakers could pass legislation placing additional restrictions on the lottery. “I think it’s going to cause a lot of concerns, a lot of angst in this building. If it’s not handled the proper way moving forward there will be legislation coming out of this building that could actually hurt the lottery,” he said. He added expanding online sales could “cause a big disruption” where video sweepstakes games are offered, although Garland pointed out the games are not similar.
State Senator Jerry Tillman said he believed online lottery sales would not hurt brick-and-mortar lottery retailers. “You increase the sales, you increase the money that goes to education. I don’t have a fear of us doing anything that would hurt the lottery,” he said.
Lawmakers also noted the lottery’s introduction of Carolina Keno last fall did not meet expectations. The lottery recently lowered projected net profits for education from keno for this year from $11.2 million to $6.7 million. Garland said last month the lottery told about 250 keno outlets they were not meeting sales targets and now keno equipment is being removed from those that didn’t show improvement. She said the lottery is increasing its efforts to recruit more keno retailers.
Since the North Carolina Education Lottery began in 2006, sales have grown annually to $2.4 billion last year, raising $622.5 million in net earnings for education. Garland said the lottery anticipates record profits in the current fiscal year.
