North Carolina Education Lottery - North Carolina Educational Lottery

The North Carolina Education Lottery (NCEL) is run by the government of North Carolina. It was established after Gov. Mike Easley signed the North Carolina State Lottery Act and the 2005 Appropriations Act.

North Carolina has one of the United States' youngest lottery systems, having been enacted in 2005. The North Carolina State Lottery Act created the 9-member Lottery commission who was charged with overseeing all aspects of the education lottery. 100% of North Carolina Lottery net proceeds go directly to benefit the state's education with the current figure sitting at $3.6 billion since its inception. By law, lottery funds go to paying teacher salaries for grades K-3, school construction, need-based college financial aid, and pre-kindergarten for at-risk four-year-olds. The State Lottery Act outlines how each and every dollar produced by the lottery will be spent. In 2012, the revenue distributions were as follows: 60% was paid out in prizes, 29% was transferred into the education fund, 7% was paid to the retailers who sold lottery tickets, and 4% went to general lottery expenses.

The controversial lottery proposal was approved on August 31, 2005, after then-Lt. Gov. Bev Perdue cast a tie-breaking vote in the North Carolina Senate.

History

North Carolina, traditionally associated with the Bible Belt, was the only state on the East Coast without a lottery. The issue divided lawmakers and the public alike. At the time, the opposition of nearly every Republican and a minority of Democratic lawmakers (consisting of progressives) made the passage of a lottery unlikely. These groups denounced the lottery as a regressive tax on the poor. However, on August 30, 2005, two lottery opponents (Harry Brown, R-Jacksonville and John Garwood, R-North Wilkesboro) had excused absences. With this known, a special vote was called, which was 24-24. Lt. Gov. Perdue cast the tiebreaking vote, signaling the way for Gov. Easley to sign it into law. The vote would have been defeated had the absent senators paired their votes.

"Education" Controversy

In February 2009, to reduce a budget shortfall, Gov. Perdue withheld approximately $88 million to fill shortfalls in the North Carolina budget. Perdue emptied the $50 million lottery reserve, also withholding $38 million allocated for a school construction budget in direct conflict with the mandate of the NCEL. This controversial move by the Governor prompted North Carolina lawmakers on March 10, 2009 to propose a name change to the NCEL, to remove "Education" from its name.

Proceeds and payouts

• Seven percent is paid to retailers as commission.
• Fifty percent is paid as winnings to players.
• Eight percent is cost-of-sales.
• The remaining 35% goes to education proceeds, broken down as follows:
  • Before any proceeds are paid, 5% of the proceeds (1.75% of the total) goes to the Education Lottery Reserve Fund to be used when lottery proceeds fall short. This fund may not exceed $100 million.
  • Fifty percent of the remainder (16.625% of the total) goes towards the reduction of class sizes.
  • Forty percent of the remainder (13.3% of the total) is used for school construction.
    • Sixty-five percent of the above (8.645% of the total) is distributed based on school enrollment.
    • The remaining 35% (4.655% of the total) is distributed to counties with effective property tax rates above North Carolina's average based on school enrollment.
  • Ten percent of the remainder (3.325% of the total) are distributed for college scholarships, to be used with the federal Pell Grant.

Originally, North Carolina's scratch tickets had an overall payout of 52%, the lowest among scratch tickets then available through US lotteries. While its $1 instant tickets continue to pay out at roughly this level, its newer $2-and-up games now have higher-percentage payouts.

The Lottery has continued to generate controversy among North Carolina constituents upset with teacher layoffs who believed the Lottery should have made up the difference.

Television

Live Lottery drawings are broadcast on these TV stations:

• WRAL-TV in Raleigh
• WITN-TV in eastern North Carolina
• WAXN-TV in Charlotte
• WILM-LD in Wilmington
• WLOS in Asheville (2011-)
• WGHP in Greensboro/Winston-Salem/High Point

There are no designated stations for the Florence/Myrtle Beach or Hampton Roads markets, both covering portions of North Carolina.

• WYCW in Asheville showed the lottery results from 2006-2011. The drawings were moved to WLOS on March 28, 2011.

Promotion

Brian Lafontaine, a 1992 graduate of Catawba College in Salisbury, North Carolina, played Gameshow Gary, described as "that cheesy announcer", in TV commercials promoting the lottery.

Available games

• Scratch-off tickets (began March 30, 2006)
• Powerball (began via NCEL May 31, 2006)
• Mega Millions (began via NCEL January 31, 2010 as part of the cross-sell expansion with MUSL)
• Carolina Pick 3 (began October 6, 2006)
• Carolina Cash 5 (began October 27, 2006)
• Carolina Pick 4 (began April 17, 2009)
• All Or Nothing (began September 7, 2014; it is unrelated to the MUSL game available in Minnesota and Iowa)

The NCEL has also sold raffle tickets.

Carolina Pick 3

Begun in 2006, Carolina Pick 3 is drawn twice daily (prior to February 27, 2011, it was drawn only once Sundays). Carolina Pick 3 draws three balls, each numbered 0 through 9. Players can wager in 50 cent increments that the number drawn is in exact order, or in any order. Another option is "50/50", which is a $1.00 bet consisting of an "Exact" wager and an "Any" wager. The final option is "Combo", which is a $3.00 or $6.00 wager (depending on whether the number played repeats a digit). A $1.00 wager on an "Exact" number wins $500 if said number is drawn; odds are 1 in 1,000).

Carolina Pick 4

Begun in 2009, Carolina Pick 4 also is twice daily (prior to February 27, 2011, it was drawn once nightly). Otherwise, it is similar to Carolina Pick 3, except it draws four digits. A "Combo" wager is a $4, $6, $12, or $24 bet depending on whether any digit repeats. A $1 "Exact" wager wins $5,000 if said number is drawn; odds are 1 in 10,000.

Carolina Cash 5

Carolina Cash 5 is drawn nightly. It draws 5 numbers from 1 through 41. Jackpots begin at $50,000, growing until there is a 5-of-5 winner. Games cost $1 each. Overall odds of winning: 1 in 9.6; odds of winning the top prize: 1 in 749,398. The payout for matching 2 of 5 numbers is $1; the other prizes are parimutuel.

Multi-state NCEL games

Lucky for Life (future)

Begun as a Connecticut-only game (Lucky-4-Life) in 2009, Lucky for Life is offered in 17 states and the District of Columbia. The NCEL joins Lucky for Life on February 7, 2016.

Powerball

Since October 6, 2006, the NCEL has been a member of the Multi-State Lottery Association (MUSL), best known for Powerball. Its jackpots start at $40 million; it is drawn Wednesday and Saturday nights.

Mega Millions

On October 13, 2009, the Mega Millions consortium and MUSL reached an agreement in principle to cross-sell Mega Millions and Powerball through U.S. lotteries then offering either game. The NCEL added Mega Millions on January 31, 2010, the cross-selling expansion date.