By Hunter Hines
Christian Action League
February 18, 2016
RALEIGH – Last Thursday (February 11th), Lottery Commission staff argued before the Joint Legislative Oversight Committee on the North Carolina State Lottery, for an increase in lottery advertisement. They believe the increase is necessary to make the games more profitable.
Although the North Carolina Education Lottery has done well since enacted in 2005, according to lottery officials, it hasn’t done as well as neighboring state lotteries.
Alice Garland, executive director of the N.C. Education Lottery told Time Warner Cable (TWC) News she’s determined to change this and says it will take an increase in lottery advertising to cause more people to play. “[O]ur budget is restrictive and what we can say in our ads is restrictive,” said Garland.
Rep. Paul Stam (R-Wake), a long-time opponent of the state’s lottery, however, disagrees. Stam told TWC News, “They would get more people to gamble, but why do you want to hoo-doo your own citizens.”
Stam and Rep. John Hardister (R-Guilford) have written a document together titled, Deception and the NC Lottery, which clearly shows current lottery advertising is disingenuous. The paper was for the Legislative Oversight Committee’s considerations.
In the document, Stam and Hardister contend: “Last month there was a Powerball jackpot drawing that significantly exceeded any lottery jackpot seen before in the United States. By the time of the drawing on January 13th, Powerball, the NC ‘Education’ Lottery, and many news and media outlets advertised the estimated grand prize at $1.6 billion. However, the actual winnings for the prizes taken were $983 million…News outlets perpetuated this misinformation using headlines or statements in articles referring to the $1.6 billion jackpot. But there were never more than 983 million jacks in the pot. The operators of Powerball and the NC Lottery understand that the greater the advertised jackpot, the more people will be enticed to purchase tickets. The news media understands that a larger advertised prize will bring more readers, and thus more advertising revenue. The sad reality is this sort of advertising amounts to intentional deception. The individuals and families of North Carolina suffer from it.”
Stam and Hardister also point out that the Lottery’s deceptive advertising is not simply limited to inflated “jackpot” values. “The NC ‘Education’ Lottery advertises the odds of winning, but does not transparently match the odds to the particular prize. The Lottery will list the value of the jackpot or highest few prizes, but advertising the odds of winning any prize, including the lowest-value prize.”
The two lawmakers demonstrate that when the January Powerball game was being advertised, “the lottery described the odds of any prize from one ticket as about 1 in 25.” But the website for the North Carolina Education Lottery didn’t state which prize. Most likely, they say, it would be a $4 prize.
“Most gamblers are aware that the odds of winning the ultimate jackpot are much lower (about 1 in 292 million), but most gamblers are not aware that their odds to win even the $100 prize were only about 1 in 14,494!” they write.
“It is no surprise that the ‘potential’ for winning the record [though exaggerated] jackpot corresponded with record Powerball sales in the State of North Carolina. What this really means is that a record number of North Carolinians are being enticed by the deceptive tactics of the NC Lottery Commission…to throw away their money on a highly regressive tax…” the two lawmakers claim. “Lottery gamblers disproportionately have lower incomes and less education. They are enticed to spend money for a reward they are much less likely to receive than they even imagine. If this were a private swindle it would be banned by the Federal Trade Commission. But since Lotteries are run by the States they avoid those rules.”
Stam and Hardister likewise contend that the lottery does not substantially fund state education. The lottery revenue budgeted for public education is approximately, $529,902,000, which is only a drop in the bucket of the $10.43 billion estimated funding for NC public education. That amounts to about 5% of the education budget.
There are currently seven states in the United States that have no lottery: Alabama, Alaska, Hawaii, Mississippi, Utah, Nevada, and Wyoming, but figures clearly show these states actually spent more per student on education than states like North Carolina that have a lottery.
“Every argument we ever made against this woefully deficient and immoral means of raising money for education before it finally succeeded in North Carolina, have proven true,” said Dr. Mark Creech, executive director of the Christian Action League. “We contended then that once the lottery was approved there would always be an effort to extend it, to broaden it, to widen its reach. But the science shows over and again, there is no greater example of a failed government policy than state-sponsored gambling. It is grossly dishonest. It harms our state’s citizens, treating many of them as some form of collateral damage. It hasn’t delivered on its promises. Why throw more money toward a failed government policy?”
During the last session of the North Carolina General Assembly, the Senate’s version of the state’s budget provided for an expansion of lottery advertising by 50% and also initiated “E-Instant Games,” which are essentially online scratch-off tickets. The proposal was rejected in the final draft of the state budget, HB 97-2015 Appropriations Act.