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N.C. Lottery chief adding new games to overcome revenue shortfall

Feb 1, 2007, 1:39 am

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North Carolina Lottery

The head of the N.C. Education Lottery Tuesday urged patience for critics who say the games have fallen short of their first-year sales goal.

Executive Director Tom Shaheen said he hopes to spark sales this spring with two new games and a new twist on a third.

Lottery sales are expected to miss their $1.2 billion goal by $200 million.

"Obviously I'm in a business to raise money, and I want to raise as much as we can," Shaheen said after a Charlotte luncheon. "But to raise $1 billion the first year is a big accomplishment."

Speaking to about 50 people at the Hood Hargett Breakfast Club luncheon near SouthPark, Shaheen described how he got the lottery up and running in three months and 25 days. Players have spent more than $700 million on the lottery since it started March 30.

Overall, the games are expected to generate $350 million for education in its first year. They've brought at least $9 million to Charlotte-Mecklenburg Schools.

"We've been hugely successful," Shaheen told the group.

But scratch-off sales, which drive revenues, have fallen steadily since July, from $52 million that month to less than $37 million in December. Shaheen has blamed that on a natural drop in interest as well as competition from games in every border state.

Lottery commissioner Jim Woodward of Charlotte said the initial goals were "probably unrealistic."

"I don't really see this failing to meet early estimates as evidence of any underlying problem," Woodward, a former UNC Charlotte chancellor, said Tuesday in a phone interview. "This is just the nature of any new business. ... I would not change anything we've done over the last year."

Shaheen hopes to spur sales with new games this spring:

  • A raffle game: Only about 500,000 numbers would be available. Each might sell for $20. There would be four $1 million prizes and other smaller ones. If commissioners approve the game next month, it could start in May. Winners would be drawn in July.
  • A NASCAR game: A race-themed scratch-off game could start in March. South Carolina ran a similar game in 2005.
  • Powerball multiplier: For an extra dollar, players in North Carolina and other Powerball states can get an extra number that would multiply many prizes by that figure. Now, the highest multiplier is "5." For a few weeks this spring, it will be "10."

"Ideally, lotteries have a lot of room for growth," Shaheen said. "It's just a matter of getting the right mix of products out there."

Woodward isn't worried.

"I've got great confidence in Shaheen," he said. "Everything he's done since he came to North Carolina indicates that we hired a very good CEO. Tom Shaheen knows his business (and) knows how to operate it correctly."

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