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Appeals Court rules in favor of N.C. Lottery

Mar 19, 2008, 9:59 am

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North Carolina Lottery

Ruling leaves open possibility of N.C. Supreme Court appeal

The North Carolina state lottery is safe for now.

The N.C. Court of Appeals on Tuesday upheld a lower court's dismissal of a suit that challenged the way North Carolina's lottery was established.

The lawsuit, filed in 2005, contended that the lottery is a tax and didn't go through the procedural requirements in the legislature for new taxes.

The state disagreed, arguing that it makes a profit on the sale of lottery game tickets.

Plaintiffs included state Rep. Paul Stam, an Apex Republican; the N.C. Family Policy Council and the Wake County Taxpayers Association.

In his opinion for the three-judge panel, Judge James Wynn Jr. said the Lottery Act was not a bill "enacted to raise money on the credit of the State." Wynn also wrote that the lottery was not created to to pay any debt.

Judge Ann Marie Calabria disagreed, saying the state is essentially indebted to prize winners.

The opinion defines a revenue bill as any legislation that raises money on the credit of the state and pledges the faith of the state for the payment of a debt.

Calabria's dissent leaves the window open for a review by the N.C. Supreme Court.

Jack Holtzman, an attorney for the plaintiffs, said an appeal is under consideration.

"The decision misinterprets the appellate case law," Holtzman said.

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