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Will NC Lottery players move online and hurt retail stores?

Dec 4, 2017, 8:51 am

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North Carolina Lottery

The N.C. Retail Merchants Association wants legislators to put the brakes on a proposal to offer online instant lottery games, arguing the move could harm stores that sell lottery tickets.

The N.C. Education Lottery Commission has the proposal for "online instant" games on its Tuesday agenda; lottery spokesman Van Denton said the commission will vote on whether to ask vendors to submit proposals for how they'd provide the online games. The commission's Revenue Generating Committee, led by former state Sen. Tony Rand, voted in October to move a discussion on the online games to the full commission.

"This is a major shift in policy and strategy for selling lottery tickets that we feel is deserving of a more thorough dialogue amongst the Oversight Committee and the General Assembly as a whole," Retail Merchants Association President Andy Ellen wrote to legislators this week in a letter obtained by the Insider. "Mobile and online gaming will negatively impact brick-and-mortar retailers across the state just like any other e-commerce business. The state and cities risk the loss of sales tax dollars because lottery customers buy more items at the store than those customers who do not play the lottery. Those related sales and tax revenues will be lost as players stay at home to play games on their mobile phone, tablet or other mobile device."

Denton pointed out that three other states — Michigan, Georgia and Kentucky — already offer online instant games, and lottery sales at retail locations have continued to increase. North Carolina already has an online subscription service for draw games like Powerball and Mega Millions, which was opposed by the merchants' group when it was launched.

N.C. Lottery Director Alice Garland briefly explained online instant games at a legislative oversight committee meeting recently, saying that players would buy tickets online and could immediately find out if they've won a prize. She said the proposal could increase revenue by $130 million over the first five years.

Some have compared online instant games to the internet sweepstakes parlors that legislators have sought to ban in recent years. In the sweepstakes games, customers would buy prepaid Internet time that comes with points to use in sweepstakes games offered by the Internet provider. The games, with names like "Slots and Stripes," offer players a chance to instantly find out if they've won cash prizes.

Denton said online instant games offered by a state lottery would be substantially different, likely including limits on how much money players can spend and a ban on credit card purchases. "We're committed in all of our sales... to study and understand what would make someone play more than they should," he said.

"In the end, you have to be where the consumers want you to be," Denton said. "Everything's going digital, and the lottery industry is not going to be immune to that."

The Lottery Commission has the authority to add online instant games because state law allows the lottery to offer games available in other states without first seeking legislative approval.

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