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Coronavirus impacting North Carolina lottery sales

Apr 17, 2020, 12:06 pm

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North Carolina Lottery

The North Carolina Education Lottery has increased sales — which climbed to $2.6 billion in 2018, according to the North American Association of State and Provincial Lotteries — every year since it was established in 2005.

A global health crisis could change that.

As the number of coronavirus cases continues to climb across North Carolina and Gov. Roy Cooper weighs extending a statewide stay-at-home order, the lottery is experiencing a marked decrease in players.

That's in part by design, officials say.

"Here in North Carolina, just like many other businesses, we are putting safety and public health first and making adjustments in our business operations with that in mind," N.C. Education Lottery spokesperson Van Denton told McClatchy News.

Changing operations

The lottery suspended all marketing and advertising campaigns starting April 7 to keep people from making "an unnecessary trip to a store just to buy a lottery ticket," according to a news release.

Before that, they closed six claim centers in Asheville, Charlotte, Greensboro, Greenville, Raleigh and Wilmington.

Essential employees are still going to work at the lottery headquarters in Raleigh — but everyone else was sent home to work remotely starting March 12, the news release states.

Players who win $599 or less can pick up their prizes in-store, officials said.

"Lottery tickets with prizes of $600 or more should be signed and secured safely," according to the release. "Winners will have 30 days after the state lifts its stay-at-home order to claim prizes on those tickets if they expire before then."

They can also mail in their claims, Denton said. But officials warned there could processing delays for those mailed.

By the numbers

Lottery sales and subsequent contributions to education were "running ahead of projections overall through (the) end of February," Denton told McClatchy.

According to data collected by The Raleigh News & Observer, ticket sales increased for the month of March.

Then COVID-19 hit.

Lottery officials expect to lose $131.4 million in sales for the 2020 fiscal year, which runs from July 2019 to June 2020, according to a report made to the Lottery Commission during its April 7 meeting.

That means similar losses for education, data show.

Denton said the lottery projects the total amount raised for education this year will be about $26.8 million less than expected.

"That could change depending on what happens in May and June with our 'Stay At Home' guidelines and how consumers adjust their budgets based on challenging economic times for many," he said.

During the 2018-2019 academic year, officials said more than $700 million in lottery funds were given to education.

The total contribution for the 2019-2020 fiscal year is estimated to be around $667 million, according to the report.

It's not immediately clear how that will impact some of the education projects that traditionally receive lottery funding — such as pre-K programs, school construction and college scholarships.

"The lottery does not decide how the money it raises is used," Denton said. "It will be up to the governor to manage the state's budget to decide how any shortfall would impact the education programs this fiscal year."

Uncharted territory

There is a lottery reserve fund with about $55 million sitting in it, Denton told McClatchy. But it's up to the state how and when that's used.

When the recession hit in 2009, then-Gov. Bev Perdue "diverted $50 million in lottery proceeds to the General Fund to make up for a budget shortfall," EducationNC reported.

People were angry there was nothing in place "safeguarding lottery funds for strictly educational purposes," according to EducationNC. Perdue said it was justified given that half of the General Fund goes to education.

But things are different this time, Denton said.

"Lottery ticket sales in North Carolina continued to grow during the last recession," he told McClatchy. "I don't believe any U.S. lottery has faced a time like this before."

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