North Carolina lottery takes step toward more online sales

RALEIGH, N.C. (AP) — North Carolina lottery leaders took a key step Tuesday toward expanding online sales, but left themselves a way out if they aren’t satisfied with the details or face opposition from brick-and-mortar retailers or politicians.

The state lottery commission voted for the idea of offering “digital instants” through the lottery website without yet officially directing that these online games begin.

Lottery leaders have talked for more than two years about these online games, which supporters say could bring in new revenues as growth in some traditional lottery games has slowed or failed to meet expectations.

“We’re seeing some other games that we generally rely on a great deal dissipate,” commission member Morgan Beam said at the quarterly meeting. “We’ve talked for hours on end ... I don’t see that path without some technological advancements in different types of games.”

Essentially the electronic equivalent of scratch-off tickets, digital instants allow players try to win big cash prizes from their desktops or smartphones. A commission subcommittee already has been looking at digital instants, which now are played in five other states. The North Carolina lottery already lets players buy tickets through its website for big biweekly or daily jackpot drawings. Gamblers can pay to play by using their debit cards or checking accounts.

A preliminary report by lottery fiscal staff projects digital instant sales could reach $780 million annually in its fifth year. The North Carolina Education Lottery sold nearly $2.9 billion in tickets during the last fiscal year, resulting in $708 million for public education — both records.

Commission members voted to direct lottery staff to present a business plan soon for digital instants that includes staffing needs, sales details and a timeline. They also want to hear from retail groups in the handful of states that already have such online games about whether they hurt in-person sales at grocery and convenience stores. Commissioners said a final vote to offer the games to the public still would be required.

The lottery presented data showing scratch-off ticket sales have kept growing in states that have also introduced digital instants. But the North Carolina Retail Merchants Association told commissioners it’s not convinced, saying lottery sales in states without digital instants are growing at or above what lotteries with digital instants are doing.

“If a current lottery player can sit at their residence on a Saturday and play an online lottery game over and over without leaving the comfort of their home, then traditional lottery retailers will eventually lose sales to this activity and it will be too late to reverse course,” association president Andy Ellen wrote.

While North Carolina law says the lottery can approve any game that another state lottery already offers, state legislators have been divided on the digital instant idea and could prohibit it if they’re unhappy with any commission plan. Still, the legislature this year directed the lottery commission to study the feasibility of expanding gambling to sports betting and steeplechases.

Social conservatives and other gambling opponents also are worried the digital instants look too much like illegal video sweepstakes games, which legislators and law enforcement have tried for years to root out of the state. Lottery officials take issue with any similarities. Current online sales require minimum-age verification and set limits on money transfers to ticket-purchase accounts.

Commission members are chosen by legislative leaders and the governor.

By GARY D. ROBERTSON