NC Lottery Law Clears Way for Internet Sales

The United States' newest state lottery could one day be the country's first to sell lottery tickets over the Internet.

North Carolina's new law enabling the establishment of a state lottery creates a framework for Internet distribution of lottery tickets, scratch games and other licensed offerings. The law went into effect Aug. 31, although most observers agree that the implementation of Internet sales is a long way off.

A nine-member state lottery commission will be appointed in caoming months to decide what kinds of games will be offered. Gov. Mike Easley, whose support of a state lottery was a key component of his campaign for election, will appoint five commissioners, while the state House and Senate will each appoint two commissioners. The nine-member panel will select an executive director, and shortly thereafter a staff will be hired and the lottery games will be created.

Rep. Bill Owens, D-Pasquotank County, estimates that it will be around six months before retailers begin selling scratch-off tickets and perhaps up to a year before other games are introduced. Internet sales are not in the foreseeable future.

"I would think, instead of reinventing the wheel, they would look at other lotteries that have been established (and) find out what's worked, what hasn't worked," Owens explained.

Senate leaders, meanwhile, have expressed a desire for North Carolina to join the Powerball lottery.

Revenues will be allocated as such: 50 percent to pay prizes, 7 percent for compensation of lottery retailers, 8 percent for operating expenses and 35 percent for the Education Lottery Fund. Within the education fund, 50 percent of proceeds will support the reduction of class size and pre-K programs for at-risk children, 40 percent will go to new school construction and 10 percent will go to college scholarships.

North Carolina was not the first U.S. state to consider legislation allowing the sale of lottery tickets over the Internet; Legislators and/or regulators in Texas, Georgia, Illinois and Tennessee (which also established its lottery in 2005) have also discussed the idea.

The Texas initiative had no legs in the legislature, while a Georgia bill awaits action until 2006. (Georgia's part-time legislature recessed before action could be taken in 2005.) An Illinois bill, meanwhile, is working its way through the state legislature; a series of hearings on the bill were conducted in late spring and early summer.

Click here to view a copy of North Carolina HB 1023.