Rolling the Dice

By Bruce Buchanan

On March 30, 2006, North Carolina rolled the dice and officially got into the gambling business with a long-awaited and highly controversial state lottery to fund schools.

More than 5,000 convenience stores and other outlets from the Outer Banks to the Smoky Mountains began selling scratch-off lottery tickets to lines of eager patrons. Mike Easley, the state’s two-term Democratic governor, made the lottery a cornerstone of his platform and had worked for years to obtain its passage.

Under Easley’s plan, 100 percent of net lottery proceeds are earmarked for educational purposes, including class size reduction in the early grades, pre-kindergarten programs, school construction, and college scholarships. And the connection between the lottery and the schools was symbolically apparent that opening day, as State Board of Education Chairman Howard Lee purchased the first $1 ticket.

Like many lottery proponents, Easley, Lee, and others touted the games as a surefire means of significantly boosting revenue for schools. But the results over the past 14 months have been less than spectacular, and revenues for the first year were $75 million less than supporters originally expected.

Despite the hype about lotteries enhancing the coffers of school districts, the benefits often are similar to North Carolina’s. Without question, lotteries produce big bucks --  nearly $14 billion nationwide in 2004 --  but school districts that bank on big profits are left scrambling when revenues fail to meet expectations.

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