Editorial Slams North Carolina Lottery

I'll slam a state lottery if it deserves it. But I will defend a lottery if it is unfairly criticized.

A recent (unsigned) editorial in the Daily Tarheel, the student newspaper at the University of North Carolina, the writer states the North Carolina Education Lottery (NCEL) “doesn't deserve education in its name" (because) “the amount of lottery revenue that actually goes to education has been falling. In 2007, 35 percent of the money made off of the lottery went to schools. In 2012, schools only received about 30 percent of the proceeds." The editorial goes on to say, “If North Carolina continues to give less and less of that money to schools, then is the lottery really serving its purpose? Why brand the lottery as a benefit to schools, only to chip away at the money schools actually receive?"

The writer really needs to go to a simple Finance 101 class at school and also retake a journalism class where they learned about the value of thorough research on the subject.

The bottom line is, you can’t spend a percentage. Like most lotteries, the NCEL has found that by reducing the percentage of what they keep, and returning the additional percentage to the players in the form of higher payouts, they can generate increasing profits. While the NECL returned less as a percentage in 2012 vs 2007, they returned more dollars. 2012 saw record setting transfers to education in North Carolina. From page 25 of the NCEL’s 2012 Annual Report we see, “North Carolina General Statute Section 18C-164 (a) requires the NCEL to transfer net proceeds from operations and any prior year surplus to the State of North Carolina four times a year. In fiscal year 2012, the sum total of these four cash transfers was $456.8 million, the largest annual total for cash transfers in NCEL’s history. Total cash transfers for fiscal years 2011 and 2010 were $446.9 million and $419.5 million, respectively.”

The Daily Tarheel needs to retract and apologize for the mistake.