Retailers gear up for lottery

Saturday, March 04, 2006 posted 10:28 AM EST

RALEIGH — Michael Snyder hopes that the decision by two Raygo Marts in Alamance County to sell lottery tickets will mean that local customers will quit driving across the state line to Virginia to purchase the tickets.

And while the customers are purchasing chances to win the lottery at either the store on Edgewood Avenue in Burlington or at the Snow Camp crossroads, they’ll also pick up a needed loaf of bread or gallon of milk.

“An individual who needed to buy a loaf of bread and a lottery ticket would tend to stop at a place that had both instead of a place that had only one,” said Snyder, who is district manager overseeing the two stores.

Already, more than 4,000 lottery retailers have been approved. That number could reach 5,000 by the time the first lottery scratch-off tickets are sold in North Carolina on March 30, said Pam Walker, a spokeswoman for the N.C. Education Lottery.

While potential lottery retailers see the benefits from selling lottery tickets and getting residual sales, they don’t see it as a windfall for their bottom line.

“It’s not really a huge revenue producer,” said Jeff Lowrance, a spokesman for Food Lion Stores, which plans to have the games in about 300 of its 490 stores in North Carolina. “We want to have it available to our customers who like to play.”

Attracting new customers isn’t the idea. Keeping them is.

“We don’t necessarily see this as something that would attract customers, but more-so to meet the desire of our current customers,” Lowrance said.

North Carolina’s new lottery law provides that 7 percent of lottery sales go to retailers. That means that a store that had $100,000 in lottery sales a year would net $7,000. If it had $200,000 in sales, it would gain $14,000.

GTECH, the vendor that is setting up the equipment for the state, will pay most of the startup costs. GTECH will pay for the computer equipment, ticket printing and satellite reception and transmitting equipment, Walker said.

Retailers have to pay a $75 initial application fee, Walker said. Retailers with more than one store have to pay $10 for each additional store. And they’ll have to pay a $15 a week telecommunications fee, she said.

In addition, they’ll have to bear any expenses involved in getting a special plug installed in their store to hook up to the electronic equipment, she said.

Snyder said he isn’t sure if he’ll need any more staff people to handle lottery customers. He said the stores would wait a little further down the line, when the training process comes around.

“We haven’t gotten into all the number crunching yet,” he said.

Lowrance said that in many cases, Food Lion stores would likely be able to handle lottery customers with existing staff. Food Lion will sell lottery tickets only at stores where there is a dedicated customer-service counter, he said.

He said the chain of grocery stories already has experience selling lottery tickets in South Carolina, Virginia and Maryland.

Later on, when the state gets involved in the multi-state, big-money PowerBall numbers game, more staff might be required to handle the demand, he said.

The number of lottery outlets in a state generally is a matter of a certain economic “equilibrium” taking place, said Ernie Passailaigue, executive director of the lottery in neighboring South Carolina.

South Carolina, which has about half the population of North Carolina had around 2,800 to 2,900 outlets when it started up, he said. Now there are about 3,500 lottery retailers.

“The market tells us it’s pretty stable,” Passailaigue said.

Walker said that four scratch-off games will be available when the lottery debuts on March 30. There will be two games costing $1 per ticket, one game costing $2 per ticket and one game costing $5 per ticket, she said.

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