Lottery retailers will fight border war

Wednesday, March 15, 2006 posted 11:05 AM EST

FORT MILL, S.C. - When the border war breaks out at the end of the month between the Carolinas' lotteries, Carowinds Boulevard will be the first combat zone.

As North Carolina starts its own game and South Carolina revs up its operation, victory will depend on whether the flow of cars with N.C. tags slows or remains steady at the cluster of gas-n-go, fireworks and lottery hubs just off Interstate 77 on the S.C. side of the line.

The Civil War is marked by places such as Gettysburg and Fort Sumter. The lottery war will be won at spots like Big Daddy's and Red Rocket.

Rhonda Miller is an N.C. victory. Miller, a 37-year-old Charlottean who works in shipping and receiving, spends $40 to $45 a week on Pick 3 and Pick 4 games in South Carolina. When those games eventually start in her home state, she'll play there.

"It'll save on gas," she said, filling in ovals on a game sheet at Big Daddy's. Last year she won $5,000.

North Carolina's lottery debuts March 30 with four scratch-off games. South Carolina currently offers more than 30, plus Pick 3, Pick 4, Cash 5 and Powerball. North Carolina will roll out more games and Powerball throughout the year.

Big Daddy's, where Internet video gaming stations were seized by authorities this month, sells fireworks in back, but the front store now sells little more than lottery tickets. A lonely rack of snack chips and cooler of soft drinks sits in a corner.

Customers can scratch or pencil in numbers at a large red-topped bar with stools all around and five large holes in the center for dropping discarded tickets and sheets into trash cans beneath.

In national politics, the raging debate is over keeping outsiders out, but the state governments of the Carolinas are encouraging people on the other side of their lines to cross over. (Until last year, North Carolina made it a crime to possess a lottery ticket.)

Cliff Sims is an S.C. victory. Out of work on disability, Sims drives from his southwest Charlotte home across the state line and spends about $15 a week on Powerball, the other number-picking games and scratch-off tickets. He won a $2,600 jackpot last year.

He'll keep coming south, noting that South Carolina gives away a larger percentage of its lottery money, which is bound to draw more players.

"I'm not sure North Carolina is into it like other states," he said. "They're trying to just have the lottery without providing as much money as South Carolina."

That's pretty much the theory of S.C. lottery officials who don't think the start of their northern neighbor's game will put a big dent in the Palmetto State's gambling business.

North Carolina's law calls for 35 percent of revenue to go to education. After advertising and costs, that pushes the percentage for prizes down to about 52 percent, compared with 60 percent in South Carolina. Players in North Carolina will win less and less often, said Ernie Passailaigue, director of the S.C. Education Lottery.

"What always works for a lottery in terms of experience is winning," he said, highlighting some of the state's other advantages. "S.C. gas prices are cheaper. Cigarettes are cheaper. All we need are cheaper NASCAR tickets and we'd have a corner on the lottery market."

N.C. lottery officials emphasize that the state law is not ironclad, devoting 35 percent of revenue to education "to the extent practicable." If they need to reduce that number and boost prize amounts to increase sales, they can, said lottery Chairman Charles Sanders.

"You have a lot of flexibility," Sanders said.

N.C. lottery director Tom Shaheen dismissed any hand-wringing. He said players cross state lines for big jackpots, but both Carolinas will have the same big game, Powerball.

"I don't believe there's a border war," Shaheen said.

He acknowledged "a history" of higher payouts leading to larger sales.

"It's not science," Shaheen said. "It works in some states, but not in others."

York Road crosses Lake Wylie into South Carolina, then rolls up a hill to the Petro Express, the first S.C. lottery outlet on the road. Assistant Manager Bob Carter isn't stressing over the dawn of the N.C. game too much. He'll lose some players but not a lot, he figures, given the commuter traffic from places like York and Clover.

"People are creatures of habit," Carter said. "If you give them good service, they'll stop at our stores."

One border battle that even Shaheen doesn't dispute is with Virginia, which offers the MegaMillions jackpot game, a competitor to Powerball. Both states expect players to cross the line for whichever jackpot gets big.

Donna VanCleave, interim director of the Virginia Lottery, said their weaponry includes previously planned new games, such as Win for Life, offering a $1,000-a-week-for-life jackpot. Virginia, one of only two states to run its own game, also is considering bringing in a contractor to operate the system.

"Mostly it's just to provide the products that players all over the state want," VanCleave said, "and that will help us deal with new competition."

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