North Carolina lawmakers approved online sports betting earlier this year. That is set to begin as soon as early January or as late as mid-June and will be run by the lottery commission as well. Lawmakers are also debating whether to allow for additional casinos in several counties and whether to legalize video lottery terminals, perhaps as part of a budget agreement.
Several other states, including Virginia and Georgia, sell digital instants or e-instants, according to the commission. The lottery already sells tickets online for its draw games, such as Mega Millions and Powerball as well as Pick 3 and Pick 4.
North Carolina introduced the lottery in 2005 after a lengthy and divisive fight in the legislature. The lottery has had increasing sales for the past 17 years, said Mark Michalko. who has been the executive director of the NC Lottery since 2018. But he said sales could soon decline or flatten unless it adds new offerings.
Sales have been slower that in past year during huge jackpots in multi-state lotteries, such as Mega Millions and Powerball, according to the commission. The lottery generated $929 million to support education programs in the state in fiscal year 2022, according to the lottery.
"This is necessary," Michalko said. "We need to do this."
Michalko dismissed complaints from retailers, concerned that more online offerings may cut into their sales. A presentation offered to the commission showed that retail sales in states that offer digital instants had outpaced sales in states without the offerings.
The commission would allow cap the amount players can wager in a day ($505), a week ($2,000) and a month ($4,000) digitally. According to projections by the commission, in five years digital instants could generate more than $416 million in revenue.
Gov. Roy Cooper included revenue from digital instants in his proposed two-year budget. It included $81 million in revenue from in the 2023-24 fiscal year, which began in July, and $101 million in revenue in the 2024-25 fiscal year.
The commission also approved nine additional positions to administer the program.
Some commissioners expressed concerns about the proposal, especially with other gambling options still being debated in Raleigh.
"We, as the commission, do not know what the landscape of gaming is going to be in North Carolina over the next year," commissioner Chris Hayes said. "There's still a lot of proposals out there in the General Assembly. We could have more responsibility. We don't know what the total handle is. We don't know how many gamblers there are. Introducing new games now with an uneven landscape, I don't think is the right move. I think we need to get a better understanding of what types of games are going to be authorized in North Carolina before we move forward."
Previously Attorney Genera Josh Stein has expressed skepticism about the commission's ability to offer the digital games. In 2020, he wrote a letter to the commission's then-chairwoman, expressing concern that "these types of game prey on vulnerable people and risk real harm to both communities and families across the state."
Stein wrote further that "these games may qualify as video games that we as a state have banned."
The commission said it has the authority to offer the games, citing North Carolina's lottery law.
"The Commission shall determine the types of lottery games that may be used in the Lottery," according to the state's lottery statute. "Games may include instant lotteries, online games, games played on computer terminals or other devices, and other games traditional to a lottery or that have been conducted by any other state government-operated lottery."