News-Record.com

From today's paper:

When the General Assembly drafted the original lottery law in 2005, it included a mandate that 35 percent of the lottery's proceeds had to go toward education.

In 2007, that safeguard was waived, allowing the lottery to offer bigger prizes but reducing the state's cut of lottery revenues. The logic was that offering better odds and bigger prizes would entice more players, increase overall revenues and therefore produce a net gain for the state.

The gamble appears to have paid off, according to financial statements and audits reviewed by the N.C. Lottery Commission on Wednesday.

Click here for the full story.

Mainly, this story circles back on stories from 2007 when the legislators who approved the change seemed to be a bit leery of the potential impact. This is from a story in July of 2007:

The change to the lottery 's funding formula is aimed at enticing more players to buy North Carolina lottery tickets rather than seeking richer payouts in other states. That, in turn, is expected to pump up lottery proceeds, which fell about $110 million short of expectations during its first full year of operation.

"I guess we all anticipated this," said Rep. Pricey Harrison, a Greensboro Democrat and lottery critic who voted no on the bill in 2005. "Those of us who voted against the bill were worried that all these restrictions and safeguards would be removed."

As originally passed in 2005, the bill required that at least 35 percent of the money earned by the game would be turned over to education. The measure also set other limits, such as constraining the lottery to spending no more than 1 percent of its revenues on advertising.

Those limits would become "guidelines" under language agreed to by budget negotiators - including House Speaker Joe Hackney and Greensboro Democrats Sen. Kay Hagan and Reps. Maggie Jeffus and Alma Adams.

"I think it is unfortunate that they are going to go on the course of trying to entice more and more people to gamble their money," said Sen. Phil Berger, a Rockingham County Republican and critic of the lottery .

Berger said that he was concerned that if the theory behind giving the lottery more flexibility didn't pan out, it would put even less money into education.

"It sounded ridiculous to me when I first heard it, too," Hagan said of the notion that the lottery could raise more money by letting it put more toward prizes. "I have since been convinced there is a difference."

Thus far, this somewhat counterintuitive idea seems to be paying off. Click here for a spreadsheet of transfers from the lottery to the education fund.