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"Folks, you all know Slick Deal. I've asked Slick to update us on North Carolina's lottery status and offer us a strategy."

"Thanks, Madam Chairwoman. As you all know, our friends in Raleigh really might get their act together this year and approve their own lottery. This is bad news, of course, because North Carolina residents spend approximately $100 million a year on lottery tickets in our state. Naturally, we don't want to lose that revenue.

"The good news is that their political leaders say that North Carolina will budget very little money for lottery advertising and marketing."

"Ha! That's what we said."

"Yes, and I'm sure you meant it at the time. What you learned, of course, is that you need to promote your lottery to sustain enthusiasm and maximize ticket sales. While it's true that a portion of the population will play the lottery without any encouragement from the state whatsoever, and indeed many people literally become hooked, most people get bored with it or grow disenchanted, especially after they realize that the return on their investment is unsatisfactory."

"You mean they get tired of losing."

"I wouldn't put it in those terms. Let's just say that the more educated segment of the population understands the odds and is less susceptible to the suggestion that the lottery provides the path to easy money."

"In other words, they don't buy your marketing pitch."

"That's unfortunately true of the people who could afford to be our best customers but generally choose to spend their entertainment dollars more wisely. Our marketing efforts are aimed at people who can be enticed to convert grocery money into lottery tickets."

"And North Carolina says it isn't going to hard-sell the lottery?"

"Well, you know how holier-than-thou they can be in North Carolina."

"I think they're just hypocrites."

"Of course they are. They just don't know it yet. They'll realize their lottery won't deliver the income they want to spend unless they promote it just like we do. Until then, you have a chance to keep a lot of that North Carolina money coming our way."

"How can we do that if they start their own lottery, Slick?"

"First of all, it's wrong to think North Carolinians will stop buying our lottery tickets if they have a game of their own.

"A lot of them have other reasons for crossing the state line. They might work here or come here on business. They might have a girlfriend here. They might drive here for cheaper gas. They'll keep doing that and keep buying lottery tickets while they're here. And others will continue to come here for the specific purpose of buying our lottery tickets."

"Why would they do that?"

"They'd do that because they like our games. They're used to them. They're in the habit.

"They'll also keep coming over the state line if they think we have better games -- bigger prizes, more chances to win, Super Megabucks Powerball partnerships with other states, and so on."

"Does that mean we'll have to pay out more money?"

"That's my recommendation. A little more, anyway. And we'll have to promote our efforts more aggressively, especially in communities near the state line."

"Can we afford to do that?"

"Can we afford not to? Look, we've got $100 million a year coming in from North Carolina. We can keep at least half that, even after they start their lottery, by selling our game as the biggest and best there is."

"Will people in North Carolina buy it?"

"Please, we're talking about lottery players, some of the most gullible people there are. If they were Eskimos, we could sell them snow. We just have to make them think our snow is a little whiter than the snow they can get at home."

"Slick, won't North Carolina have to answer this? They could pay out more in winnings and increase their own advertising."

"Sure they will, as soon as they can. But they're going to tie their hands at first with their foolish promises to minimize advertising. Their high-minded approach to the lottery -- trying to remain moralistic even while they're suckering their own people -- is going to give us a big advantage for a while."

"What about later?"

"They'll wise up. Every state in the lottery business figures out that success equals exploitation -- and they're in the exploitation racket. Then we'll be in a border war. So many people cross the state line every day that millions are at stake. We want their dollars, they want ours, and we'll fight for them with glitzy ad campaigns pushing phony hopes of instant wealth."

"So, who's going to lose this war?"

"Same as always -- about 99 percent of the people who play."