Another gambling expansion in NC as lottery approves digital instant games

A new form of online gambling is coming to North Carolina later this year.

The North Carolina Education Lottery Commission voted Tuesday evening to offer digital instant games online beginning by Nov. 15. The commission likened the games to digital scratch-off tickets.

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.

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."

The commission said it has the authority to offer the games, citing North Carolina statute. Previously Attorney Genera Josh Stein has expressed skepticism about the commission's ability to offer the digital games.

"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."