Issue Number 9- Lottery May Hurt Retailers

North Carolina Citizens for a Sound Economy today released Issue Number 9 of its ongoing effort to educate elected officials and citizens on why a government-run lottery is bad business and public policy.

The Lottery is not a gift to retailers! The reality it would leave convenient store owners in debt!

To garner support from retailers, lottery proponents claim a lottery will benefit them by attracting more customers to the owner’s stores. This claim is misleading. This argument fails to take into account that store owners will have to replace high-margin items, such as soda or candy, with a lottery ticket, which is a low-margin product. Once the retailers know the truth they will see the lottery for what it is– simply a bad business decision for retailers!

The North Carolina Association of Convenience Stores opposes a lottery if the commission is less than 7 percent. At a 5 percent commission level, which is being proposed, the average convenience store would generate $250,000 in lottery ticket sales, but would need to generate $400,000 a year in sales to breakeven. Furthermore, increasing the commission to retailers, would cut into what revenue from the lottery will be available to fund education. Obviously this places the retailers in a position of either losing sales or taking money from education. This is not good for North Carolina businesses or for education.

“The effect on retailers is a major consequence of a lottery and the lottery proponents need to think carefully about selling this to retailers,” stated North Carolina CSE Director Jonathan Hill. “Many of these businesses are small ‘mom and pop’ shops that are the heart of North Carolina’s economy. Putting these businesses in jeopardy of losing sales could also prevent them from expanding and creating job opportunities for people across the state.”