Retailers eye lottery benefits, challenges

Paul Nowell

Tuesday, Sept. 6, 2005 | 9:32 a.m.

CHARLOTTE, N.C. -- For some North Carolina gas station and convenience store owners, the chance to sell lottery tickets is something they have sought for decades.

Now that it's here, even those as leery of the lottery as the lawmakers who fought for years against its creation are likely to get into the game.

"We have not polled our people, but it seems like there's always been a big split," said Doug Howey, governmental affairs director for the North Carolina Petroleum Marketers Association, whose members include hundreds of service stations. "The bottom line is that if you are in business and your competition has the lottery, you will too."

After decades of debate, lawmakers in North Carolina finally agreed this week to make the state the last on the East Coast to start a lottery. That means North Carolinians who have had to drive to gas stations and convenience stores in neighboring states to buy lottery tickets will soon, perhaps in six months, be able to gamble at the corner store.

"Everybody has a dream and this is what it's all about," said Eddie Zaghari, the manager at Southside Grocery in Charlotte. "A lot of people have asked me to do it and I will."

Fran Preston of the North Carolina Merchants Association said many of the Raleigh-based group's members opposed a lottery. Their concerns ranged from lost sales of higher-margin products that will compete with lottery tickets to worries about how long it will take retailers to get paid for selling the tickets.

But, she said, "This is a fact of life now that the state has taken a firm position (on the lottery)."

Still, she expects even those opposed to the lottery's creation will want to be involved in deciding who will sell tickets. If North Carolina follows the example of other states, there will be about one retailer for every 2,000 residents, making for about 4,000 retailers in North Carolina.

Jeff Lowrance, a spokesman for Salisbury-based Food Lion, which operates more than 1,200 supermarkets in 11 states, expects they'll be available at his company's stores.

"Food Lion stores typically do offer lottery games in those states that have them, including Virginia, Georgia and Florida," Lowrance said. "We do it as a courtesy for our customers. It's not necessarily a big profit maker, but our customers have an interest in it. At least a portion of them."

He added, however, that "if there is a community that is really opposed to it (gambling), we'll take that into consideration."

North Carolina retailers that end up selling tickets will compete for customers like Betty Wilson, who drives several miles from her home in Charlotte to Fort Mill, S.C., to buy tickets at Millers Gas. It's one of the dozens of convenience stores straddling the state line that now cater to North Carolinians looking for lottery tickets.

"I might come down here and play some, but I'll probably stick to North Carolina," Wilson said as she scratched off the numbers on one of her tickets. "It's a lot closer."

But don't expect lottery retailers in South Carolina, Virginia and other border states to give up on customers like Wilson, who make up a significant portion of sales. South Carolina lottery officials have estimated North Carolina residents account for about 12 percent of the state's $1 billion in annual lottery sales. In Virginia, as much as 10 percent of sales come from North Carolina residents.

Lottery officials in both states, while conceding they expect to lose a large chunk of sales, have vowed to continue to market their lotteries in North Carolina and to sweeten their prizes to continue to attract the state's residents.

Also a factor: what games the North Carolina lottery will offer, said Jerry Warren, the manager at Millers Gas.

"I think it really depends on whether North Carolina gets Powerball," he said. "If it doesn't, I think a lot of North Carolina people will come back. And eventually a lot of them will want to play in both states."

At a Sunoco station in Lake Wylie, S.C., clerk Cathy Robinson said she expects some of her regular customers from Charlotte will stop coming down to play the South Carolina lottery once the North Carolina lottery begins.

"It's been a running joke with some of my customers for the past eight months to a year that soon they won't have to drive so far to play," she said. "It all depends on where they have to go to play."