S.C. lottery profits on track to meet scholarship needs

Sales up $6 million over last year

COLUMBIA -- The weakening economy and falling consumer spending have not caused the state to cut the number of lottery-funded college scholarships it should be able to provide this year.

That's welcome news for the lottery, embarrassed by almost 8,000 complaints about new machines.

Lottery profits are on track to meet the $252.4 million that the General Assembly expects to receive to pay for scholarships, lottery officials said Wednesday.

Lottery sales are up $6 million this fiscal year over the same period last year, despite recession fears, officials said.

"The lottery has a certain type of insulation to the economy," Ernie Passailaigue, S.C. lottery executive director, said Wednesday.

Passailaigue said South Carolinians are much fonder of scratch-off tickets such as the Cash 3 and Cash 4 games than they are of online games. That's because the scratch-off games generally pay out instantly.

Critics say the lottery preys on the poor, who play the games good economy or bad in hopes of a financial miracle.

News of its overall good health comes at a good time for the lottery.

The lottery has been under fire for machines that have misread tickets, declaring some winning tickets to be losers.

State officials said they will examine at least one "Deal or No Deal" ticket purchased by a Newberry man. The ticket was a loser, the man said, but the lottery's new computer system scanned it as a winner and the retailer paid off.

Lottery officials say that couldn't happen. "We do not know of any cases or calls of a non-winner being validated as a winner," Passailague said.

Passailague said the lottery recently completed a $47.6 million upgrade to its computer software, with options for three more years at $6.8 million annually.

Retailers and players have swamped the lottery with phone calls complaining about the new computer setup since its Nov. 5 startup.

Officials said 7,788 complaints were received in the first five days of the new system's operation, from Nov. 5 to Monday.

Passailague acknowledged there were problems with the new system, designed by Atlanta-based Intralot.

But, he said, said some of the problems have been the result of retailers incorrectly scanning lottery tickets. Other complaints were caused when tickets produced by the replaced software company, Scientific Games, did not match up properly with Intralot's new scanning software.

Turnover at retailers that sell lottery tickets also has been a problem, Passailague said. Half the employees trained on the new software have left their jobs with the state's 3,600 lottery retailers, he said.

One of the biggest problems has been retail employees scanning a problematic ticket a second time, which Passailague said occurred more than 42,000 times in six days through Monday.

Sam Jackson, general manager of Shumpert Oil in Pelion, which has lottery outlets in three towns, said some scans showed winning tickets as losers.

But the problems have been corrected, Jackson added. "We had that problem, mostly the day after the new system went up, but all of them have been resolved."