The North Carolina Education Lottery (NCEL) is run by the government of North Carolina. It was established after Governor Mike Easley signed the North Carolina State Lottery Act and the 2005 Appropriations Act.
North Carolina has one of the United States' youngest lottery systems, having been enacted in 2005. The North Carolina State Lottery Act created the 9-member Lottery commission who was charged with overseeing all aspects of the education lottery. 100% of North Carolina Lottery net proceeds go directly to benefit the state's education, with the current figure sitting at more than $5.5 billion since its inception. By law, lottery funds go to pay for school construction, need-based college financial aid, transportation, salaries for non-instructional support staff, and pre-kindergarten for at-risk four-year-olds. The State Lottery Act outlines how each and every dollar produced by the lottery will be spent.  In 2012, the revenue distributions were as follows: 60% was paid out in prizes, 29% was transferred into the education fund, 7% was paid to the retailers who sold lottery tickets, and 4% went to general lottery expenses.
North Carolina, traditionally associated with the Bible Belt, was the only state on the East Coast without a lottery. The issue divided lawmakers and the public alike. At the time, the opposition of nearly every Republican and a minority of Democratic lawmakers (consisting of progressives) made the passage of a lottery unlikely. These groups denounced the lottery as a regressive tax on the poor. However, on August 30, 2005, two lottery opponents (Harry Brown, R-Jacksonville and John Garwood, R-North Wilkesboro) had excused absences. With this known, a special vote was called, which was 24-24. Lt. Gov. Perdue cast the tiebreaking vote, signaling the way for Gov. Easley to sign it into law. The vote would have been defeated had the absent senators paired their votes.
In February 2009, to reduce a budget shortfall, Gov. Perdue withheld approximately $88 million to fill shortfalls in the North Carolina budget. Perdue emptied the $50 million lottery reserve, also withholding $38 million allocated for a school construction budget in direct conflict with the mandate of the NCEL. This controversial move by the Governor prompted North Carolina lawmakers on March 10, 2009 to propose a name change to the NCEL, to remove "Education" from its name.
Proceeds and payouts
- Seven percent is paid to retailers as commission.
- Fifty percent is paid as winnings to players.
- Eight percent is cost-of-sales.
- The remaining 35% goes to education proceeds, broken down as follows:
- Before any proceeds are paid, 5% of the proceeds (1.75% of the total) goes to the Education Lottery Reserve Fund to be used when lottery proceeds fall short. This fund may not exceed $100 million.
- Fifty percent of the remainder (16.625% of the total) goes towards the reduction of class sizes.
- Forty percent of the remainder (13.3% of the total) is used for school construction.
- Sixty-five percent of the above (8.645% of the total) is distributed based on school enrollment.
- The remaining 35% (4.655% of the total) is distributed to counties with effective property tax rates above North Carolina's average based on school enrollment.
- Ten percent of the remainder (3.325% of the total) are distributed for college scholarships, to be used with the federal Pell Grant.
Originally, North Carolina's scratch tickets had an overall payout of 52%, the lowest among scratch tickets then available through US lotteries. While its $1 instant tickets continue to pay out at roughly this level, its newer $2-and-up games now have higher-percentage payouts.
The Lottery has continued to generate controversy among North Carolina constituents upset with teacher layoffs who believed the Lottery should have made up the difference.
Live Lottery drawings are broadcast on these TV stations:
- WRAL-TV in Raleigh
- WITN-TV in eastern North Carolina
- WAXN-TV in Charlotte
- WILM-LD in Wilmington
- WLOS in Asheville (2011-)
- WGHP in Greensboro/Winston-Salem/High Point
- WYCW in Asheville showed the lottery results from 2006-2011. The drawings were moved to WLOS on March 28, 2011.
Current draw games
In-house draw games
Carolina Pick 3
Began on October 6, 2006, Carolina Pick 3 is drawn twice daily (prior to February 27, 2011, it was drawn only once Sundays). Carolina Pick 3 draws three balls, each numbered 0 through 9. Players can wager in 50 cent increments that the number drawn is in exact order, or in any order. Another option is "50/50", which is a $1.00 bet consisting of an "Exact" wager and an "Any" wager. The final option is "Combo", which is a $3.00 or $6.00 wager (depending on whether the number played repeats a digit). A $1.00 wager on an "Exact" number wins $500 if said number is drawn; odds are 1 in 1,000).
Carolina Pick 4
Began on April 17, 2009, Carolina Pick 4 also is twice daily (prior to February 27, 2011, it was drawn once nightly). Otherwise, it is similar to Carolina Pick 3, except it draws four digits. A "Combo" wager is a $4, $6, $12, or $24 bet depending on whether any digit repeats. A $1 "Exact" wager wins $5,000 if said number is drawn; odds are 1 in 10,000.
Carolina Cash 5
Began on October 27, 2006, Carolina Cash 5 is drawn nightly. As of Sunday, November 4, 2018, it draws 5 numbers from 1 through 43. Jackpots begin at $100,000, growing until there is a 5-of-5 winner. Games cost $1 each. Overall odds of winning: 1 in 10.51; odds of winning the top prize: 1 in 962,598.  The payout for matching 2 of 5 numbers is $1; 3 of 5, $5; 4 of 5, $250, and the jackpot is parimutuel.
Lucky for Life
Lucky for Life is a lottery drawing game available in 23 states and the District Of Columbia. Players select 5 numbers from 1-48 and a sixth number from 1-18. Prizes range from $3 to $1,000 per day, every day, for the winner's life.
Mega Millions is offered in 44 states, the District of Columbia, and the U.S. Virgin Islands. Mega Millions began as part of the NCEL on January 31, 2010 as part of the cross-sell expansion with MUSL. Mega Millions is drawn Tuesday and Friday nights at 11:00 p.m. Eastern Time in Atlanta Georgia.
Powerball began in 1992; NCEL joined on May 31, 2006. Players select six numbers from two pools as in Mega Millions: five numbers 1 through 69, and the red Powerball (1-26). Jackpots begin at $40 million annuity. Drawings are Wednesdays and Saturday.
- (H. 1023)
- (S. 622) on August 31, 2005
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- "Looking for real reform in the governor's race". Independent Weekly. 2008-10-15. Archived from the original on 2008-11-23. Retrieved 2008-11-25.
-  Archived May 15, 2009, at the Wayback Machine
- "State has money woes despite lottery". Raleigh News & Observer. 2009-06-22. Archived from the original on June 25, 2009. Retrieved 2009-06-27.
- "Cash 5 How to Play | NC Education Lottery". NC Education Lottery. Retrieved 2018-11-09.
- "Lottery Opponenets Outmaneuvered". Legislation Information Network. 31 August 2005. Accessed 4 June 2006.
- Mouskourie, Diane. "The Wrong Number?". The Daily News (Jacksonville, NC). 7 May 2006. Accessed 4 June 2006.