SC lottery seeks law change allowing debit card purchases

COLUMBIA — South Carolina’s Lottery Commission is asking legislators to change state law to allow players to purchase tickets with debit cards. The request Tuesday to House budget writers followed Gov. Henry McMaster recommending the change in his budget proposal, saying it’s needed to keep college financial aid flowing. It also comes as the Senate is poised to debate a bill using lottery profits to provide $8,500 scholarships for private K-12 tuition. The agency that runs the state lottery has been seeking the ability for several years, said its director, Dolly Garfield. But the idea could gain traction as the GOP-controlled Legislature tries to reinstate private tuition payments halted in September. That’s when the S.C. Supreme Court ruled they violated the state constitution’s ban on public dollars directly benefiting private education. The bill up for debate Wednesday in the Senate seeks to get around the ban by funding the scholarships with lottery profits, rather than the general fund. House Republicans may come up with a different plan. House Education Chairwoman Shannon Erickson, R-Beaufort, said Tuesday she’s waiting to see how the debate goes in the Senate. Regardless, House Speaker Murrell Smith said, he’s fine with allowing debit card lottery sales. “I wouldn’t see any problems with that,” he said. The Sumter Republican noted gambling opponents insisted on the prohibition of credit and debit card sales in 2001, when the Legislature created the lottery after voters approved (by 54%) changing the state constitution to allow it. “I think now in today’s society more people use credit cards, and less people carry cash, and that would make sense,” said Smith, whose first election to the House in 2000 coincided with the lottery referendum. “But we’ll obviously let the committees hear the pros and cons of it and make a decision.” South Carolina’s lottery brings in about $2.3 billion in revenue a year. Of that, about $500 million was traditionally going to fund college scholarships. Then a global pandemic hit. “We had all the noise from COVID — the injection of stimulus funding into the market, all of our competitors (other states) being shut down,” Brian Ford, the lottery’s chief financial officer, told legislators. Lottery profits spiked to more than $600 million. That was followed by a pair of years in which there was an unprecedented run of $1 billion jackpots for Powerball and Mega Millions — seven in total — driving more people to play and keeping profits near that $600 million mark. South Carolina Lottery CFO Brian Ford testifies before state legislators Tuesday, Jan. 11, 2025, asking for a law change to allow for debit card purchases of lottery tickets. (Jessica Holdman/SC Daily Gazette) “We’ve had an incredible run of growth,” Ford said. “It looks like things are kind of trending down, but in reality, it’s more of just a return to normal.” Scratch-off ticket sales, two-thirds of revenue, are down about 5% compared to a year ago. But if trends continue for the next few years, profits are forecasted to sink to $450 million by the 2027-2028 budget year. It’s a forecast that had legislators asking whether the state might be in danger of not having enough to fund scholarships. “I mean, what are the potential ramifications here?” asked Rep. Chris Murphy, R-North Charleston. After all, the state’s five main scholarship programs alone — merit- and need-based — doled out $426 million to South Carolinians attending college in state during the 2022-2023 school year, according to the latest information from the Commission on Higher Education. The year before that, the state awarded nearly $415 million in scholarships. And that doesn’t include the additional $20 million in need-based grants toward tuition at private colleges or the $95 million for scholarships at technical colleges that prepare students for high-demand jobs that are also funded through lottery profits in this fiscal year’s budget. (McMaster’s recommendations for 2025-26 seek to continue those allotments.) The Lottery Commission has a potential solution: Allow for debit card lottery sales. “We are seeing that our players are getting older and older, and the younger generation tends to not carry cash,” Garfield said. “Please let us do this so that we can perhaps grow our player base and offer these games to the younger generation.” Based on a survey it commissioned, about 11% of people who did not currently play the lottery said they would if they could use a debit card. That’s roughly 430,000 potential new players, Garfield said. In addition, the commission looked at debit card lottery sales in the 47 other states that already allow it. “We knew this time was coming and so, it’s here now,” Ford said. The commission estimates that allowing debit card sales could bring an additional $52 million in profits annually. Garfield also pointed to a growing number of businesses switching to a cashless business model — Colonial Life Arena, Williams-Brice Stadium and Carowinds amusement park just to name a few. Asked about credit card purchases, Garfield said 26 states allow those, but the commission is not advocating for that. South Carolina is a popular state for ticket sales because winners can remain anonymous, she said. “I can’t imagine how much sales we’re losing at gas stations on our interstates. People out-of-state stopping, wanting to buy a ticket, and all they have on them is their debit card,” she said. Bill to restart SC vouchers for private school tuition is on the fast track So, if there was a new education program legislators wanted to fund, Rep. Micah Caskey asked her in reference to vouchers, the state could do it by just changing to allow debit cards? “It seems from the testimony today that there is money on the table,” the West Columbia Republican said. The Palmetto Family Council, a faith-based lobbying group that has long opposed gambling but supports private school choice, is not taking a position on the issue. Neither is the S.C. Appleseed Legal Justice Center, an advocate for poor South Carolinians. But the center’s director, Sue Berkowitz, said it does raise concerns. “So many folks in South Carolina are already struggling. It’s hard to keep up with rising rent and cost of food and health care,” she said. “It’s a problem because it allows people to make an impulse purchase.” Editor Seanna Adcox contributed to this report. Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our website. AP and Getty images may not be republished. Please see our republishing guidelines for use of any other photos and graphics.