Rep. Bill Dunn, a Tennessee Republican, said it is too early to predict if voters will approve the referendum, which will appear on the ballot in November 2002. A similar referendum passed last year in South Carolina.
If Tennessee were to implement a lottery, Dunn said a large portion of the money raised likely would go towards college scholarships.
Like some N.C. legislators, Dunn said several Tennessee lawmakers have argued that neighboring states like Georgia that already have lotteries are luring money away from the state.
A lottery in Tennessee would completely surround North Carolina by states that permit lotteries.
In his first State of the State address on Monday, Gov. Mike Easley advocated a lottery in North Carolina, pointing to the millions of dollars in revenue North Carolina is losing to neighboring states.
Some N.C. legislators have said voters in the state should have the chance to decide whether to join their neighbors in rolling the dice with a referendum.
"If the people of North Carolina vote on it and don't think it's wise, I respect their decision," said Rep. Bill Owens, D-Camden, sponsor of a bill to put a lottery referendum on the ballot in North Carolina in May 2002.
Owens said Tennessee's actions will only improve the chances of a lottery referendum passing in North Carolina. "If we don't pass it, it's just more money thrown out of North Carolina."
He added that if North Carolina does not implement a lottery, the governor's office has estimated that the lost revenue could reach as high as a $500 million.
Owens has introduced a lottery referendum to the N.C. House three times before, but all three proposals have died in committee.
The current bill is pending in a House committee, and Owens said he is not sure of a timeline for a full vote.
He said the bill would direct lottery proceeds to educational and infrastructure improvements in the state.
Owens also said 25 percent of lottery revenue would be used to fund college scholarships, similar to programs in Georgia.
But Sen. Virginia Foxx, R-Alleghany, said the Tennessee decision is no reason for North Carolina to jump on the lottery bandwagon.
She also said estimated revenue loss to the state has been exaggerated. "(Owen's estimate) is a totally inflated figure," she said. "I don't think (the loss is) anywhere near what lottery proponents say it is."
Foxx said there is no way to estimate exactly how much the state would stand to lose.
"There isn't anything to back up their argument," she said. "They don't know how much we're going to lose."
Foxx also said a referendum would raise constitutional questions. "We're not an initiative and referendum state like California," she said. "The only legitimate thing to do is to put it to a vote up or down (in the legislature)."
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