RALEIGH, N.C. – A lawsuit making its way through the North Carolina courts could eliminate the state’s lottery, reports the News Observer.

The lawsuit basically asks the question: When the state takes 35 percent of lottery ticket sales and devotes that money to education, is that money a tax? Or, is that percentage only the healthy profit from an item sold in a convenience store – no different from profit built into the sale of a candy bar or a cola – but that happens to be kept by the state instead of a company?

If the lottery is a tax, then its creation might have been illegal, writes the newspaper. The state and leading legislators say that it isn’t a tax – and they have already won a victory in Wake Superior Court. The N.C. Court of Appeals has scheduled arguments for May 22.

The plaintiff is a nonprofit legal group that sees the lottery as a tax that didn’t go take the required legislative steps. The state is arguing that the lottery isn’t a tax, but that it makes a profit on the sale of tickets.

“It seems to be an open-and-shut case,” said Rep. Paul Stam, a party in the lawsuit and the Republican leader in the state House, to the News Observer. “We’re counting on the court to end it this year.”

No matter who wins or loses, the outcome likely would be appealed to the state Supreme Court. To keep the lottery games going, the legislature would have to pass a new lottery bill.