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Texas Gov. proposes selling the lottery

Texas LotteryTexas Lottery: Texas Gov. proposes selling the lottery

Texas Gov. Rick Perry said Thursday that his State of the State address on Tuesday would include a plan to fully privatize the Texas Lottery by selling it to private interests.

Perry said such a sale would raise substantial funds that could be used for health care and research.

Other states, including Illinois and Indiana, are looking into the concept, which allows a state to collect a large lump sum to replace future lottery revenue.

The proposal is likely to be controversial because the state's track record of turning over state services, whether welfare programs or toll roads, to national and international corporations has been criticized by some as either not working or a poor bargain.

Perry mentioned his plan at the end of an interview with the American-Statesman's Washington bureau.

Robert Black, the governor's press secretary, declined to elaborate on Perry's comments or explain how the sale would work.

Two of the states that are considering selling their lotteries - Illinois and Indiana - are inviting bids. Illinois hopes to receive as much as $10 billion in exchange for giving up all revenue and profit from the monopoly for 75 years, according to news reports. Indiana is expecting to raise more than $1 billion up front and annual payments of $200 million, according to The New York Times.

The sale of Illinois lottery, according to news reports, could be the biggest in the country - unless Texas puts its game up for sale.

While the Illinois lottery had profits of about $630 million last year, according to The New York Times, the Texas Lottery contributed $1 billion in profits last year to state finances.

Voters approved the establishment of the lottery in 1992, but profits have fluctuated. After a decade-long slump, lottery sales last year finally topped its 1997 record, primarily because of new games with scratch-off tickets.

Suzii Paynter, a gambling opponent with the Christian Life Commission, said she would have to study Perry's proposal before taking a position. But she said the timing seemed odd.

"With a $14 billion surplus," she said, "it sees like the last thing we need is a huge infusion of cash."

State officials have said all but $2.5 billion of that $14 billion is committed already.

But there are other considerations besides money.

Many public officials argue that the state should not be in the gambling business. Selling the lottery would remove Texas from that role.

Then again, public lotteries arose because of scandals in privately run lotteries.

Also, the state might lose control over where lottery tickets are sold and how aggressively it is marketed. The state restricts marketing it considers objectionable.

Even if the state tried to require the lottery buyer to follow current state guidelines, the buyer later could lobby to relax the rules.

It's unclear how selling the lottery would affect ongoing efforts by the gaming industry to persuade the Legislature to approve casino gambling or slot machines at dog and race tracks.

Lawmakers are concerned whether expanding gambling opportunities would hurt or help lottery sales.

Perry has had an on-again, off-again position toward the expansion of gambling.

In 2004, when Mike Toomey was his chief of staff, Perry supported video lottery terminals (slot machines) at race tracks as a way of helping pay for public education. His conservative base objected, however, and Perry retreated.

Toomey is now one of an army of lobbyists pushing gambling expansion. Toomey favors the video lottery terminals, or VTLs, for his clients, while competing interests are working for casino gambling.

Just prior to the start of this legislative session, Perry said he opposes casino gambling, but he said state lawmakers might support slots at racetracks if that helped the state to rein in similar, illegal games known as eight-liners.

"I share with my friends who are proponents of VLTs that their time may have passed because with a budget surplus, there's less pressure on these members to look for new sources of revenue," Perry said.

Austin American-Statesman

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12 comments. Last comment 10 years ago by LOTTOMIKE.
Page 1 of 1
psykomo's avatar - animal shark.jpg

United States
Member #4877
May 30, 2004
5114 Posts
Offline
Posted: February 2, 2007, 8:30 pm - IP Logged

NOT....again!!!!!!!!!......Another One Bites......

"DE DUST" Thinking of...

WAT's........happening GOV. .............RICK??????????????????????

WHY's........don't YOU like DE............"LITTLE PEOPLE"...........RICK?

WE & ME & PSYKOMO....................& "LITTLE PEOPLE"......propose

YOU divide a share of the money W/"LITTLE PEOPLE "..who make

less than $25,000 a year for the next .....50 years & bring us out

of ............................PROVERITY  & teack us how to spell sumin!!!

YO............................edewkation pla aunt dun monch bot squt!!!!

See Ya!Agree with stupidSulk Off           White BounceWhite BounceWhite BounceWhite BounceWhite BounceWhite Bounce

US Flag      $Happy Days Hera Again$$$

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

    psykomo's avatar - animal shark.jpg

    United States
    Member #4877
    May 30, 2004
    5114 Posts
    Offline
    Posted: February 2, 2007, 9:51 pm - IP Logged

    NOT....again!!!!!!!!!......Another One Bites......

    "DE DUST" Thinking of...

    WAT's........happening GOV. .............RICK??????????????????????

    WHY's........don't YOU like DE............"LITTLE PEOPLE"...........RICK?

    WE & ME & PSYKOMO....................& "LITTLE PEOPLE"......propose

    YOU divide a share of the money W/"LITTLE PEOPLE "..who make

    less than $25,000 a year for the next .....50 years & bring us out

    of ............................PROVERITY  & teack us how to spell sumin!!!

    YO............................edewkation pla aunt dun monch bot squt!!!!

    See Ya!Agree with stupidSulk Off           White BounceWhite BounceWhite BounceWhite BounceWhite BounceWhite Bounce

    US Flag      $Happy Days Hera Again$$$

    $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

    Gov. Rick:

    U are SCARING...DE "little people"      Bat    Bat    Bat  Beaver

    to.......DEATHBatRed DevilRed Devil

      psykomo's avatar - animal shark.jpg

      United States
      Member #4877
      May 30, 2004
      5114 Posts
      Offline
      Posted: February 2, 2007, 11:36 pm - IP Logged

      Gov. Rick:

      U are SCARING...DE "little people"      Bat    Bat    Bat  Beaver

      to.......DEATHBatRed DevilRed Devil

      Gov. Rick:

      "You WIN" BedBedo!o!o!o

      "We're"breathless o!o

      US FlagUS Flag               PartyNo Pity!No Pity!

      PartyNo Pity!No Pity!  THANK

      u-Gov. for L@@K'g after the "LITTLE PEOPLE" enjoy de MONEY! 

        bobby jones's avatar - anime15
        illinois
        United States
        Member #4322
        April 13, 2004
        27 Posts
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        Posted: February 4, 2007, 3:07 am - IP Logged

        if illinois and texas does this how long before every state decides to privatize there lotteries.i would think that selling the lottery to a private company is illegal considering that it is our tax dollars that pay for it now.the people should have a say so in this and when i say the people i mean real lottery players.not somebody who maybe buys a ticket everytime the jackpot gets big.they say that the money would go to the schools but the money doesnt go to the schools now.

          Avatar
          Northern California
          United States
          Member #19948
          August 9, 2005
          151 Posts
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          Posted: February 5, 2007, 2:10 pm - IP Logged

          Tax $$$ don't pay for lotteries. Proceeds from sales do. Yes - some states do budget lottery proceeds (meaning they go through a legislative approval process), most don't - but they are not tax dollars.

           

          There is no way to limit participation in a question like this to people who are "real" lottery players.

           

          Many countries do license a lottery operator. TX already has its vendor do many things that other states use state employees to do and it is one of the most efficient lotteries (if not the most efficient) in the U.S. Let's not mix metaphors and start arguing whether the state makes good use of the $$$ lotteries generate - after all, the lottery doesn't control where the $$$ goes. That is a separate question (albeit one that may be germane to the overall issue).

           

          I would hazzard a guess that there are not a whole lot of efficiencies to be gained in TX - so it would probably come down to do you want a big wad of cash now (and less in the future) or should things continue the way they are. There could be advantages that a lot of people, no matter how much they play, might not know about. For example, a lot of states have unionized work forces that are not held accountable for performance. Some outsource some of the functions - like the field sales force. TX already has more accountability from its sales force than any other lottery besides Nebraska.

           

          Still I suspect a lot of people will view these plans with a lot of skepticism.

           

          DDB

            dvdiva's avatar - 8ball

            United States
            Member #2338
            September 17, 2003
            2063 Posts
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            Posted: February 5, 2007, 5:55 pm - IP Logged

            This would make the majority of Megamillions states private in the near future. Considering the disasters that McDonalds had with it's game it's only a matter of time before a scandal would hit private run lotteries. Scandals in private run lotteries were the reason lotteries were banned in the 1800's.

            I'm sure Indian casinos would pay big bucks to shut down US lotteries should a scandal occur. Considering the money involved and the likelyhood of legislators restricting the business it seems like a bad investment to purchase a state lottery.

              Raven62's avatar - binary
              New Jersey
              United States
              Member #17843
              June 28, 2005
              49642 Posts
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              Posted: February 5, 2007, 6:25 pm - IP Logged

              The Governors are like sheep!

              Just like the Bankers that bought into Junk Bonds!

              A mind once stretched by a new idea never returns to its original dimensions!

                Avatar
                Delaware
                United States
                Member #30273
                January 14, 2006
                494 Posts
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                Posted: February 5, 2007, 7:00 pm - IP Logged

                The bigger problem with this is that it'll create monopolies. These lotteries will be the only ones in their states and they will have absolute dominance on gambling. I would not object to private lotteries, but not private MONOPOLISTIC lotteries.

                Still the other part of me wonders if it's even worth playing anymore.

                  Coin Toss's avatar - shape barbed.jpg
                  Zeta Reticuli Star System
                  United States
                  Member #30470
                  January 17, 2006
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                  Posted: February 5, 2007, 7:12 pm - IP Logged

                  As one news reporter stated, these states wanting to sell their lotteries are no different than a jackpot winner opting for "half the advertised prize" because they want their money now. 

                  Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                  Lep

                  There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

                    Avatar
                    Northern California
                    United States
                    Member #19948
                    August 9, 2005
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                    Posted: February 6, 2007, 1:24 pm - IP Logged

                    I don't believe that is necessarily so at all. Just because the Louisiana lottery was corrupt doesn't mean it would be easy to fix a modern lottery. I also challenge the notion that "state" employees are inherently more virtuous or altruistic than private sector people.

                     

                    Selling the franchise to operate the Lottery does not mean that the private operator would follow any less stringent security procedures than today's lottery employees do - and I would imagine that the state AG or some other regultory body could (and should) take responsibility for ensuring they do so.

                     

                    Your example makes my point. A private operator would have just as much incentive to protect the security as the state does - and maybe more since the private-sector people involved can be sued/fired if they don't perform. God knows a lot of lottery staffers aren't/can't be fired if they don't. Everyone knows if they screw up and a concern arises over security, people will stop playing and there goes the chance to earn any return on your fat, up-front investment. 

                      dvdiva's avatar - 8ball

                      United States
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                      September 17, 2003
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                      Posted: February 7, 2007, 2:45 am - IP Logged

                      I don't believe that is necessarily so at all. Just because the Louisiana lottery was corrupt doesn't mean it would be easy to fix a modern lottery. I also challenge the notion that "state" employees are inherently more virtuous or altruistic than private sector people.

                       

                      Selling the franchise to operate the Lottery does not mean that the private operator would follow any less stringent security procedures than today's lottery employees do - and I would imagine that the state AG or some other regultory body could (and should) take responsibility for ensuring they do so.

                       

                      Your example makes my point. A private operator would have just as much incentive to protect the security as the state does - and maybe more since the private-sector people involved can be sued/fired if they don't perform. God knows a lot of lottery staffers aren't/can't be fired if they don't. Everyone knows if they screw up and a concern arises over security, people will stop playing and there goes the chance to earn any return on your fat, up-front investment. 

                      Your point would be well taken IF lotteries had mechanical ball drawings that were televised and there are multiple potential witnesses. Since many lotteries are computer drawn and there is no way of knowing how the drawings really work it would be very easy to rig.

                      Remember a lottery doesn't just have to be rigged so someone wins it can also be rigged so more people loose. The latter may be far more profitable for a private company and hard to detect with computer drawings.

                        LOTTOMIKE's avatar - cash money.jpg
                        Tennessee
                        United States
                        Member #7853
                        October 15, 2004
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                        Posted: February 9, 2007, 3:32 am - IP Logged

                        this would be a very bad idea......