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N.Y. takes first step toward lottery privatization

New York LotteryNew York Lottery: N.Y. takes first step toward lottery privatization

New York has taken a step toward privatizing the state lottery. The state's Budget Division has started the process of hiring an independent investment adviser to guide Gov. Eliot Spitzer's proposal.

Spitzer wants to open the lottery to private investors, using money made on a potential lease to start and sustain an endowment funding the State University of New York system. Spitzer has said any offer must include at least $4 billion in upfront payments.

The Budget Division is seeking a financial adviser to analyze options for a lottery lease, research ways to maximize the lottery's value and develop a bid and negotiation process for a lottery lease.

"We must do an analysis and get a fair price," said division spokesman Jeffrey Gordon.

Bids on the position are due by Feb. 25, and a contract is expected to be awarded in mid-March, according to state documents. Aides have said at least 10 major investment banks have expressed interest in the contract.

Spitzer has said any lease must maintain the state's oversight and audit authorities of the lottery.

Business First of Buffalo

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3 comments. Last comment 9 years ago by justxploring.
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chasingadream's avatar - Archangel 01.jpg

United States
Member #38687
May 3, 2006
315 Posts
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Posted: February 4, 2008, 11:00 pm - IP Logged

it will be interesting to see how this plays out

Oogle  waiting patiently for my jackpot

    Tenaj's avatar - michellea
    Charlotte NC
    United States
    Member #17406
    June 18, 2005
    4053 Posts
    Offline
    Posted: February 8, 2008, 3:42 pm - IP Logged

    I hope it doesn't happen.

    takeemtothebank

      justxploring's avatar - villiarna
      Wandering Aimlessly
      United States
      Member #25360
      November 5, 2005
      4461 Posts
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      Posted: February 8, 2008, 3:55 pm - IP Logged

      My only experience with privatization is Medicare.  Several Medicare Advantage plans were designed with low or zero premiums to attract seniors.  It would take too long to explain, since there is such a variation in the plans.  In general, they're really great if people don't get sick or don't care which doctor or hospital accepts the plan.  But many are misleading and sold using unethical techniques. This is mainly because of the high commissions paid to insurance agents who care more about volume than the needs of the client. In fact, last year the entire program was temporarily halted in April (voluntary, but it was a request by CMS) because of all the deceit. Several "dead" people were on the plan. (The companies get about $1,000 a month per enrollee from the Fed government) 

      So, IMHO, whenever the bottom line is to make as much money as possible by paying out as little as possible, the consumer loses.