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Penn. Lottery gets advice from Illinois on privatization

Aug 9, 2012, 7:42 am

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Pennsylvania LotteryPennsylvania Lottery: Penn. Lottery gets advice from Illinois on privatization

State trying to decide if privately operating the lottery is right approach

Pennsylvania is currently looking into privatizing its lottery, but one official with the Illinois lottery, the only private system in the nation, is warning the commonwealth to carefully plan how it would choose a company to manage day-to-day operations.

Illinois Lottery Superintendent Michael Jones says in the Land of Lincoln, potential overseers had to estimate how much money they'd be able to bring into the lottery. A company would be fined if it was selected and revenue didn't meet its expectations. Jones says Pennsylvania should find a better way to appeal to competing businesses. "At least, in Illinois, I think the emphasis on that complicated a system of evaluation is one of the reasons the competition was so limited to only two companies," he says.

Pennsylvania Department of Revenue Secretary Dan Meuser says the state's already heard from companies interested in running the lottery, which pays for programs benefitting older Pennsylvanians. He says commonwealth officials are debating whether or not to take the next step. "Once we do our due diligence, we will then determine whether or not to move on to the next phase, which would be an invitation for bids," he says.

Meuser says if the state decides to forge ahead with the privatization process, it could solicit proposals from interested companies this fall.

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13 comments. Last comment 10 years ago by haymaker.
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United States
Member #111437
May 25, 2011
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State trying to decide if privately operating the lottery is right approach

Pennsylvania is currently looking into privatizing its lottery, but one official with the Illinois lottery, the only private system in the nation, is warning the commonwealth to carefully plan how it would choose a company to manage day-to-day operations.

Illinois Lottery Superintendent Michael Jones says in the Land of Lincoln, potential overseers had to estimate how much money they'd be able to bring into the lottery. A company would be fined if it was selected and revenue didn't meet its expectations. Jones says Pennsylvania should find a better way to appeal to competing businesses. "At least, in Illinois, I think the emphasis on that complicated a system of evaluation is one of the reasons the competition was so limited to only two companies," he says.

Pennsylvania Department of Revenue Secretary Dan Meuser says the state's already heard from companies interested in running the lottery, which pays for programs benefitting older Pennsylvanians. He says commonwealth officials are debating whether or not to take the next step. "Once we do our due diligence, we will then determine whether or not to move on to the next phase, which would be an invitation for bids," he says.

Meuser says if the state decides to forge ahead with the privatization process, it could solicit proposals from interested companies this fall.

Should be a smart move, if they can boost sales and increase market share. The potential company should also be rewarded if it exceeds its target

revenues. Picking the right companies with proven track records will be the hard part.

    haymaker's avatar - Lottery-012.jpg
    Egg Harbor twp.south Jersey shore
    United States
    Member #112963
    June 29, 2011
    4156 Posts
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    Hey PA. don't do this, also get out of the liquor buisiness and forget about making your stretch of Interstate 80 a toll road,

    none of these are good ideas.

    Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

      TheGameGrl's avatar - Lottery-012.jpg
      A long and winding road
      United States
      Member #17083
      June 10, 2005
      6638 Posts
      Offline

      I agree to disagree here. One: Yes, keep the Lottery with the State.

      Two: Keep the liquor license in the Commonwealth's hands.  Our endearing neighbors are proof (no pun intended!), that going private does increase crime on both the business level and within the laws. Anytime chemicals are involved, its best to leave it to the state to control. THere is a reason that PA only alots so many licenses to establishments.

      Our Lottery goes private and it lines another scoundrels pocket. PLus makes it that we have to pay taxes on our winnings. Think about it, are you willing to pay 25% to the state then..because that is the part that WILL happen. Gaming then becomes taxed. Right now we are tax free from the state level. Lets not ruin a good thing that still benefits us on the winning claims level.

      Count your smiles.

        Coin Toss's avatar - shape barbed.jpg
        100
        Zeta Reticuli Star System
        United States
        Member #30469
        January 17, 2006
        11654 Posts
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        From another News thread:

        Report: Ill. lottery manager short $100M on profit

        The Illinois Lottery's private manager fell nearly $100 million short of the profits it promised to deliver for the state.

        But the Chicago Tribune reported Tuesday that revenues generated by Northstar Lottery Group still set an Illinois record. Illinois has fallen behind other state lotteries for years.

        Northstar promised $825 million in net revenue when it took over the lottery in July 2011. A Tribune analysis found it had collected $726 million by the end of June.

        That could mean hundreds of millions of dollars in penalties. The same month the company got the contract, it began seeking a reduction in what it promised. An arbitrator will decide the matter.

        https://www.lotterypost.com/news/249277

        _________________________________________________________________________

        I don't think the states should sell their lotteries too private firms. Illinois' finances are a nightmare and I think one reason Gov. Quinn did it was just to eliminate some state employees.

        Northstar has done a lot of things marketing wise, but other than that, so so. The machines that were suppossed to let you check scratchers, insert playslips, etc... are already just glorified scratcher machines, at least in the part of the state I'm in.

        Also, seems silly for states running a lottery to sell to private firms because they want the cash 'right now' yet they themselves prefer that jackpot winners go the annuity route. Think about that one.

        Why sell a cash cow, a proven money maker?

        Don't do it, PA, don't do it.

        Those who run the lotteries love it when players look for consistency in something that's designed not to have any. So many systems, so many theories, so few jackpot winners. 

        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.

          haymaker's avatar - Lottery-012.jpg
          Egg Harbor twp.south Jersey shore
          United States
          Member #112963
          June 29, 2011
          4156 Posts
          Offline

          I agree to disagree here. One: Yes, keep the Lottery with the State.

          Two: Keep the liquor license in the Commonwealth's hands.  Our endearing neighbors are proof (no pun intended!), that going private does increase crime on both the business level and within the laws. Anytime chemicals are involved, its best to leave it to the state to control. THere is a reason that PA only alots so many licenses to establishments.

          Our Lottery goes private and it lines another scoundrels pocket. PLus makes it that we have to pay taxes on our winnings. Think about it, are you willing to pay 25% to the state then..because that is the part that WILL happen. Gaming then becomes taxed. Right now we are tax free from the state level. Lets not ruin a good thing that still benefits us on the winning claims level.

          Wow, only one person from PA. and one formally of PA. have anything to say about this ?

          Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

            rdgrnr's avatar - nw barkeep.jpg
            100
            Grand High Exalted Mystic Ruler
            The Hall Of The Mountain Kings Tennessee
            United States
            Member #73902
            April 28, 2009
            15286 Posts
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            Wow, only one person from PA. and one formally of PA. have anything to say about this ?

            Was the one formally of PA wearing a tux?  Wink

              haymaker's avatar - Lottery-012.jpg
              Egg Harbor twp.south Jersey shore
              United States
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              June 29, 2011
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              Was the one formally of PA wearing a tux?  Wink

              LOL , good one.

              Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

                rdgrnr's avatar - nw barkeep.jpg
                100
                Grand High Exalted Mystic Ruler
                The Hall Of The Mountain Kings Tennessee
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                LOL , good one.

                Sorry haymaker, I couldn't resist.

                  haymaker's avatar - Lottery-012.jpg
                  Egg Harbor twp.south Jersey shore
                  United States
                  Member #112963
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                  Sorry haymaker, I couldn't resist.

                  Its OK, a little levity never hurt no one.

                  Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

                    rdgrnr's avatar - nw barkeep.jpg
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                    Grand High Exalted Mystic Ruler
                    The Hall Of The Mountain Kings Tennessee
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                    Its OK, a little levity never hurt no one.

                    Yeah, but a man's gotta know his levitations.

                      haymaker's avatar - Lottery-012.jpg
                      Egg Harbor twp.south Jersey shore
                      United States
                      Member #112963
                      June 29, 2011
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                      Yeah, but a man's gotta know his levitations.

                      Sounds like advice from Clint.

                      Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

                        rdgrnr's avatar - nw barkeep.jpg
                        100
                        Grand High Exalted Mystic Ruler
                        The Hall Of The Mountain Kings Tennessee
                        United States
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                        Sounds like advice from Clint.

                        Heh,heh,heh,heh,heh...

                          haymaker's avatar - Lottery-012.jpg
                          Egg Harbor twp.south Jersey shore
                          United States
                          Member #112963
                          June 29, 2011
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                          Now jersey is looking into privatization, again.

                          Jersey, don't do this.

                          Don't fix what ain't broken.

                          Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.