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Private management could be Alabama lottery option

AlabamaAlabama: Private management could be Alabama lottery option
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If Alabama gets a lottery, private management may at least be an option.

But the Republican leader of the Senate said Wednesday he did not want to commit to any particular proposal, being wary of some of the negative experiences of other states with private managers.

"Having no experience in the lottery field, we're just going to have to look at what other states have done and what's worked best for them," he said.

Marsh is sponsoring legislation that would establish a lottery and gambling in the state, in the hopes that it would help Alabama address a looming shortfall in the state's General Fund budget. The bill moved out of a Senate committee Thursday and is headed for a vote in the full Senate.

Marsh's bill would put oversight of a lottery in the hands of a group called the Alabama Lottery and Gaming Commission. The governor, lieutenant governor, attorney general, speaker of the House and Senate president pro tempore would each make one appointment to the five-member commission.

The commission would be able to regulate the lottery; however, specific details of its powers would be determined by the Legislature. If the constitutional amendment gets out of the Legislature and is approved by voters in September, the Legislature would convene in a special session to determine enabling legislation.

Day-to-day operations of the lottery could be contracted out, said Marsh, but that would be a question when the lottery itself was set up.

"What I would expect if we're able to get something passed is the gaming commission would make that decision, or that it's done in the enabling legislation," he said. "Obviously I want what's best for the state, and what produces the most money in tax revenue."

Since the first state lotteries were created about 50 years ago, states have generally run their own lotteries. Starting in 2010, states began experimenting with turning to private companies to run their lotteries, in the hopes of maximizing revenues to the state. Private companies have traditionally operated lotteries in foreign countries, including the United Kingdom.

However, the relationships have frequently been acrimonious. Illinois severed its relationship with Northstar Lottery Group, a consortium of private companies, last December after Northstar fell short of revenue projections for three straight years. Indiana has had more success with its operator, but has also dealt with slow growth.

The reasons for the failures vary; in the Illinois case, an arbitrator blamed certain state procedures for preventing the state from hitting its targets. Thomas Garrett, a professor of economics at the University of Mississippi, said in an email that allowing private managers leeway to innovate in the games would be helpful.

"True privatization would allow the lottery to operate in any way it wanted to (just like any other business) and all sales from the lottery would be taxed by the state (similar to casino gaming) — the state would have no say in the types of games offered, the vendors used, contract terms, etc.," he wrote.

Victor Matheson, a professor of economics at the College of the Holy Cross in Worcester, Mass., said the efficiencies that privatization sometimes creates generally don't exist in a lottery.

"Running a lottery is just not that complex," he said. "There's not much innovation that can occur. It's not like you get a whole lot of benefits from adding entrepreneurs into the mix. All you get is the middle man."

Marsh said with other states having gone through the process, the state might be spared the trial and error other states have experienced.

"We want to make sure that whatever path we go gives the most success to the state," he said. "I would think we wouldn't go down a path where there was a bad experience."

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5 comments. Last comment 2 years ago by RedStang.
Page 1 of 1
Bondi Junction
Australia
Member #57242
December 24, 2007
1102 Posts
Offline
Posted: May 22, 2015, 9:48 pm - IP Logged

Alabama should look at the UK 's National Lottery. It is the most successful lottery in the world, and the vast majority of the British people trust their national lottery. The state government should get in touch with the UK 's National Lottery Commission and pick their brains.

 

The National Lottery Commission 

The Commission’s duties are to ensure that players are treated fairly; the nation’s interest in the Lottery is protected; and the operator is motivated to maximise the enjoyment and benefits that the Lottery brings to the Nation. It also runs the competition to select the commercial operator of the Lottery, currently Camelot Group plc.

We all get a lot out of lotteries!

    Technut's avatar - moon
    3rd Rock from Sun
    United States
    Member #159103
    September 13, 2014
    151 Posts
    Offline
    Posted: May 22, 2015, 10:22 pm - IP Logged

    Looks like Alabama is one step closer to the end result i figured they would decide upon.

    Yesterday is History, Tomorrow is a Mystery, Today is a gift that's why it's called the PRESENT! (c8

      TnTicketlosers's avatar - Lottery-065.jpg

      United States
      Member #71120
      February 19, 2009
      1209 Posts
      Offline
      Posted: May 23, 2015, 10:45 am - IP Logged

      Tennessee,Mississippi and Alabama will love this if it is passed,I know I will,cant wait for a legit Lottery closer to my home.

        Avatar
        Kentucky
        United States
        Member #32652
        February 14, 2006
        7298 Posts
        Offline
        Posted: May 23, 2015, 10:41 pm - IP Logged

        If Alabama gets a lottery, private management may at least be an option.

        But the Republican leader of the Senate said Wednesday he did not want to commit to any particular proposal, being wary of some of the negative experiences of other states with private managers.

        "Having no experience in the lottery field, we're just going to have to look at what other states have done and what's worked best for them," he said.

        Marsh is sponsoring legislation that would establish a lottery and gambling in the state, in the hopes that it would help Alabama address a looming shortfall in the state's General Fund budget. The bill moved out of a Senate committee Thursday and is headed for a vote in the full Senate.

        Marsh's bill would put oversight of a lottery in the hands of a group called the Alabama Lottery and Gaming Commission. The governor, lieutenant governor, attorney general, speaker of the House and Senate president pro tempore would each make one appointment to the five-member commission.

        The commission would be able to regulate the lottery; however, specific details of its powers would be determined by the Legislature. If the constitutional amendment gets out of the Legislature and is approved by voters in September, the Legislature would convene in a special session to determine enabling legislation.

        Day-to-day operations of the lottery could be contracted out, said Marsh, but that would be a question when the lottery itself was set up.

        "What I would expect if we're able to get something passed is the gaming commission would make that decision, or that it's done in the enabling legislation," he said. "Obviously I want what's best for the state, and what produces the most money in tax revenue."

        Since the first state lotteries were created about 50 years ago, states have generally run their own lotteries. Starting in 2010, states began experimenting with turning to private companies to run their lotteries, in the hopes of maximizing revenues to the state. Private companies have traditionally operated lotteries in foreign countries, including the United Kingdom.

        However, the relationships have frequently been acrimonious. Illinois severed its relationship with Northstar Lottery Group, a consortium of private companies, last December after Northstar fell short of revenue projections for three straight years. Indiana has had more success with its operator, but has also dealt with slow growth.

        The reasons for the failures vary; in the Illinois case, an arbitrator blamed certain state procedures for preventing the state from hitting its targets. Thomas Garrett, a professor of economics at the University of Mississippi, said in an email that allowing private managers leeway to innovate in the games would be helpful.

        "True privatization would allow the lottery to operate in any way it wanted to (just like any other business) and all sales from the lottery would be taxed by the state (similar to casino gaming) — the state would have no say in the types of games offered, the vendors used, contract terms, etc.," he wrote.

        Victor Matheson, a professor of economics at the College of the Holy Cross in Worcester, Mass., said the efficiencies that privatization sometimes creates generally don't exist in a lottery.

        "Running a lottery is just not that complex," he said. "There's not much innovation that can occur. It's not like you get a whole lot of benefits from adding entrepreneurs into the mix. All you get is the middle man."

        Marsh said with other states having gone through the process, the state might be spared the trial and error other states have experienced.

        "We want to make sure that whatever path we go gives the most success to the state," he said. "I would think we wouldn't go down a path where there was a bad experience."

        "Having no experience in the lottery field, we're just going to have to look at what other states have done and what's worked best for them," he said.

        Probably the best way to start a new lottery, but just like in Wyoming, somebody will demand that the salaries be disclosed.

          RedStang's avatar - tallman zps6gf4inoc.jpg
          NY
          United States
          Member #121961
          January 21, 2012
          3157 Posts
          Offline
          Posted: May 23, 2015, 10:45 pm - IP Logged

          Tennessee,Mississippi and Alabama will love this if it is passed,I know I will,cant wait for a legit Lottery closer to my home.

          I wouldn't get excited. i doubt a Private management can provide a legit lotto but for Alabama residents it's a great step in the right direction.