Not a move to privatization, officials say
State officials say there are no plans to privatize the Ohio Lottery Commission amid a pending top-to-bottom review of its management and a document holding out privatized state lotteries as "models of interest."
A state request for proposals issued on Aug. 24 seeks a consultant to conduct a comprehensive review of the lottery and recommend ways to contain costs and maximize profits, which largely are routed to public schools.
One part of the document states that "models of interest" to be studied by the consultant include the lottery systems in Illinois, Indiana, Massachusetts and New Jersey — all of which have privatized their lotteries.
The consultant will develop "recommended alternative operations and management solutions... this may include changes to the governance model of the agency operations," the request for proposals document states.
"There's no intent to privatize the lottery, and there's nothing in current law that permits us to take that path," Ohio Lottery Commission spokeswoman Danielle Frizzi Babb said on Wednesday.
The goal of hiring the consultant is to undertake a business study of the lottery's operations and make improvements to generate more money for schools, she said.
Asked why the document lists privatized state lotteries as "models of interest" if the state has no such plans, she replied, "You have to look at all business models.... This allows us to look at what does work and does not work."
The commission oversees the sale of lottery tickets and video-lottery machine games at seven racinos, including Scioto Downs south of Columbus.
Prior to the state saying it is not authorized to privatize the lottery, Sandy Theis, executive director of liberal-leaning ProgressOhio, said it would not serve the public interest.
Theis said the privatization of lotteries in others states, including those in which Ohio wants studied, have been problematic, largely failing to meet promised revenue figures. Illinois canceled its contract, and Indiana renegotiated with its vendor after disappointing sales.
Kasich previously expressed interest in privatizing the lottery, and the Ohio Senate added language into the governor's first state budget bill in 2011 to privatize the state lottery. The proposal did not survive.
State Sen. Bill Coley, R-West Chester, chairman of the Joint Committee on Gaming and Wagering, said on Wednesday that he objects to paying for another study of the "much-studied" lottery commission.
"Why are we going to pay a new consultant to tell us what we've already been told?" Coley asked, saying the lottery commission needs to improve its marketing of games and boost the potential of its Keno game.
The Ohio Lottery Commission reported a record $3.66 billion in sales in the fiscal year ending June 30 — a 13 percent increase — to funnel $990 million to K-12 public schools. Money earmarked for education rose $85.7 million.
Total proceeds from video terminals at the seven racinos hit $773 million last year, but the lottery received just $258.9 million. The State Racing Commission received $511.4 million, about two-thirds of the net proceeds.