The Tennessee lottery board decided unanimously this afternoon to decline a partnership with the Georgia lottery perhaps delaying the startup of games in Tennessee until March.
Board members said the deal made sense from a business perspective because it would have provided more net revenue to be used for scholarships for Tennessee students.
Although the state Attorney General's Office and the outside counsel consortium led by Waller Lansden Dortch & Davis agree a joint venture is legal and allowed under state law, they say there is a risk that lawsuits threatened by international gaming vendors opposing the Georgia partnership could delay ticket sales and diminish the economic benefits of an early start-up under a joint venture.
It would be impossible to say who would sue and how a court would rule, lawyers said, although some lottery vendors upset they would be shut out of bidding for Tennessee's business under a partnership had hinted they might sue.
Lottery equipment manufacturers had threatened to sue on the grounds that Tennessee stood to achieve more savings by starting up alone. Consultants to the Tennessee lottery have estimated that a Georgia partnership could have generated between $101 million and $249 million in additional revenue over seven years.
State Sen. Steve Cohen, D-Memphis, chief architect of Tennessee's lottery, said in an interview that the board's focus on the possibility of a Peach State alliance has slowed down the process of getting the lottery up and running as a solo venture.
One major mistake, he said, is that the board has yet to hire a chief executive officer. Lottery officials said later today thay plan to hire a director by Sept. 15.
Cohen said the CEO needs to be on board inside two weeks.
''There's no reason now not to go to warp speed and hire the CEO,'' Cohen said.
The partnership idea was presented to the Tennessee Education Lottery Corp. by Gov. Phil Bredesen, who was offered the proposal by Georgia lottery CEO Rebecca Paul.
A $72,000 consultant's report showed the alliance to be financially attractive, netting Tennessee an additional $101 million to $249 million over seven years. The additional revenue would come from starting the lottery earlier with Georgia's help December instead of March and leveraging Georgia's low vendor rates.
Finally, the TELC saw the w