JEFFERSON CITY, Mo. — The Missouri Lottery will begin talks in April with the state Senate about moving control of the lottery from the government to the private sector.
Lottery Executive Director May Scheve said it was difficult to comment on the issue because the Missouri Lottery is currently ascertaining the opinion of state vendors on the matter; privatization was only recently brought up by the Senate's Rebooting Government initiative.
"We really haven't engaged in conversation with the Senate," Scheve said. "But beginning in April, we will work with the Senate to provide as much information as we can."
Sen. Jim Lembke, R-St. Louis, said he moved back a hearing on privatizing the lottery because none of the vendors working with the lottery are willing to testify until after they are finished with the lottery. Lembke is the chairman of the Senate Government Accountability Committee, which is to hold a hearing on lottery privatization once the process begins next month.
"The lottery has to be kind of reserved with their comments since it might affect some of the (answers)," Lembke said. "My concern and interest in the lottery is I'm looking at all areas of state government to find out how we can become more competitive."
Lembke called the proposed hearing a "fact-finding mission" because there is not much previous information for the committee to look at right now. He also said researching ways to change government procedure is important to help lawmakers learn how to take better care of the state.
"If we can be better stewards as to the way we manage resources, then that means more money goes to education, which is where the lottery is earmarked to go," Lembke said. "There really hasn't been that much to compare it to, so we don't have that much data, so this is just a fact-finding mission."
President Pro Tem Sen. Robert Mayer, R-Dexter, sent a letter to Lembke requesting he investigate what effects privatizing the lottery could have on state funds..
Mayer said in a written statement: "Some states have taken steps to privatize their lottery or some lottery services including online or instant ticket printing and other services. ... I anticipate companies that provide these services will appear before the committee."
Talks about privatizing the state lottery came soon after Illinois passed a bill allowing a private company to take control of the state's lottery. The bill is currently under review by the Illinois Supreme Court after the state appealed a decision by a state appeals court that said the bill was unconstitutional.
It is currently illegal under federal law to completely privatize a state's lottery, which is one reason why no states outside of Illinois have attempted to pass such legislation, Scheve said.
Lembke said he expects to be able to give a report on his results to the General Assembly by the end of April and that he hopes to find the most efficient ways to help the state.
"My hope, on any area we look at, is to find efficiencies and savings and ways to meet all of the priorities of the people of the state," Lembke said.
A lottery has to be one of the most reliable and profitable revenue sources a state can have.
That Missouri is even considering handing it over to a private corporation is unbelievable!
Or is it? It fits right in with the union busting and privatization efforts of newly elected
legislatures across the country. If there are any concerns about the randomness of the
computerized draws in Missouri now, just wait until the likes of "Kenneth Lay" or "Bernie
Madoff" are in charge! I wonder how long it will take before those who voted for this
mentality in 2010 start to feel the effects of "buyer's remorse?"
Rollerball (1975) - Here we come!
I think you misunderstand the purpose of privatization. It is to increase revenues to the state. I'm not saying I'm for it or against it, but if you don't like it because you believe the state will receive less money, then I don't think you are getting the concept.
Just like the current union debate in Wisconsin is to bring more income to the state, by eliminating the unfair union benefits, which were obtained through collective bargaining.
I get it. However, in practise, these moves seldom result in more revenue for the governments. What they do for sure is move some of the profits to the corporations and quite often to a few elected officials who support the move.
Corporations, by charter, are mandated to make a profit for their shareholders. Any methods a private lottery employs to increase lottery sales would be better implemented by the public entity currently in charge. If necessary, PR firms stand ready and willing to consult with state commissions on ways to improve their operations. Privatization proponents have a history of predicting their ability to get blood out of turnips. It never seems to work out that way.
Well, I guess philosophically we disagree, because I'm at a loss to point at one single example where the government does something better and more efficiently -- and more profittably -- than a private-sector company. Perhaps you could cite an example?
I'm for it, I believe it will create more jobs ,bring in more money and eliminate more government.
With a 50% profit margin, it should be obvious that the many state run lotteries across the country are the best examples. In my opinion, there are many areas where the profit motive works for the good of all. However, I also believe there are some where profit increases the potential for greed to trump what is good for the majority. I put lotteries in this latter category.
In all these kinds of debates - healthcare, liquor & lottery sales, the focus of privatization proponents is always on potential increases in profit. I'm more interested in how that profit is distributed.
You did not quote an example of the government doing something better than the private sector. Returning a mere 50% in a gambling operation is nothing to crow about. I'm sure the casinos bring back a much healthier profit ratio than that.
If you'd like to cite an example of one single instance where the government is doing something better, more efficiently and/or more profitably than a private sector company, I would be interested to hear it. Otherwise, I don't think you can claim that privatization will be a negative to the state in terms of money to the state.
Business is not my area of expertise. Perhaps someone else here can provide some examples.
I won't be surprised though if there are not many examples of profitable government enterprises.
I believe it is the duty of government to provide services, not make a profit.
Well you are contradicting your own argument in your first post. Your argument was that the government was turning a profit, and a private company would screw that up.
I hate to say it, but it sounds like you just plain like government and dislike business. Because you are unwilling to provide a shred of evidence for your initial complaints, and you contradicted yourself in an attempt to evade my pointed questions.
Unless you can provide something concrete I would have to conclude that it is point-set-match.
Also, when you use the point about "Bernie Madoff" in your first post, are you trying to say that government has a clean record of no corruption, while private industry is riddled with corruption? That is almost too laughable a proposition to write.
Most private companies are in for profits for themselves. When I see how some states want to "privitize" their lotteries, I think about how the banking industry was "deregulated" and how many people lost everything because of the "lack" of oversight. Banks floated phony paper, mortgage companies made loans to any and everbody and then the bubble burst and we are still not out of the woods by a long shot. I am not so "trusting" of these privitization ideals anymore.
I can see where this is going, and I'm not interested. I could start going round and round with you on these issues, but it would be fruitless. These kinds of issues always boil down to fundamental philosophical differences over what is the best way for societies to function. I happen to believe the major problems of our species today started with the discovery of agriculture. The documentary and book, Guns, Germs, and Steel might interest you. I won't challenge you if you believe you've won the match.
I found this website last summer while searching for information on state lottery raffles. Little did I know I would end up debating people over randomness, and now politics. My raffle questions are still open. I would appreciate any insights you might have on them:
https://www.lotterypost.com/thread/217181/1705801
How strange. You started this discussion by posting your opinion.
This is a forum. It is where people come to debate and discuss, not where someone can stand on a soap box without allowing a differing opinon to be expressed. You can use your blog if that's all you're interested in doing.
It seems that when it appears your argument does not hold the same weight as those with the opposite opinion, instead of saying, "Hey, you have a point, maybe I didn't think this through," you try to shift to a different, unrelated point and allow your obfuscation to mask your less-than-convincing argument.
Instead of posting a "Woe is me" comment, how about giving props to the other side, and perhaps allowing a convincing argument to open your mind to new possibilities? That would be refreshing.
I hear you! The intensity of your reaction to my opinion on privatizing the Missouri lottery causes me to suspect there are unspoken prior issues at work here. Do you feel me?
------------------------------------
"No one wins. One side just loses more slowly." Prez
No, I don't feel you, because you're making up a reaction that did not take place. I have been the furthest thing from "intense" in my reaction. I am much more dogged and logical than intense.
Again, you are trying to shift the discussion away from the point in order to mask the weakness of your argument.
Todd
Given: Without any cheating going on, either on the part of the Government or Private corporation.
Question: How can privatization increase the money going to the States? Unless the salaries and wages of the State employees are too high?
============================================================
I am not sure which I trust more with the lotteries, government or corporations. However, corporations have a desire to make a profit and often do it any way they can. Enron comes to mind real quick. It may not be the corporation itself but some of the people within the corporation.
Casinos do not play fair. You figure out a way to beat them and if they decide you are beating them too much, you get banned.
Ordinarily, I would say that government should not be in a competing business with a private company. I think I am leaning towards government running this - no profit motive. Whatever profit left over is money for the "educational system" (which itself is another argument discussion). Without some manipulation on the part of any corporation, I can't see where extra money would be coming into the government?
Can you point to something specific about where the extra money would come from?
As I mentioned before, I am not stating a preference for or against privatization. I was responding to the first comment in this thread that implied that private companies are somehow inherently underhanded and/or corrupt, and that the government could somehow produce better returns to the state.
I'm sure the private companies vying for the contract will prove to the state how they will produce good/better returns to the state. After all, that's what they did in Illinois to win the contract there. I won't argue their case for them, just read the previous news stories I've posted about the Illinois privatization.
Overall, OF COURSE private companies are in it for the profit for themselves. That's what makes Capitalism such a great system. People and companies constantly strive to be their best when the incentive is profit.
Lottery privatization capitalizes on this, because the state gets a percentage of the profits, and I'm sure they have baked in the proper controls (like the company doesn't get any profit until a minium is met, etc.).
I don't even know that "extra money" is an appropriate term. Does Apple get "extra money" from producing the iPad 2? Or did they build a better product and get more money with better profits?
When Capitalism is employed without government in the way, good things happen.
Regarding corruption, that happens with or without Capitalism, so using corruption as a wedge against Capitalism is obfuscation used to mask a weak argument.
am against it for govt backed by force Monopoly ,
however todd is sadly right about the profits in reality
the issue with runned by the govt is its"group think" element, thats is Govt
group think , is the must retarded way of doing things when people in the group,are freaking idiots.
take nasa team of say mars rover enginers, Not the higher ups thro that sit on their beeps.......
or a dev team behind a game, They all have a job, and can do said job,
Govt, has a group of idiots, who have no clue as a collective as the general rule about what ever the beep their trying to do
, if they don't know first hand how get something done, and have experice in it, they SHOULD STAY THE HELL OUT OF IT, the planning needs to be done By Very Smart people,people with experience in said matters of whatever their working on
, govt has a long history of Getting into planning things by people "law makers" who have no freaking Clue, let alone much of any experience in said matters........
however the gov't does not needto privatizing their state lottery to make more money
what they need to do, is get rid of them selfs,
the people who have no clue how to run a lottery before"aka take all the idiotic govt group think law makers out their"
and hire a greedy ,but committed person -- they must have a plan, no matter how crazy. They're motivated to do the job, , find me a Person with experice of running a large corporate gambling,
this is about group of idiots vs the individual who a evil genius and can do whatever they want.
and, give them 1% of the profits, and Tell them, Go nuts, any thing you want to do with the lottery, Do it, we don't run the show, you Do now mr new ceo
they want online lottery website, its their call, not the state body needing to Okay anything!
and let see how things Play out for a few years.
however i do have a issue with a private Group of investers, who can "Payoff" the govt law makers, by getting them a ton of upfront cash , to get their out of the hole they digged them selfs in by being idiots in the first place" large debt" law makers should have to own the debt, and anyone who voted them in, should also be the only ones to pay for whatever their law makers pass
thats right, we should know ever freaking idiot who voted these beeps in, and whatever "their" law maker voted yes to and got govt into debt, THEY should be the ones to have to pay the tax's for it
why should i have to pay for things i never wanted and forced upon me, like a 13 plus trillion fed debt,
however back to my point on group of investers buying a state monopoly
its giving someone a private State backed monopoly,
if my fellow man has the right to run a lottery, i do to, no one in united states is above each other.
the Govt has no power to give a monopoly to anyone, sense they get their powers form The people, and whatever the people could not do or give, they can't not do or give to anyone else
i know that sounds crazy to must of you, but thats a fact. i can't use force and give my "rich" buddy, a monopoly, if you try and get in on hes "market" i come nock down your door, and be like, will he paid me the must, you their for can't also be in this market,
govt has no rgihts form the people to give me or you, a monopoly, we all have the same freedom of the market.
its a moral issue, then again, am crazy and think govt insane with power they can't have to begin with, like ordering someone to buy something,"rolsl eyes at the feds health care plans"
I'd like to point out that the reason Lotteries were outlawed years ago was due to corruption. When they returned, it was under the guidance of the states, who are accountable to the public.
As far as government examples - there are many. A lot of public services are managed by governments - water supplies and road administration come to mind, although certainly not all - for exactly the reason that it saves taxpayer money by removing the profit motive.
Governments provide services, and certainly have many more considerations than merely profit. The well-being of it's citizens, health, happiness, fairness... protecting the interests of the voiceless. Schools are a great example. If profit were the only motive, a lot more children would "fall through the cracks." But fortunately, we believe that everyone deserves the opportunity, even if it's not perfect.
You bring up some good points Captain Lotto.
Privatization may or may not be a good thing, I'm not sure. Last year I came out against it, but now I see good arguments for and against it.
One thing is for sure. When the founders used Federalism as the country's guiding principle, they were geniuses.
Why?
Because we have 50 little laboratories (called "states") that are each free to try experiments under the guidance of their citizens, and all the other states can observe and learn from the good and bad things that happen in each of the states.
So it will be interesting to watch and see how this privatization experiment goes, apparently starting with Illinois. (Although we'll have to see how it goes in the Illinois Supreme Court.)
"that the government could somehow produce better returns to the state."
I think it is true.
"Lottery privatization capitalizes on this, because the state gets a percentage of the profits, and I'm sure they have baked in the proper controls (like the company doesn't get any profit until a minium is met, etc.)."
(I know, you aren't taking a position - but I have questions about your statements nonetheless). How can you have any set minimum? It's a moving target. You set a minimum of $1,000,000 per month - suddenly the corp comes out with the iPad and is no longer the same corp. So is it still $1,000,000? Or the reverse, they get into a mess like the auto companies and can't afford the $1,000,000. Then will there be bailouts? Or a Federal Reserve guarantee?
You don't have to answer those questions. Will you trust the lottery commissions to make a good deal? You don't particularly trust government and they are part of it. Of course, we will never get a say-so in any of the decisions that the lottery commissions make either.
OK...then next question.
Why not let private companies compete with the government? Like the online companies do now. People would have a choice. Let the free market decide who stays in business.
The only drawback for the private companies, they can't keep all the profit like the online companies do now. That's the kicker and real bummer. Everyone would want to run a lottery if only they could keep all the profit.
I'm open to new selling points but based on available information, I think it should stay with the government.
@truecritic: Remember, they are only talking about privatizing the operation of the lottery. The lottery itself still belongs to the people (i.e., the government = the people).
When a state privatizes a lottery, they are hiring an outside company to run the lottery, but the government (the people) still owns the lottery. It's like a store owner hiring someone else to run the store, and trusting (but verifying) that they do a good job.
am just thinking of ways they could bring in more money if the govt not running the show.....
1 way ofc is online website where you can buy into their games
more like maybe what some of them lottery ticket"buying/holding for you" companys do already like the one usamage links via marketplace on their side bar to the right
,alone let you buy a ticket online of say, A raffle ticket,
sense my tn state has not brothered to make a other raffle game recently, why not just buy a other states "online" rifle ticket
tn lottery already has 2nd chance drawings online , where my losing ticket number saved into a random draw of losing tickets
, and ever one else who entered their losing tickets has a fair shot....
then we get a random draw at the end of the game, and a winner is born
so why not just take it to the next level, we have this vest online market the state lotterys and their state govts are flat out refuseing to Tap into, am all for a private group to finally get that ball rolling , even if i hate to death the idea of them paying people "law makers" off, and getting a monopoly control , backed by the state, the people have no right to give 1 person/group a monopoly over anyone else, even if you "label it" the people still owns the lottery,
if it smells like a duck, sounds like a duck, looks like a duck, its a freaking duck.
and giving lottery monopoly over to a private group of investers, who yes, will make the lottery the same amount of money, or vestly more, its nonething but a pay off in my eyes , sense the people anyway are to dumb to tap into the lottery earners......
like i said, give full control over to a evil genius lottery ceo, and let them run the show, reward them with like 1% of the profits to keep them motived, and see what happens
no need to give it over to a group of rich investers, they too will hire a smart ceo/ and let him/her whoever, run the show
also their a old saying, possession is 9/10ths of the law, meaning if you control it, it may in title be"the peoples" in bs land, but in reality, its yours for long as you have possession aka control of it
yes it make the states much more money if its done right,
as ever other state with a lottery don't have the brains or the balls to go for all the untaped profits you could tap into, if you had FULL control of how to run a lottery,
thro if a group with full control, who can do whatever they want with how they run it, will be intresting to watch the outcome........
if state lotterys learn a few things, then good, they need a few good lessons hammered into their freaking thick skulls
When a state privatizes a lottery, they are hiring an outside company to run the lottery, but the government (the people) still owns the lottery.
From the articles I've read about states privatizing their lotteries they are actually selling their lotteries to a private company in exchange for a large infusion of money now and the companies expect to recoup their investments with a profit on future lottery sales. Sounds likes they'll not only be running those lotteries but actually own them.
It's like taking the cash option on a lottery jackpot, once they accept the one time big check they won't be getting a yearly check.
That's what I thought at first too, because the media always wrote about "selling the lottery", but in fact they're not selling the lottery outright. In fact, it probably would be against the law to do so. They are selling a contract for running (operating) the lottery. The government puts the contract out for bid, and evaluates all the companies to see who does the best job while returning the best profit.
That's the process Illinois completed, and they awarded a ten-year contract to three companies -- GTECH, Scientific Games, and an energy company, which formed a partnership for the purpose of operating the lottery. (Camelot, the company that runs the UK National Lottery, was the big company that lost the bid to the GTECH clan.)
Here's a link to the news story: https://www.lotterypost.com/news/226403
i want to Gtech and scientific games websites, o boy now i think i know what their planning
just look at websites and what "gaming" products they already offer, 1 even had betting games for smart phones, ooooo i can't wait to see what happens when they flat out gain control over a state lottery, sure they are already The instant scratch off game and lottery terms super powers, aka supplyers to mustly ever state
but boy do i see them going wild with full control over a state lottery, something tells me their going to turn Illinois lottery into one hell of a guinea pig test subject of ever thing they been wanting to do
but states lotterys have been to laid back is a nice way of saying it to TRY it
if done right, they make a killing alright...... as they sure as hell got the collective experice to pull it off, record breaking profits that is
1 line even said"
"Uses a retailer's existing in-lane POS terminal (cash register)to sell online quick-pick lottery tickets."
the tech already their, they just need to hold the tickets for you at lottery HQ, and check your numbers online, show proof of id, and claim your prize/ticket they holding for you
it can all done, god do i hope they try something like that thro.....
GTECH recently won a contract with Ohio. They provide the system (terminals, scratch off tickets and such) to play the games, it will be interesting to see what more they are doing for Illinois to raise that additional one and a half billion dollars.
That's the idea, but instead of just being the company that supplies systems and tickets, they staff every position at the lottery -- the management, the marketing, the draw staff, etc. They decide how to run the whole operation (within whatever limits are within their contract). The state continues to have oversight, probably with some kind of lottery oversight panel in the legislature.
I'm sure they create more profit through efficiencies (cost savings) as well as additional marketing of some kind (increased revenues). When the state awards a contract of that magnitude, you can be sure the companies bidding would produce detailed plans for how they will increase the profit. (That would likely be part of the bid package.)
In my career I've had to respond to many different bid requests, and they tend to be very lengthy, detailed documents. I can only imagine the length and scope of these lottery privatization bids. They must be massive.
An easier way to look at this is to just pull back, make a couple of observations, and then ask a simple question.
(1) Observe that, at the moment, Missouri is making a LOT of money running their lottery. Perhaps they could be making more, perhaps not.
(2) The corporation that ultimately wins the bid, through contractual agreements for future payments to Missouri, and a giant ante of tens or hundreds of millions of dollars up front, is currently making NOTHING from the lottery.
(Q) Simply ask yourself why these corporations would be willing to compete with each other to commit themselves to such a high stakes responsibility.
Corporations can do amazing things with their own money, and do it far better than the government could ever do with taxpayer money. Government should be trying to do things at a profit, if they did we'd be in far less trouble now as a country. When government runs out of money, they just raise the shortfall through taxes. Businesses have to find a way to make it.
However I am not quite as trusting of corporations when it comes to public/taxpayer money as think there is a very high potential for abuse. Bottom line is, I think a corporation would do far better with lottery money than the government would, however as long as I can be assured that there is a tight measure of accountability and very strong government oversight. That is a mix that could work. Without good oversight, I'm not for it.
A couple of things - governments are made up of people, just like corporations. There are certainly smart people in government, just as there are some idiots in the private industry. Don't be so quick to dismiss the experience of public employees just because they work for the government.
Secondly - there are a number of people in every state who don't favor the Lottery. Usually, it's because they make money from a segment of the population who may not be wise with how they spend their money, or lack an understanding of odds. Because of these critical opinions, not only are Lotteries constrained by legislators who wish to see them banished, they also take great care not to "prey" on a population that is vulnerable.
I think that's a good balance. I'm suggesting that not all Lotteries are "underperforming" and that seeking to increase profit could have detrimental effects on the public.
I wonder how much the states would actually save? If a private company takes over running the lottery, does that mean alot of the state workers, in positions, within the lottery be terminated? Would contracts with local printers of instant tickets be terminated as well?Or would the private company just be incharge of designing the games and advertising?
In Ohio,GTECH already provide the system (terminals, scratch off tickets and such) to play the games. The Ohio Classic Lotto (6/49), Rolling Cash5 (5/39), Pick3/4 and Keno have a standard format that all states use so it's unlikely those games could be made more profitable. MegaMillions and PowerBall aren't totally controlled by the states so there probably wouldn't be much change there either so the saving would probably be made by running the games with fewer people.
One way to have fewer people would be to stop maintaining lottery terminals at small retailers that don't sell that many tickets and never have enough cash on hand to pay the winners that they do sell so some people would lose their jobs and fewer retailers would sell lottery tickets.
I don't think cutting out small retailers would save money, they make their $ from getting a small portion of each ticket sale plus if they don't sell a certain amount each week they get charged a fee for low sales (at least in michigan). Yeah its kinda confusing, the lottery says they will still be in charge but the private company would be running it. Wheres the savings actually coming from?
Todd
I think it's called outsourcing, anytime I can get something done for $20.00 that cost me $25.00 to do
myself I see as a good idea. Sometimes just releaving the headaches of day to day operations can
justify the change.
RL
PS
Just don't outsource to foregin countries, I think enough of that has been done already.
RL
And to keep everything on the up and up I think the link below would work very well for those
in charge.
http://www.youtube.com/watch?v=Y1yobLezkgU&feature=related
RL
Private companies are much more competitive and efficient with their time and money than a state run institution will ever be. Some people Missouri realize this. I see no reason to fear privatization.