Players Have More Fun
By Kevin Robinson in News on Jan 25, 2007 2:50PM
A few days ago, the New York Times scooped the local dailies with a piece about Rod Blagojevich's plan to cash in his chips, so to speak, with plans to privatize the Illinois Lottery. If you are feeling particularly bureaucratic today, you can read the state's Request for Concessionaire Qualifications here (PDF). John Filan, the state's Chief Operating Officer cites the government's inability to efficiently manage what he claims is essentially a retail operation. “Gaming is getting so competitive around the world that we’re worried our revenues could go down unless there is retail expertise to run the lottery.” The state is hoping to get a bid of around $10 billion for the Lottery, with Blagojevich promising to commit $6 billion to schools over the next 18 years, or about $650 million a year. Financially, this move is a crap shoot, for if the Lottery brings in more than the projected $6 billion it is expected to earn, the state and schools will lose out on that funding.
Originally floated by Blago last year prior to his November reelection many suspect that this is part of a deal he cut with state legislator Rev. James Meeks in exchange for his support in the election (as well as to keep Meeks out of the race). Besides the financial questions this raises (what would happen to the other $4 billion this deal could generate? Can't the state negotiate with a private firm to manage the Lottery?), the moral implications are staggering. According to Dr. Rachel Volberg of Gemini Research, a private operator could be more aggressive in it's promotion of gambling products, bound not by responsibility to protect the well-being of citizens, but rather the bottom line. The addictive nature of gambling and it's impact on communities is well-documented, as evidenced by the body of research presented by the North American Association of State and Provincial Lotteries.
A few points of interest in the RFQ is that the winning bidder could use market research conducted by the state to better target customers, while lowering overall payouts. Better proposals are already out there, including the tax-swap, and a quick cash influx like this is hardly a long-term solution to the problems the state has with education. With all the news lately of sweetheart deals and steering contracts to Blagojevich's friends, we're deeply skeptical of a plan with so much potential for abuse, especially when we consider the impact this could have on lower-income people, and the likelihood of the state losing out on already desperately needed funding for schools.