Monday, January 21, 2008

More Lotto News

Did you guys see this on AOL?

Privatizing state lotteries? Amazing.

Then read my Pole Dancing Blog of December 21, 2007. In that prophetic blog, I argued that states perhaps should not be in the lottery business at all because they (the states) in order to earn higher profits might be tempted to inflict harm on their addicted citizens by creating games that are more addictive (yet pay out less) or by implementing advertising strategies that create more gambling addicts. In other words, the states might be tempted to goose the games.

Well, it turns out that the states aren't expert enough at goosing, so they are looking for "someone with some new ideas to innovate and make it [the state lottery] more successful." (Gov. Jim Douglas, Vermont.)

Well, now, what excatly is a MORE SUCCESSFUL Lottery? One with higher profits, which means more gambling and more gamblers, which means more social problems as a result of the more gambling and the more gamblers.

"Private operators running lotteries are going to be much more likely to try to introduce games that are going to be extremely profitable, and that could be very problematic in terms of gambling problems." (Rachel Volberg, president, Gemini Research)

Go ahead, read the post--then go back and read my Pole Dancing Post from December, 21, 2007. I predicted all this.



States Consider Privatizing Lotteries
Posted: 2008-01-20 15:57:52
Filed Under: Nation News, Politics News
MONTPELIER, Vt. (Jan. 20) - Betting on the state lottery for some quick cash? Get in line: State governments across the country are thinking the same thing.

Courted by Wall Street investment houses, Vermont is one of more than a dozen states where proposals have been floated to lease state lotteries to private investors.

Vermont Gov. Jim Douglas is a strong proponent of the idea, and has been talking up a proposal by investment bank Lehman Brothers under which the state would get a one-time, up front payment of $56 million - plus annual payments growing from the $23 million annual profit it earns now - if it leases its lottery to a private concern.

The goal would be to "allow someone with some new ideas to innovate and make it more successful," Douglas says.But some fear that private companies would be more focused on profits than people, introducing addictive games that prey on compulsive gamblers.

Lawmakers in Illinois, Indiana and Texas have rejected lottery lease proposals in the past two years, but governors in all three states have indicated they'll raise the idea again.

In Indiana, the plan was to use revenue from a privatized lottery for a scholarship program to stem a brain drain from the state, according to Tom Osborne, an official handling infrastructure investments at UBS Investment Bank.Texas Gov. Rick Perry, meanwhile, had cancer research on his lottery-earnings shopping list.

In Vermont, Douglas wants to split the proceeds between stemming increases in the property taxes that pay for schools and chipping in for school construction projects.

"Not only will this proposal ease the financial strain on homeowners, it will help clear the backlog of school construction, giving our students 21st century learning environments in energy efficient buildings," Douglas told lawmakers in his annual State of the State address earlier this month.

Rachel Volberg, president of Northampton, Mass.,-based Gemini Research, which studies gambling and advises governments about it, said that when states run lotteries, the operations are tempered by concern for what's best for citizens. That could change if private companies were the ones drumming up the games, she said.

"Private operators running lotteries are going to be much more likely to try to introduce games that are going to be extremely profitable, and that could be very problematic in terms of gambling problems," said Volberg.

David Gale, executive director of the North American Association of State and Provincial Lotteries, said once private companies have a long-term lease - 30 or 40 years, typically - they would have a strong incentive to lobby lawmakers for expanding the lotteries to new types of betting.

Vermont lawmakers are leery of that, fearing higher lottery earnings will mean hardship for the people buying the tickets."In order for the lottery to earn more, Vermonters have to lose more," said House Speaker Gaye Symington, D-Jericho.Vermont is a small state, with a population of only about 625,000; the stakes are much larger elsewhere.

Lehman Brothers has estimated California could make between $16 billion and $37 billion for leasing its lottery, depending on how much freedom private investors are given to goose the games to generate more revenue.

Despite striking out so far in statehouses, supporters of lottery privatization aren't going away.

Lehman Brothers, Goldman Sachs, UBS Investment Bank and others - lured by the prospect of millions of dollars in fees for bringing states and private lottery operators together - are expected to keep knocking on state capital doors.Osborne wouldn't comment on what fees are at stake.

But he said if the privatization deals are presented right, they should fly."One of the critical things about selling the idea is making clear what the benefits are going to be to the state," Osborne said. "Where these have been successful, it's been in instances where there's a very clear use of the proceeds."

Osborne and other backers say states could contract for as restrictive a lottery operation as they wish, though limiting options could also mean less money to the state.The Lehman proposal for Vermont identified possible new opportunities for the Vermont lottery, including allowing a foreign entity to conduct a lottery on the Internet, or the lottery selling tickets to existing games via the Internet and cell phones.

In Vermont, the debate so far is between a Republican governor and a Democratic legislature that appears to oppose privatization. The issue doesn't fall neatly along party lines in other states.Illinois' governor is a Democrat, while those in Indiana and Texas are Republicans.

"In nearly all the states (where lottery privatization has been proposed) the executive was the proponent," said Arturo Perez, a fiscal analyst for the National Conference of State Legislatures who has been tracking the issue."In none of the states was the proposal in its first year of discussion," Perez added. "It's possible that we will continue to see this as a possible option that states will consider for raising new revenue."

Copyright 2007 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. All active hyperlinks have been inserted by AOL.
2008-01-20 15:12:52

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LEXIS-NEXIS--"By day, P drives a school bus in Miami. But his vocation? He's a gambler who craves every opportunity to steal a few hours to play the numbers, the lottery, at the Indian casinos. Allen has a narrative voice as compelling as feeding the slots is to P." Betsy Willeford is a Miami-based freelance book reviewer. November 4, 2007

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Preston L. Allen is the recipient of a State of Florida Individual Artist Fellowship in Literature and the Sonja H. Stone Prize in Fiction for his short story collection Churchboys and Other Sinners (Carolina Wren Press 2003). His works have appeared in numerous publications including The Seattle Review, The Crab Orchard Review, Asili, Drum Voices, and Gulfstream Magazine; and he has been anthologized in Here We Are: An Anthology of South Florida Writers, Brown Sugar: A Collection of Erotic Black Fiction, Miami Noir, and the forthcoming Las Vegas Noir. His fourth novel, All Or Nothing, chronicles the life of a small-time gambler who finally hits it big. Preston Allen teaches English and Creative Writing in Miami, Florida.