Inquirer Editorial: Hard to bet on lotteries with so little public input

Posted: February 01, 2013

State lotteries are natural candidates for privatization: There's simply no argument for Scratchers and Powerball as core government services. So it's appropriate that Govs. Corbett and Christie have considered the potential for saving money and raising revenue through private management of their states' lotteries.

The trouble is that the governors have both taken an I'm-the-decider approach that reduces the odds of success to something like the average lottery player's. Both have assiduously avoided oversight by lawmakers. And each claims a grand total of one corporate suitor, robbing the bidding process of the salutary effects of competition - a principle any privatization proponent should appreciate.

The Christie administration's bid to privatize the New Jersey Lottery has been conspicuously quiet, as The Inquirer reported this week; its treasurer even declined invitations to testify before a legislative committee. A consortium known as Northstar, the sole bidder, could eventually take over operations with no legislative input.

That would be unfortunate, especially given Northstar's spotty record managing the Illinois Lottery. Last year, it missed its profit target by at least $50 million.

In Pennsylvania, meanwhile, Gov. Corbett is further into his own ill-considered privatization, having already awarded a contract to the British firm Camelot Global Services, the only bidder on this side of the Delaware. Fortunately, the Pennsylvania contract is subject to independent review by the state treasurer and attorney general.

Corbett's rush around a legislature controlled (unlike New Jersey's) by his fellow Republicans has had the dubious benefit of giving the public a better sense of what the deal involves - now that it's almost too late to do much about it.

Camelot hopes to expand the pool of lottery players by adding games, such as keno, and new places to play them, such as bars and the Internet. Similar steps can probably be expected from any privatization in New Jersey.

That raises a serious moral question: Having accepted that both state governments are deeply involved in gambling, do we now want them to hire private help to ensure further promotion and proliferation of the vice?

Perhaps there are ways of doing so that would be more acceptable than others - and more worth it to the social services funded by the lotteries. And perhaps privatization could benefit the states in ways that don't involve inducing their citizens to gamble even more.

But we won't be able to make such judgments as long as these deals are pursued with so little transparency, competition, and oversight.

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