Keno Dooms Lottery Deal
CapitolFax today draws out the comments of Lottery industry expert Kip Peterson, from WBEZ's "848" show. You can listen to the May 24th show here, just go about 23 minutes in.
Capitolfax omits a couple of facts brought up in that interview that will doom the Governor's proposal.
First, according to Peterson, the only way to make the Lottery deal profitable enough to draw an offer that large is to legalize keno. That was an idea that the General Assembly has already soundly rejected.
Secondly, there are reportedly only three companies in the world with the capacity to run the lottery. One is John Wyma client GTECH. The mere mention of GTECH in conjunction with this proposal is enough to ensure not only no Republican votes, but no targeted Democrats can vote for it either.
Peterson also rebuts Becky Carroll, who points out in her arguments that Great Britain has privatized its lottery. The difference, says Peterson, is that the Britain deal is a seven-year license to run the lottery, not an outright transfer of ownership. The risk is much smaller on both sides of the table.
Peterson says the best way for Illinois to get the most money out of it's lottery system is to follow in the footsteps of Georgia and turn the lottery into a quasi-private agency (similar to the Post Office) still under state control. Of course, the big stumbling block with that idea is that Illinois doesn't get $10 billion upfront, so the Governor has no way to buy Senator Meeks off.
UPDATE: YDD has learned that the lobbyist for the second lottery competitor, Scientific Games, is Blagojevich insider Milan Petrovic. For more on GTECH, I recommend reading this Fortune Magazine profile: "Rare is the company that has faced as many allegations of baldly sleazy conduct as Gtech". Heartwarming, isn't it?
10 comments:
Good Post Yellow Dog,
I'm no Steve Hawking and while listening to the Gov. on Tuesday the huge numbers did not seem to make a great deal of sense.
But, a deal's a deal, I guess. I was very surprised to that Sen. Meeks took such a quick turn, after he has generated so much interest in his candidacy. Today's, Phil Kadner column is a case in point.
http://www.dailysouthtown.com/southtown/columns/Acurrent/kadner.htm
I cannot believe the administration would bring up the British lottery as an example! G-tech ran the British lottery, and not one but TWO G-tech CEOs were forced to resign over misdeeds there.
Per the Raleigh News & Observer, Jan. 31, 2006:
* In 1998, the company's chairman, Guy Snowden, resigned after he lost a libel suit against British billionaire Richard Branson. Branson had accused Snowden of offering a bribe in connection with the British lottery.
* In 2000, the lottery commission in Great Britain began investigating a GTECH software malfunction. The problems, which resulted in overpayments and underpayments to some prize winners, had occurred two years earlier, but GTECH had not disclosed them. The failure to do so triggered the resignation of CEO William O'Connor and the company's president, Stephen Nowick.
Yeah Rod, let's sell our lottery to G-tech too, great idea!
Meeks was looking for a way out in other words he let his mountain lion mouth overload his canary butt.
The heck with privatizing Britain's Lottery, Blair is on his way to privatizing Britain's schools.
With Laborites like Blair, who needs Tories. If the Democrats would support their rhetoric instead of their funders, they'd do the same to our schools here.
Private firms poised to run state schools after reform
Yellow Dog,
Keno isn't the only way to make the lottery profitable enough to sell for $10 billion. The lottery also pushed a bill through the senate in 2005(but it died in the house) that would have allowed it to offer tickets for sale on-line. Seems innocent enough. Who wants to stand in line for Big-Game tickets for the chance to win $100 million? Until you realize that they could offer "instant" tickets on-line. Offer these every 5 seconds and next thing you know the instant "tickets" are just like playing a slot machine. Except the slot machine is any place that has an internet connection. It would be the biggest game in town. Check out G-Tech's website and you will see that they have these games already in their inventory.
Anon 4:31 - The whole idea of selling lottery tickets on the internet was just a way to open the door to legalizing gambling on the internet -- something the gaming industry is also pushing for.
In fact, I wouldn't be surprised to see video gaming added to this as well. They'll just call them "Instant Lottery Machines."
But don't take my word for it. Take Kip Peterson's word for it. He's the expert, and he says they need keno to make this work.
Anon 6:21 - I don't know the answer to that question, and if you don't either, you shouldn't be posting it. Have you heard of "slander"?
What is Milan Petrovichs status as a lawyer in Indiana?
Post a Comment