Monday, January 22, 2007

A Losing Ticket

The article in today's New York Times about selling off the Illinois Lottery was full of surprises. The first surprise was the lead reason being offered by the Administration for the proposal. In the words of budget guru John Filan:
“This is fundamentally a retail business, and governments are not equipped to manage retail businesses,” said Filan. “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.”

Unless you've been living under a rock (a rock outside of Illinois, no less), the main thrust of the idea, and its timing, was widely accepted to rest in mollifying the threatened gubernatorial bid of Sen. Meeks by finding quick cash for education.

I suppose that I could have missed something, but this is the first time that I have heard that the sale is intended to boost ticket sales, something that I don't think will sit real well with those concerned about the inherently regressive nature of the lottery.

The next thing that surprised me was this short sentence:

The deadline for bids is Feb. 20.

Again, unless I have missed something, a sale of the lottery would require authorization by the General Assembly. I literally have not spoken with more than two legislators who support such a plan. The main reason tends to be that the sale provides short-term dollars but no long-term support for education funding, and will ultimately leave us worse off than we are now.

How anybody could place a realistic bid in such an uncertain, if not downright adverse, political climate escapes me.

But even if the state and the school kids don't come out ahead at the end of the day, there are at least some winners under the proposal:

Goldman Sachs and UBS are advising the state of Illinois.

So a bold-sounding plan that will likely go nowhere and generate no income for the State, may in fact wind up costing us money.

What a surprise.

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