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Selling State Lottery Bad Risk For Taxpayers, Schools, Gamblers

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The Tampa Tribune

Published: September 18, 2007

Gov. Charlie Crist is thinking about selling the state lottery to a private investor who would pay enough to solve the state's immediate budget problems. He should think again.

The sale would be a bad idea for Florida's financial future, its public education and society in general.
Florida voters 20 years ago approved a state-run lottery to raise funds to enhance education. Last year, $4 billion in ticket sales produced $1.2 billion for education.

The games take money out of players' pockets and are not enhancing schools very much, but it is a voluntary source of revenue sure to increase as the state grows.

The market is so promising that several major financial services companies have lobbied Florida and other states to sell the lottery to some group of investors wanting a reliable return. One suggested deal could give Florida a big payday now plus a guarantee of $1.2 billion a year for 40 years. Faced with sluggish sales taxes and a budget shortfall, Crist can't be blamed for keeping his eyes open for new revenue sources.

But the tempting cash would come at the expense of future taxpayers. Selling the lottery would be something like deficit financing: Spend today and pay tomorrow.

And privatization is not always the civic remedy its advocates, including former Gov. Jeb Bush, claim. In recent years, a rush to outsource government jobs to private venders has been such a rocky experience that last year the state created the Council on Efficient Government to review pending deals.

The seven-member board, appointed by the governor, is charged with evaluating 'feasibility, cost-effectiveness and efficiency' before an agency cuts staff and outsources services. The council should do careful homework on any potential lottery deals before lawmakers start planning how to spend the windfall of cash.

The lottery is a small department. It has quietly built public trust and a reliable brand. And much more is at stake here than mere efficiency

After it is privatized, the new lottery leaders will give new meaning to efficiency. Anyone willing to invest billions up front also will have an aggressive business plan to boost profits. The Legislature would be lobbied to add new games, perhaps even video terminals in convenience stores. Expect a private lottery to want to bet on more than random numbers.

Advertising would increase to entice more people to play more often. The more successful the lottery, the more dollars it would siphon from the regular economy as it cashes in on compulsive gamblers and causes family dysfunction. It is no coincidence that in its review of Las Vegas, Sperling's Best Places, a report on the best places the live in the country, notes the gambling city has 'the highest percentage of divorced residents and the highest rate of suicides.'

Crist says he hasn't made up his mind about the lottery but that 'it's important to continue to be innovative.'

Florida residents should remind him it's more important to be right.

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