You Scratch My Back, I'll Scratch Your Ticket

On the heels of the NYT's state lottery story that I commented on recently comes another. According to today's paper, several states are now considering "leasing" their lotteries to private companies.

There are some immediate concerns that leap to mind. The first thing that comes to mind, for me: What about the chunk of the state's take on the lottery that is earmarked for education spending? As I noted in the earlier post, it's a small percentage of education spending, but still, it is billions of dollars. If the lottery income gets replaced by a one-step-removed stream of payments from some Wall Street firm who bought the rights to run the lottery, will it be easier for the funds to be redirected, away from education?

There's also the obvious worry that comes about when the government hands over control of something where big money is involved. What happens when, say, the business running the lottery says "We're not making as much money as we were, so we want to cut our yearly payments to the state." What happens when accusations are raised that the business is running a crooked table; e.g., paying out less to winners than might be merited by sales? So, obviously, you're going to need a regulatory agency of some sort. This means another layer of bureaucracy, not to mention a few key government employees susceptible to kid-glove treatment by lobbyists.

It's worth considering, as well, how much more aggressively a private company would market the lottery. As I noted in my earlier post, I'm on the fence about the government protecting adults from their own vices, but it does seem likely that poor people are going to be exposed to more commercials pushing the lottery. Who will be responsible for the truth in that advertising?

A final thought: if a private company can run the lottery, then why wouldn't any other gambling operation also be legal? I'm sure that the argument in response here will be that the private company doesn't own the lottery, but is merely running it, but this seems to be only a semantic difference. After all, it's not like the private company is being paid to perform a service. It's paying for control of the game and for the right to maximize its own profits. Sort of like leasing federal lands for the right to extract oil.

Yeah. Nothing to worry about here.