Sale of lottery doesn’t add up, gambling opponents insist

Posted: 2/09/07

Sale of lottery doesn’t add up,
gambling opponents insist

By John Hall

Texas Baptist Communications

AUSTIN—Gov. Rick Perry’s proposal to sell the lottery just doesn’t add up, according to Texas Baptist gambling opponents.

Suzii Paynter, director of the Texas Christian Life Commission, and Weston Ware, legislative spokesman for Texans Against Gambling, are two of many bipartisan leaders who questions Perry’s logic in wanting to sell the lottery to a private group a year after the lottery recorded its highest sales and when the state has a $14 billion surplus.

“Perry believes he can get $14 billion for the lottery,” Paynter said. “The surplus in the state is $14 billion. I find that a bit ironic.”

In his State of the State address Feb. 6, Perry proposed to sell the lottery and use the proceeds to create endowments that would fund public education, cancer research and a new health insurance program.

The state currently provides an overall direction for the lottery, but the strategy already is carried out by independent contractors who print the tickets, recruit distributors, collect data and ship tickets.

“Imagine the possibilities if we create a permanent endowment for public education, a permanent source of funding for making health insurance more affordable and available, and a long term source of substantial funding to fight a disease that touches the life of virtually every Texan,” Perry said in his address.

Perry’s proposal received a mixed reaction at best, with leaders from both parties stepping forward to question his plan. The proposed $8.3 billion public education endowment would yield about $750 million a year in interest, $250 million less than $1 billion the lottery contributes each year. Revenue from the lottery funds a small portion of the budget for public education.

Ware believes the projected drop in public education funding is one of the primary reasons selling the lottery is a bad idea, but he said it’s a bad idea for other reasons,as well.

“Number one, the numbers don’t work,” he said.  “That is the truth.  Number two, it would turn over to private companies a windfall monopoly on the operation of a vice that’s known to be addictive and harmful to society.”

Paynter wondered if Perry is trying to distance the state from a lottery that has not produced the support for public schools that was projected each year.

“I cannot resist in pointing out that the lottery has not always lived up to the promises that Texans expected when they approved it,” she said. “So in that light, I don’t blame the governor for wanting to sell it.”

Illinois, Indiana, Michigan and Washington, D.C., each have considered privatizing their lotteries, but none have done so. Privatization would provide up-front payments to states for long-term leases.

Perry argued in his address that Texas must act fast to sell its lottery before other states do.

“Two states are currently trying to sell their lotteries and several more are likely to follow,” he said. “If we delay, the market price is likely to be substantially less in the years to come. But if we act now, we can invest in our classrooms, our laboratories and hospitals—giving hope to those who need it most.”