The Round-Robin of State Lottery Exploitation

Source: Sebastian Johnson, Citizens for Tax Justice and Institute on Taxation and Economic Policy (ITEP), Tax Justice blog, February 4, 2015

Lotteries have been with us since the early years of the Republic. They were corrupt and a poor way to raise revenue then, and today they’re not much better. … It isn’t just retailers getting in on the fraud. In states that have turned to private contractors to administer their lotteries, the companies have failed to deliver on wildly exaggerated claims of revenue growth. Last year, former Illinois Gov. Pat Quinn was forced to fire Northstar, the firm operating the state lottery after it failed to deliver $400 million in promised profit over three years. Despite that abysmal track record, New Jersey Gov. Chris Christie hired the same firm to take over New Jersey’s lottery; unsurprisingly, Northstar New Jersey missed its income target by $55 million, and revenues were 7.9 percent lower compared to the same period the previous fiscal year (under state management)….