What’s the future of Ohio Lottery? Maybe ‘quasi-public’ and online gambling

Source: Alan Johnson, Columbus Dispatch, September 26, 2016

Changes could be coming for the Ohio Lottery, including adding electronic table poker, online gaming, and a greater variety of instant tickets. Those are among the recommendations from Spectrum Gaming Group, a New Jersey research and professional services firm, hired by the Kasich administration to produce a business assessment of the Ohio Lottery, now 42 years old. The study cost $601,600, according to documents from the Department of Administrative Services. The lottery should become a “quasi-public” corporation, operating more efficiently and avoiding unnecessary government regulation, according to a copy of the study obtained by The Dispatch. Spectrum does not recommend turning the lottery private, but concludes that the current structure, which operates out of the governor’s office, is inefficient, slow to react to market conditions and subject to too much “control and oversight” by several state agencies and state lawmakers. It would be organized much like JobsOhio, Kasich’s privatized economic development agency, with a board appointed by the governor. … The idea in the Spectrum report is not new. Semi-privatization was recommended by then-state Auditor Mary Taylor in 2010 and Gov. John Kasich suggested privatizing the agency in his first budget in 2011, but the General Assembly did not go along with the proposal. Among other recommendations are allowing video poker and electronic table games at seven racinos at horse race tracks, possible expansion into online gaming, expanding instant games, and beefing up the assistance program for problem gambling. …

Related:

Ohio Lottery to undergo independent efficiency assessment
Source: Associated Press, September 26, 2015

Ohio Lottery officials say they’re planning to hire a consultant to study how the agency can operate more efficiently but insist there aren’t any plans for privatization. Northeast Ohio Media Group reports the study will include an examination of privatized lottery operations. A lottery spokeswoman says state law doesn’t allow for privatization of the agency. … Officials say the assessment will focus on ways to make the lottery more efficient and to identify ways to generate more funds for education.

Could the Ohio Lottery become privatized? A consultant will look at all options
Source: Karen Farkas, cleveland.com, September 22, 2015

The Ohio Lottery will undergo an independent assessment to determine how it can operate more efficiently and maximize revenues. Officials said that does not mean the lottery will become privatized, although all models – including privatized lottery operations – will be studied. … Among the consultant’s duties will be to “analyze the state lottery industry in other relevant or similar jurisdictions including the organizational, operations and management structures and effectiveness,” the proposal states. “Models of interest are current arrangements that include, but are not limited to, California, Illinois, Indiana, Massachusetts, and New Jersey,” Those state lotteries are privatized – and the path has not always been smooth. In August, Illinois Gov. Pat Quinn fired Northstar Lottery Group, the private company that runs the Illinois Lottery, after it fell nearly a half billion dollars short of revenues it promised to raise for the state during the first three years of a 10-year contract, the Chicago Tribune reported. Northstar New Jersey, which operates the New Jersey Lottery, is under fire for not meeting income targets, USA Today reported.

State seeks review of Ohio Lottery, but won’t pursue privatization
Source: Jay Miller, Crain’s Cleveland Business, September 3, 2015

It appears that the Kasich administration is at least looking to revamp, but not privatize, the Ohio Lottery. The Ohio Department of Administrative Services on Aug. 24 posted a request for a consultant to independently assess the operations, management and government structure of the $3.3 billion Ohio Lottery. The goal, according to the formal request for proposal, is for a report that analyzes how best “to achieve the highest financial return to the state from lottery gaming offerings and to obtain efficiencies in operations and management of the Ohio Lottery Commission.” Early in his administration, Gov. John Kasich had considered privatizing lottery operations. … The state contract should be awarded in the fall with a report on lottery operations due back to the lottery commission in late spring or early fall, Frizzi-Babb said.

Wording aside, state has no intent to privatize lottery
Source: Randy Ludlow, The Columbus Dispatch, September 2, 2015

While a document labels privatized lotteries in other states as “models of interest,” state officials said today that there are no plans to privatize the Ohio Lottery Commission. A state request for proposals on Aug. 24 seeks a consultant to conduct a far-reaching review of the lottery and recommend ways to contain costs and maximize profits, which largely are routed to public schools. One section of the document states that “models of interest” to be studied include the lottery systems in Illinois, Indiana, Massachusetts and New Jersey – all of which have privatized lotteries. … The goal of hiring the consultant is to undertake a business study of the lottery’s operations and make improvements to generate more money for schools, she said. … Theis said the privatization of lotteries in others states, including those in which Ohio is expressing interest, have been problematic, largely failing to meet promised sales and revenue figures.

Ohio Senate budget bill includes lobbyist legislation on privatizing Ohio Lottery
Source: Mark Naymik, The Plain Dealer, June 02, 2011

The company winning the contract to manage the Ohio Lottery would receive a 10-year deal and a yearly management fee of up to 5 percent of the lottery’s total revenue. The Ohio Senate’s latest version of the state budget bill includes language to privatize the Ohio Lottery that is nearly identical to legislation drafted by a gaming company hoping to manage the $2.5 billion agency’s day-to-day operations.

State Democrat, pair of Ohio Lottery officials bemoan plan to privatize the agency
Source: Reginald Fields, The Plain Dealer, June 16, 2011
Privatization of lottery rejected in state budget bill / It’s one of many changes adopted for $56B budget
Source: Julie Carr Smyth, The Associated Press, Tuesday, June 28, 2011