Category Archives: Lottery/Gaming

D.C. Seeks to Combine Lottery Contracts

Source: Associated Press, March 13, 2014

The District of Columbia’s chief financial officer has proposed combining the city’s two long-troubled lottery contracts, saying it would save the city money and ensure sufficient participation by local businesses in the lucrative deal. CFO Jeffrey DeWitt said in a letter to the D.C. Council on Wednesday that he’d like to solicit comprehensive bids for the city’s numbers-game and instant-ticket business when the numbers-game contract expires next year. The letter was obtained Thursday by The Associated Press. The city’s $38 million numbers-game contract is held by a joint venture between Greek gaming giant Intralot and local businessman Emmanuel Bailey. A federal grand jury has been investigating the circumstances surrounding that contract since 2012. Meanwhile, the city’s instant-ticket contract has expired, and its supply of tickets is dwindling. The D.C. Council rejected an instant-ticket proposal last year because it didn’t comply with a district law that requires 35 percent of major contracts to go to local businesses. …
DC lottery contract is the subject of a federal probe with numerous officials under scrutiny

Source: Associated Press, December 10, 2012

…Regardless of the outcome of the probe, the awarding of the lottery contract — which went to Greek gaming company Intralot in 2009 — illustrates systemic problems that open the door for elected officials to play politics with the contracting process and influence who wins…. The lottery probe has the potential to be the most sweeping of them all because of the number of people being investigated. The awarding of the contract was a bruising, years-long fight that left no one completely satisfied — including the winning bidders….

Alexander: I Took No Bribes on Lotto Contract
Source: Alan Suderman, Washington City Paper, December 10, 2012

More Weird Details on Lottery Contract
Source: Alan Suderman, Washington City Paper, December 7, 2012

Costs of Privatization Hidden in Plain Sight

Source: Ellen Dannin, Truthout, January 28, 2014

Privatization is often sold as providing higher quality services and infrastructure at lower cost. In fact, important costs are regularly overlooked. In other words, services and infrastructure have been privatized, even though keeping them public is the better choice….

…Other important costs caused by infrastructure privatization are easily overlooked, because of the length of the contracts, their impenetrable language and the need to think through how the contract terms would affect people, communities, investors and budgets. Not recognizing these as costs makes privatization more likely.

First, consider whether it matters that the cost of Adverse Action claims would mean fewer or no community street fairs. That may make people sad, but is their loss a cost to the public? It would be easy to say no, because those civic losses are not easily converted to money.

On the other hand, neighborhood events that bring people together promote community cohesion, pride and resilience, and provide more than just a pleasant time. Losing those events can degrade or even eliminate resources that support strong communities. …

Infrastructure 101: The Evolution of Building Big Things – Part 2: Adverse Events and Privatization Consultants
Source: Ellen Dannin, Truthout, January 15, 2014

Water privatization may not seem to have much in common with highway privatization, but contracts to privatize water, highways and other sorts of infrastructure are filled with “boilerplate” language, that is, each contract contains the same language, except for details such as the identities of the parties to the contract or issues specific to an industry or location. The proposed 2008 Pennsylvania Turnpike Contract is typical of infrastructure privatization contracts. The contract itself is 132 pages long. When all its attached documents are included, the total is 686 pages.

The boilerplate language makes the contracts easier to draft, but “easier to draft” does not mean easy to read or understand. In fact, infrastructure privatization contract language is unnecessarily hard to read. It may be that the contract drafters like to use legalese. The downside of the contract language is that people who do not work in the privatization industry, but who will be affected by privatization, will not understand the meaning and effects of the contracts….

Infrastructure 101: The Evolution of Building Big Things (Part 1)
Source: Ellen Dannin, Truthout, January 8, 2014

As this country’s public infrastructure crumbles, prominent organizations, such as Reason and its allies, strongly advocate using privatization to solve the problem. However, this country has a long and continuing history of successfully taking on big infrastructure projects through direct public support and funding – circumventing privatization while getting the job done well. As will be discussed next week in part two, the true cost of privatizing our roads, water and other infrastructure includes lost public control….

Out of Control: The Coast-to-Coast Failures of Outsourcing Public Services to For-Profit Corporations

Source: In The Public Interest, December 2013

From the abstract:
Eager for quick cash, state and local governments across America have for decades handed over control of critical public services and assets to corporations that promise to handle them better, faster and cheaper. Unfortunately for taxpayers, not only has outsourcing these services failed to keep this promise, but too often it undermines transparency, accountability, shared prosperity and competition – the underpinnings of democracy itself. As state legislatures soon reconvene, policy makers likely will consider more outsourcing proposals. Out of Control: The Coast-to-Coast Failures of Outsourcing Public Services to For-Profit Corporations serves as a cautionary tale for lawmakers and taxpayers alike.

Out of Control: The Coast-to-Coast Failures of Outsourcing Public Services to For-Profit Corporations

Restyled as Real Estate Trusts, Varied Businesses Avoid Taxes

Source: Nathaniel Popper, New York Times, April 21, 2013

A small but growing number of American corporations, operating in businesses as diverse as private prisons, billboards and casinos, are making an aggressive move to reduce — or even eliminate — their federal tax bills. They are declaring that they are not ordinary corporations at all. Instead, they say, they are something else: special trusts that are typically exempt from paying federal taxes. … The Corrections Corporation, which is making the switch, expects to save $70 million in 2013. Penn National Gaming, which operates 22 casinos, including the M Resort Spa Casino in Las Vegas, recently won approval to change its tax designation, too. …. For example, prison companies like the Corrections Corporation and the Geo Group successfully argued that the money they collect from governments for holding prisoners is essentially rent. Companies that operate cellphone towers have said that the towers themselves are real estate….

Oklahoma Lottery privatization proposal advances through House committee

Source: Randy Krehbiel, Tulsa World, March 28, 2013

A proposal that could lead to privatization of the Oklahoma Lottery eased through a House committee on Wednesday despite reservations about its ultimate feasibility. Senate Bill 863, by Sen. Clark Jolley, R-Edmond, authorizes the governor to “seek, accept and analyze” lottery privatization proposals but not to implement them. The bill reserves that decision for the Legislature after a through analysis by the Office of Management and Enterprise Services.

Editorial: States on treasure hunt with privatization plans

Source: Editorial, Philadelphia Inquirer, November 28, 2012

State officials in Harrisburg and Trenton shouldn’t gamble on the Pennsylvania and New Jersey lotteries – particularly if the promised gains from planned privatization schemes prove as elusive as this week’s $500 million Powerball jackpot.

Both Govs. Corbett and Christie are exploring leasing out lottery operations to expand revenue. While neither lottery is broken – both are seen as efficient cash cows that bring in, respectively, $3.4 billion and $2.6 billion a year – the governors can’t really be faulted for examining strategies to keep the funds flowing.

Christie has heard from several U.S.-based and international firms interested in managing ticket sales and marketing. But the Corbett administration has moved far more quickly – with the governor announcing a proposed deal with a British company just before Thanksgiving….

Second company drops out of race to run Hoosier Lottery

Source: Tony Cook, Indianapolis Star, September 6, 2012

The two foreign companies that had considered bidding for an opportunity to privately manage the Hoosier Lottery have pulled out — one case because of concerns that the process favors current vendors. Camelot Global Services, which runs the national lottery in the United Kingdom, and Tatts Group Ltd., a Melbourne company that operates several lottery licenses in Australia, were among four companies that had provided information to the Hoosier Lottery for a preliminary background check in anticipation of submitting a full proposal. …. The reason: “It will not allow the successful bidder to maximise returns to society in a responsible way, nor will it provide a commercially viable opportunity for new bidders,” she said.

Kasich Administration Advanced Privatization in Ohio in 2011

Source: Leonard Gilroy, Reason Foundation, May 15, 2012

Initiatives advanced in economic development, asset realignment and more. Initiatives include: JobsOhio, Corrections, Ohio Turnpike, and Ohio Lottery.
– …[T]he budget authorized state higher education institutions to privatize dormitories and other facilities, while authorizing K-12 schools to privatize their transportation services. Similarly, the budget also authorized local governments and other units of government to enter into long-term leases up to 30 years in length to privatize the operations and management of their garages, meters and other municipal parking assets. Ohio State University may be the first to take advantage of the new authority, as university trustees have authorized a procurement for a potential 50-year lease of their parking system…
– Gov. Kasich signed into law House Bill 114, authorizing the Ohio Department of Transportation to enter into public-private partnerships to finance, design, build, operate and/or maintain highways, bridges and other transportation infrastructure statewide.
– Gov. Kasich is reportedly considering subleasing the operation of the Ohio Academic Resources Network–a nearly 2,000-mile fiber optic system connecting universities, schools, medical centers and research facilities–to private businesses, according to local press reports.

Christie Administration Expanded Privatization Portfolio in New Jersey in 2011

Source: Leonard Gilroy, Reason Foundation, May 15, 2012

Initiatives advanced in toll collection, road maintenance, racing facilities and more… Major current and recent privatization initiatives advanced in New Jersey include: Highway Maintenance, State Parks, Manual Toll Collection, State-Run Horse Racing Facilities, New Jersey Lottery, Vehicle Fleet Ownership, Operation and Maintenance, Correctional Food Services Pilot Project, Child Support Payment/Receipt Processing, Montclair State University Housing PPP, New Jersey Network, and NJ Transit Parking.

Oklahoma lottery should be privatized, Senate panel told

Source: Barbara Hoberock, Tulsa World, November 2, 2011

Lawmakers must decide whether the government should be in the business of running a lottery, a Senate panel was told Tuesday.

The Senate Finance Committee during an interim study heard the pros about privatizing the state’s lottery, which was approved by voters in 2004 to generate revenue for education.